Andy Mulholland Global CTO, Capgemini

1. Is it being Adaptative & Cost Advantageous by using new technology? OrCreating marketValue and Differentiation for the Business? If SOA* is the answer, what’s the question? Andy Mulholland Global CTO, Capgemini * Service Oriented Architecture

2. Some points to consider…. and hopefully answer! • Why are ‘Services’ a recognisable ‘new’ technology wave • Can we identify a ‘common’ thread or even market • More importantly is there real Business value in this • Where are the compelling circumstances • How and where do you focus to start • Plus a selection of popular terms; • Architecture, SOA and SOI • Open Standards • Open Source • Etc • This not a presentation on the detail of the Technology but on its application to Business benefits

3. The puzzling disconnect between home and work The Business Manager • What are your business ‘services’ • How do they differentiate • Who are your customers and suppliers • What are your competitors doing • Your strategy to create success and ‘value’ The Home Internet User • Finding possible choices • Comparing the options • Listing favourites and registering • Checking out news • Getting better value and wider benefits

4. The Next Major Transition The Internet & Web moves to become Business Technology CLIENT-SERVER SERVICE-ORIENTED PC MINI-COMPUTERS INTERNET MAINFRAMES 1960 1970 1980 1990 2000 2010 The Service Oriented Enterprise operates using; • Software and data as services • Hardware as virtualized resources • Autonomic data sources • Occasionally connected usage • Services that cross firewalls • But still utilizes existing legacy systems An Intel diagram of explanation

5. Five of the Ten Most Influential Players in Open Source A new technology wave? Source; Information Age Summer 2005 Times and possibilities have and are changing….. fast Key Standards for SOA • Web Services Definition Language (WSDL) • Simple Object Access Protocol (SOAP) • Business Process Execution Language (BEPL) • Universal Description Discovery & Integration (UDDI) • Web Service Choreography Interface (WSCI) • Blocks Extensible Exchange Protocol (BEEP) • Web Services Addressing (WS-Addressing) • Security Assertion Markup Language (SAML) • Web Services Distributed Management (WSDM) • Web Services Trust Language (WS-Trust)) • Open Standards; • a reality, developing faster, supported of by technology industry and users • Open Source; • a mainstream method for sharing common software and software licence reform • Open Convergence; • of technology vendors and users to design new types of interactive process flows

6. Bridging the disconnect using Business Service examples Think of the Low Cost Airline vs. Traditional Airline The connection of the external market for seats and demand to the internal fulfilment with dynamic pricing Horizontal integration by Process (Service Oriented) Vertical integration by Data (ERP and EAI) Think of Choosing on Amazon vs. a Mail Order Bookshop The ability to view pages in any order to make the process of choice and to read market comments on topics Choose your own Process (Service Oriented) Be driven by their requirements (Application) Think of the Scalability of eBay 120 million users sharing, building and changing processes as and when required with no centralised dependencies

7. Service-Oriented Enterprise External Information External Actions Collaborative optimization Service-Oriented Business Orchestrating Business Value through Services Direct business value capabilities Service-Oriented Applications Orchestrating Software and Data as Services Service OrientedArchitecture and Business Process Improves flexibility to "adapt" Service-Oriented Infrastructure Orchestrating Virtualized Resources Reduces "fixed" operating cost Sensor Technology Automating Data Collection Automates data capture

8. IT does Matter; new areas of value and differentiation Back Office Applications for ‘Cost’ based automation versus Front Office ‘Services’ for accessing Business ‘Value’ Value Captured by New ‘Services’ Cost to Provide Traditional Applications Opportunity Externally Identified Competitor #1 Market Sales Prospect Competitive Differentiation in Responding to Opportunity Comparison between Back Office Operating Costs Value Captured by New ‘Services’ Cost to Provide Traditional Applications Opportunity Externally Identified Competitor #2

9. Different People and Reasons for adopting ‘Services’ Market Sales Revenues And Profit Market Opportunity Back Office Front Office CEO and COO Shareholder value Strategic Positioning Market and Ecosystem Competitive advantage Value Driven SOE COO & Business Mgr Business Operating Efficiency Activities Internal & External Focus on Information Effectiveness driven SOA CFO and CIO Traditional Transaction Recording Apps/ERP Internally focussed on Automation of Data Mgt Cost driven using SOI

