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Founding Sponsors
This Presentation Courtesy of the
International SOA Symposium
October 7-8, 2008 Amsterdam Arena
www.soasymposium.com
Gold Sponsors
Platinum Sponsors
Silver Sponsors
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Linking SOA and Process Standardisation at Shell
Doug Groves – VP Finance Process Integration
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Theory
Should SOA fall short of expectations, it
will be for the same reasons ERP and
CRM have fallen short of expectations.
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Theory
Should SOA fall short of expectations, it will be
for the same reasons ERP and CRM have fallen
short of expectations:
Insufficient Enterprise and Process
Maturity
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Royal Dutch Shell PLC
• GLOBAL ENERGY COMPANY
– World’s 2nd largest private energy & petrochemicals
company by market cap
– Operating in more than 110 countries
– Serving millions of retail customers every day
– 104,000 staff
– A leader in clean natural gas and technology
– Leading on alternative energies
• 2007 HIGHLIGHTS
– Income ~ $31 billion
– Revenue ~ $356 billion
– Net capital spending ~ $24 billion
– Production ~ 3.3 mln barrels of oil equivalent per day
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Overview of Shell Finance
• Significant migration of jobs to shared service locations – from 2,750 today to 5,000 in 2010.
• Process improvement and standardisation activities in progress in 17 process areas
• Significant rationalisation of IT also in progress
• Over 12,000 staff operating in over 110 countries
• Six captive shared service centre sites – Glasgow, Krakow, Chennai, Kuala Lumpur, Manila and Guatemala City
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Requisition to Pay
Shell Finance Process Hierarchy
Group Finance
A: Management
of Financial
Activities
B:
Manage Equity
and Finance
ManageIntra-Group
Funding
C:
Record &
Execute
Transactions
Liquidity & FX Risk
Mgt
Local Statutory Reporting
Cash Management
Manage Direct Taxes
Payroll & Benefits
Manage Close
Group Reporting
Manage Indirect Taxes
Controls Assessment Assurance
Travel & Entertaining
Expense Claims
Budgeting, Planning &
Internal Rep
Offer to Cash
Manage Hydrocarbon
Inventory
Capital & Assets
D:
Manage
Reporting &
Analysis
E:
Specialist/Other
F:
Reserves
Commodity Trading
Support Acquisitions
& Divestments
Parent Companies
Capital
Manage supporting
records
IT Controls
End user computing
Static data management
Manage Insurance
Pensions accounting &
support
Support JVs & PSCs
Hydrocarbon Allocation
Reserves Reporting
Intra Group Services,
Fees & Billing
In scope for standard
global process
design
Not in scope for
standard global process
design
KEY
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Linking SOA with Process Standardisation
Deploying services drives process standardisation,
which requires:
– Process governance and leadership
– Process design and integration
– Organisation design
– Skills, tools and methodologies
– Data management
– Change managementProcess
SOA
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Evolution of Services in Shell Finance
(simplified model) As-Is Level 1 Level 2 Level 3
Business model
and
organization
Organization and
process specific per
business.
Single organization,
business process
variants.
Single organization,
standardized
process.
Single organization,
standardized
process.
IT model IT support specific
per business.
IT support specific
per business.
IT support specific
per business,
implementations are
alike.
Standard services
run on a shared IT
system.
Example Accounts Payable in
the UK
Finance operations
in 2008
Finance operations
after process
harmonization
Treasury, Group
Reporting,
Business process
IT support
Organization
Target levels and development roadmaps of the business and IT models must be aligned
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Applying SOA Concepts in the Application Architecture
Moving Beyond Traditional ERP
• Core finance processes require loose
coupling to non-financial processes.
• Integrated finance processes are tightly
coupled with other processes.
• Working with SAP to explore new
approaches to decouple logistics from
financials
Finance Applications
Business ERP
Business DW
Business ERP
Business DW
Business ERP
Business DW
Finance Services
Finance Finance Finance
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External ServicesFinance Functions Applications
Business Finance Applications
Finance Operations Applications
Group Reporting
Local Statutory reporting
Group Planning
Tax ComplianceGroup Services
Business Process Management
JV & PSC
Business Performance Analysis
Finance Process Performance Analysis
Payment handling
Credit Rating
Finance Master Data Management
Accounts Receivable
Accounts PayableManage Close
Dispute management
Invoicing
Business Finance Reporting
Audit Defense
Provide Routine MI
Controls, Assurance & Assessment
Cash Allocation
Indirect Tax Calculation
Pension
Decision Support
Equity and Financing Management
Cash Management
Master Data distribution
Asset Accounting
Financial Reporting Support
Manage Finance Data Warehouse
Manage Hydrocarbon Inventory
Business Planning
Manage Insurance
Liquidity & FX Risk Management
Tax Provisioning
Financial Market Rates
Investor Relations
Hydrocarbon Allocation
Credit Management
Internal Audit
Budgeting
Project Accounting
Intra Group Funding
Tax Planning
Forecasting
Direct Tax Calculation
Performance Analysis
Document Management
Travel & Entertaining Expenses Claims
Financial Market Dealing
Transaction Banking
Cash Management
Capital Planning
Banking Infrastructure
B2B Communication
General LedgerManagement Accounting
Forecasting
KEY
Target Competency
Level of coupling withBusiness ERP
Base
Core
Differentiated
Decoupled
Partially decoupled
Coupled
High Level Services in the Target Finance IT Architecture
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Get the Governance Right
LocalGlobal
Str
ate
gic
Op
era
tio
na
l
Process
Executive
Process
Manager
Process
Performer
PP – Operate processes
PE – Define process improvement
strategy; lead improvement
activities; authority for design
and changes
PO – Drive design and
improvement activities; plan
and support implementation;
monitor and assess
performancePM – Manage process operations
in accordance with standards;
drive implementation within
own organisation; support
continuous improvement;
participate on PAC
Process
Owner
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Get the Data Right
Governance defined
for key processes
Measuring data
accuracy
Measuring process
performance
Initial system
investment
Undefined governance
Poor data quality
Fragmented processes
Perceived as a systems
problem
Governance effective
across the business
Effective continuous
improvement applied
to data accuracy &
process performance.