10. Business Large inflexible structures Monolithic functions Big investments IT and MIS Long running Projects Big applications ie ERP Overall infrastructure Business Small agile market based units Flexible attributed process Small investments, quick payoffs IT and MIS Small self contained projects Web Services Shared infrastructure The ‘edge’ and ‘inter-business’ works differently eBay Any to Any Exchange B2B Exchanges Business • Funded by Millions of $ • Supported by big names • Extension of existing Business model IT and MIS • Monolithic Application centric • i.e; CommerceOne • ASP – application service provider Business • Market place defined by participants • Volume created by users • New processes created by users • To suit circumstances IT and MIS • Web Service Architecture centric • Built in small pieces as required • Orchestration is used to support endless dynamic change Internet Connected; Web Service Standardised; Enterprise Business Vision; User Services Defined Bad News BIG Good News SMALL

11. … and its already raising many of the current challenges Need for more flexibility • Multichannel strategies • Time to market • Mergers and de-mergers Unsupportable Dependancies • Increasing amount of ‘spaghetti’ linkages • Too much of the budget spent on maintainance • Difficulties in staffing for support of legacy systems Integration of Web-based channels • Enterprise portals are no longer stand-alone • Connection to legacy systems is difficult • Online systems ‘crash’ with external visibility Cross-functional processes • ERP systems have created new ‘silos’ • Need for adaptative processes • Increasing use of external ‘partners’ Continued cost reduction plus Compliance support Demand for ‘New’ IT services • Collabration • Communication • Information • ‘Services’ • Global Data Sync • Mobility • Messaging • ....

12. Services offer four compelling reasons for implementingNumber 1 – technology costs and creating ‘Adaptive IT’ ERP Legacy Logistics PoS Logistics Legacy SAP POS Web SAP Web • Cost Reduction of Existing IT operation a technology driven activity of rising popularity over the last few years • Creation of a common and shared infrastructure to reduce ‘fixed’ costs = SOI • Server Virtualisation, Storage Area Networks, … • Delivery of a complex requirement in a more effective lower cost manner = SOA • Wide spread adoption of ‘architecture for solutions and enterprises

13. Services offer four compelling reasons for implementingNumber 2 & 3 – Business Value from Market activities The Keystone Advantage A Harvard Business Press Book The Keystone supports the arch A Feature stone attracts Attention to the arch A Niche stone is valued for uniquely fitting The Foundation stone can supports multiple arches • Strategic Business Advantage; ‘Inside- Out’ A first movers advantage created by seizing a new market position • The Walmart or Dell positioning at the centre of a ‘joined up ecosystem = SOE • Creating extended processes that connect ‘Inside’ procedures to ‘Outside’ enterprises • Tactical Business Advantage; ‘Outside –In’ Responding to the impact of a first mover by joining their ecosystem • A supplier to Dell or Walmart joining the ecosystem to gain more business • Connecting procedures from an ‘Outside’ customer to ‘inside’ procedures

14. Lets get Imaginative – a car manufacturer and ‘Inside – Out’ X Motors Manufacturing X Motors Service Dealer X Motors accessories manufacturers community

15. Services offer four compelling reasons for implementingNumber 4 – A Transformational Business Strategy “New player in a mature industry” “New player in a mature industry” “New player in an emerging industry” “New player in an emerging industry” Do what they do – cheaper & better Innovate – faster than the others Do what they do – cheaper & better Innovate – faster than the others Build SOE platforms from scratch, leverage alliances and virtuality (web) to bust the process paradigms of the industry Stay close to the customers, change as they change, based on a fully service oriented Process, People & IT platform (“Totally Adaptive”) “Established player in a mature industry” “Established player in a mature industry” “Established player entering an emerging industry” “Established player entering an emerging industry” Gradual replacement for cost/scale advantage Release the new from the legacies of the old Release the new from the legacies of the old Gradual replacement for cost/scale advantage Select sub-processes in specific lines of business and geographies for SOE migration, extend and integrate on a “proof-of-return” basis Configure new lines of business for massive startup on “pure” SOE platforms, interface with legacy and push change towards the center New Entrant Stay close to the customers, change as they change, based on a fully service oriented Process, People & IT platform (“Totally Adaptive”) Build SOE platforms from scratch, leverage alliances and virtuality (web) to bust the process paradigms of the industry Enterprise Maturity Configure new lines of business for massive startup on “pure” SOE platforms, interface with legacy and push change towards the center Select sub-processes in specific lines of business and geographies for SOE migration, extend and integrate on a “proof-of-return” basis Industry Maturity Emerging Legacy

16. What the IT element?

17. Today‘s IT landscapes built for yesterdays‘ business processes • History of IT landscape and current challenges Does the IT complexity still fit to our business needs? Impact • “Hard-wired” applications/processes • Limited flexibility • Hurdle for growth and innovation Intranet CRM2 Business CRM 1 (…) • Mainframe,legacy etc. • Singularapplications(FI/CO, R/2) R/3 • High integration cost • Speed of change • Poor data quality • People as “humanintegrators” SCM IT • Limited businessvalue through IT • IT only for fewclient needs • Increasing IT interfaces& „exploding“ IT costs • Multitude of IT vendors • Growing business complexity • Globalization and mergers • Existing „IT-silos“ (e.g. vendors,regional, business units) • Create open platform • Define „Enterprise servi-ces“as business & IT driver • Enabled internet solutions 1980s 1990s 2005

18. Service-Oriented Architecture de-couples ‘glue’ that slows change • Business architecture powered by SOA Key Characteristics • Extraction of business scenarios – custom composite/event driven • Encapsulate existing systems – loosely coupled • Flexibility • Reduced complexity (content wise as well as timing) • Re-usability • Speed Finance, Controlling, HR & other support processes Marketing & Sales Orderprocessing Logistics – In- and Outbound Production Billing QualityMgmt. Customer service Portal / EAI / Business Process Platform Marketing / Sales TMS1 Finance & Controlling Reporting & Planning Purchase & Procurement Others • Order entry • Transportation Planning • - Client billing • - Intra-company settlement Personnel Warehousing Customs Mgmt. Damage Mgmt. 1 Transport Management System

19. SOA: Business Flows into Services through Architecture Example Master data mgmt. CRM Customer service Procure-ment Human resources Business intelligence Track & trace Transport planning Transport Billing Qualitymgmt. Orderprocessing Order mgmt. Pick-up execution Pick-up depot Linehaul Delivery depot Delivery execution Delivery tour post-operations Quality mgmt. Pick-up order registration Preparation of pick-up tours Return from pick-up Freight plan adaptation Preparation of tour planning Standard delivery Management undelivered goods Mgmt. of operational performance Shipment preparation Pick-up Unloading Network information Linehaul unloading Collection C.O.D. Measurement of service levels C.O.D. management Pricing & costing Check good/info. Deviations management Sorting for delivery Special delivery Invoicing / billing Customer automation system Finance/ accounting Sorting of goods and information Tour planning Unexecuted delivery Cost / partner settlement Scanning equipment Linehaul loading Loading vehicles Internal settlement Sorting equipment Linehaul departure Departure of delivery tour Weighting measuring Terminal check Terminal check = TMS core functionality = Outside TMS

20. Service-Orientation focuses on delivering unique Business Value • Business Transformation SOE Unique Value Proposition Products/Services Encapsulated layers create tremendous flexibility on each level Process Business process execution Service Check customer address Verify customer credit Determine productavailability Calculate shipping charges Application/System Marketing systems Sales systems Service systems Corporate systems Business systems Trading Systems Each level opens up considerable project opportunities – with distinct clients & requirements.

21. Defining the Conceptual Business Structure for SOEProcedures, Defined Processes, and Ad Hoc Interactions Understanding the Hubs and Spokes 1 • Enterprise Operations: The “Hub” of critical corporate data management and maintenance for CxO level use, auditors, etc… • Enterprise Procedures: The “spokes” serve as vehicles for delivering data across the company, typically already exist via current ERP systems • Operational Departments: The “rim” sees many new department specific processes defined by day-to-day activities • Departmental Process: Essential to individual departments, they provide more value to business owners than to the Enterprise • Inter-Enterprise Procedures / Ad Hoc Interactions: Additional processes developed to manage daily interactions/ requirements Enterprise Operations (“Enterprise Hub”) 4 Departmental Process 2 Enterprise Procedure (“Spokes”) 5 Ad Hoc Interactions 3 Operational Departments (“The Rims”) 5 Inter- Enterprise Procedure