Introduced use of
state of the art tools
Data managed as a
business critical asset
First quartile process
cost performance and
data quality
Effective use of state
of the art tools
Operationally Efficient
BE
ST
PR
AC
TIC
E
TIME
Commercially Capable
Fragmented
World Class
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Data Quality - Meeting Defined Standards for Good Business Reasons; Not
About Being Perfect
Data
Quality
Standards
Cost/BenefitHow much is it worth spending on
data?
RelevanceAre we maintaining data we do not
need?
Security/AccessibilityDo we need to restrict access to the
data?
TimelinessIs the data up to date?
Is it available when required?
CompletenessDo we have all data to the right level
of detail?
Clarity/UniquenessCan we clearly select the right data?
ConsistencyIs there more than one version of the
data?
Accuracy/PrecisionIs the data accurate within tolerance?
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Process and Enterprise Maturity Model
Process Design
Process Metrics
Process
OwnershipProcess
Performers
Process
Infrastructure
Enterprise
Leadership
Enterprise
Governance
Enterprise Culture
Enterprise
Expertise
P – Ad-hoc, Designed, Integrated to Extended
E – From Process Tolerant to Process Centric
A way to evaluate the primary elements required to manage and
execute processes
Five
Maturity
Levels
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Enterprise Maturity Extract - Leadership
Requisite Indicators Requisite Indicators
Leadership Awareness The enterprise's senior
executive team recognizes the
need to improve operational
performance but has only a
limited understanding of the
power of business processes.
Operational improvement is a
frequent discussion topic at
executive meetings.
Executives attend seminars or
perform site visits regarding
performance improvement
techniques. Process
terminology is often used but not
always precisely.
At least one senior executive
deeply understands the
business process concept, how
the enterprise can use it to
improve performance, and what
is involved in implementing it.
A member of the seniormost
executive group relates
enterprise performance
problems to specific
fragmentation and design flaws
in particular processes.
Alignment The leadership of the process
program lies in the middle
management ranks.
A mid-level manager has
developed a passion for process
and is lobbying with executives
to adopt the process approach.
A senior executive has taken
leadership of, and responsibility
for, the process program
A senior executive had made a
personal commitment of time
and resources to process
transformation, and is visibly
promoting the process concept.
Behavior A senor executive endorses and
invests in operational improvement.Budget has been allocated for
process improvement training
and initiatives, and improvement
projects have been mandated.
A senior executive has publicly
set stretch performance goals in
customer terms and is prepared
to commit resources, make
deep changes, and remove
roadblocks in order to achieve
those goals.
Resources (financial and
human) have been assigned to
a process transformation
program in pursuit of explicit
stretch goals; managers who
attempt to impede the program
are appropriately disciplined.
Style The senior executive team has
started shifting from a top-down,
hierarchical style to an open,
collaborative style.
Senior managers actively solicit
ideas from lower levels of the
organization; some diagonal
task forces are in operation and
executives are following some of
their recommendations.
The senior executive team
leading the process program is
passionate about the need to
change and about process as
the key tool for change.
The senior executive leading the
process program spends
significant personal time
communicating and promoting
the program, and weaves
process concepts and goals into
all business discussions.
E-1 E-2
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Process Maturity Model – Process Infrastructure
Information Systems
P1 P2 P3 P4
Fragmented legacy
support the
An IT system
from functional
supports the
An integrated IT
designed with the
mind and adhering
enterprise
the process.
An IT system with
architecture that
industry standards
enterprise
supports the
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PEMM Use in Shell
• Assess maturity before new
deployment and adjust plans
as appropriate
• Define annual maturity
improvement plans by process
and organisation
• Tool for understanding keys to
success
• Annual survey to assess
progress
Methodology& Tools
Leadership& Goals
Execution & Governance
Training & Communications
MeasurementPeople
& Culture
Technology
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Questions?
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Process Re-engineering in Practice?
How the Process Owner
explained it
How the Process Designers
understood it
What the consultants
suggested …
How Onshore IT
designed it
How Offshore IT built it
How it was documented What the Deployment Team
did
How it Worked
at Go-live
How IT supports it What the Business really
needed …
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Analysis of “loose” coupling in processes
Process decomposition to identify rough
boundaries
Approach to Define the Business Services
L1
L2
L3
L3
Process centric governance structure
Process driven data ownership
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The Business Services definition is iterative with Application Services definition
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Applying SOA Concepts to Organisation Design
• Financial (sub)-processes are
delivered through global delivery
centres.
• The delivery centres expose a
limited number of services to other
departments. These are stable for
a longer period of time.
• Business process improvement is
focused in the delivery centres
(tactical cycle) and across the
delivery centres and organization
(strategic cycle).
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Shell Enterprise Process Model