22. Supporting a GTM Initiative with an SoEAI solution stack The Issue A compelling reason to act Service Oriented Enterprise Delivery of Business Value To the Business Owner Service Oriented Architecture The method to deliver the requirement To the Project Manager Service Oriented Infrastructure The capability to provision technology Services in a cost effective manner To the MIS department

23. SOE as a business strategy The Issue Service Oriented Enterprise Service Oriented Architecture Service Oriented Infrastructure A compelling reason to act Differentiated and Unique tasks owned And directly paid for By the business unit 1) Insist on redefinition of the business requirement As a series of granular tasks with a separate flow 2) Restrict the ‘ownership’ to those unique tasks that Have been defined, recognise the duplicated tasks for reuse Common and shared Business tasks & orchestrated Procedures Supplied ‘utility’ Style and Bench Marked externally Move duplicated tasks down 1) Aim to extend the concept of IT ‘utility’ style shared Services to an increasing number of shared ‘utility’ Supported business services 2) Map business processes for the enterprise and define Types i.e. enterprise procedure, department process, etc Move common technology up 1) Continue to apply ‘virtual’ management to shared hardware And move to introducing ‘shared’ common software as well 2)Introduce horizontal technology layer management with new Responsibilities, tools and management capabilities

24. b How will an Enterprise adopt these new capabilities? Mobility Externally created Value through more efficient market interaction Services Oriented Enterprise Internal Value created through process redesign Services Oriented Architecture Internal Cost Reduction by shared resources Services Oriented Infrastructure License cost savings Processbased • Linux • Platform Rationalisation • Storage Area Networks • Server Virtualisation • Grid Computing • Security • Web Services • Business Intelligence • Management tools • Development Tools • Service Orientated Architecture • Mobility • Event Driven • Real Innovation • ………… etc

25. Positioning Major Technology Vendors in SOE/SOA/SOI A technology driven exercise to understand Current Capabilities and Strategic Directions

26. Some thoughts on major technology players positioning – SOE/SOA/SOI The Issue Service Oriented Enterprise SAP Oracle Microsoft Service Oriented Architecture Service Oriented Architecture IBM SUN Service Oriented Infrastructure Service Oriented Infrastructure HP Intel Cisco

27. Some thoughts on major technology players positioning – SOE/SOA/SOIThe conflicting ambitions to control the SOA layer The Issue Service Oriented Enterprise SAP Oracle Microsoft Service Oriented Architecture Service Oriented Architecture IBM Conflicting Ambitions SUN Service Oriented Infrastructure Service Oriented Infrastructure HP Intel Cisco

28. Some thoughts on major technology players positioning - SOA Layer Mendocino Integrates MS & SAP SAP Moving from Enterprise Resource Applications through Middleware to providing ‘Services’ Microsoft Moving from the Integration of users Information by Collaboration Towards back end Application integration IBM Moving from the Integrity of enterprise Applications in the data centre and Back office through EAI towards ‘users’ And ‘services’ SOA Middleware The controlling ‘Sweet Spot’ Oracle Moving from Enterprise Resource Applications through Middleware to providing ‘Services’ Computing Services Inc EAI etc Back Office Applications inc ERP etc Front Office Applications inc Desktops etc Services Interconnecting everything

29. Some thoughts on major technology players positioning – SOI layer SOE Business Services Google integration Compliance Manager SOA Services Orchestration Microsoft integration WebSphere Services on Networks SOA Manager JES Package IBM A strongly integrated Vertical model designed To optimise the provision Of ‘independent’ technology enabling capabilities across the SOI and the SOA layers Including database provisioning and links to Cisco network based ‘services’ Sun Neutral to the business Services providers Extensive range of SOI & SOA JAVA software Advanced hardware based Capabilities for high Performance computing HP Neutral to the SOA layer seen as ‘agnostic’ by SAP, Microsoft, Oracle, etc Extensive Horizontal Software to optimise & Integrate all SOI resources SOI Technology Services and Operational Enablement Nokia, Google, etc Variety of relationships to Support java based ‘smartphones’ and Internet based services Cisco Neutral to everyone as the leading Network provider but repositioning To be able transport / route around Services on the network Security manager