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IBM SOA EXECUTIVE SUMMIT

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1 IBM SOA EXECUTIVE SUMMIT
Sydney, 17 July 2007

2 Deon Newman Director, SOA Marketing
Business Process Management Enabled by SOA Deon Newman Director, SOA Marketing

3 CEO’s Cite Innovation as Top Priority for Business
Business Model Innovation delivers the greatest returns CEO’s Cite Innovation as Top Priority for Business Results of 765 CEO interviews worldwide: Out Performers place 2X emphasis on Business Model innovation than under performers CEOs are under intense pressure to innovate Corporate culture is critical to sustained innovation Business model innovation is the new strategic differentiator Main Point: Innovation is a priority; Business Model Innovation differentiates the outperformers from the underperformers by 2X’s “Constant reinvention is the central necessity at GE… We’re all just a moment away from commodity hell.” – Jeffrey Immelt, Chairman and CEO, GE CEOs are under intense pressure to innovate There’s a “glass half full/half empty” dichotomy at work here: 65 percent of CEOs recognize that their organizations must make fundamental changes to respond to external forces in the next two years. Yet fewer than half believe they have managed this kind of change successfully in the past. Business model innovation is the new strategic differentiator This is an important departure from the 2004 survey, and reflects a growing sophistication and understanding about how and where innovation occurs. While a lot of the current buzz about innovation begins — and ends — with product and service innovation, the survey findings make it very clear that that view is too limited: Companies that were most successful at growing their profitability had a much stronger focus on business model innovation than others. Said one CEO, "Products and services can be copied. The business model is the differentiator." The study shows that market outperformers are the ones who put the twice the emphasis on business model innovation than the market underperformers. Fully 65 percent of chief executives and other leaders say they will have to make fundamental changes in their businesses over the next two years Source: IBM 2006 Global CEO Study

4 Which key business priorities will your IT organization implement or support in 2007?
Main Point – This is a recent study done by CMP Media which asked companies what their top IT priorities were. As you can see, the top two priorities involved improving business processes and providing better visibility into the business. Clearly these are BPM priorities. However, I would also argue that the remaining priorities – improving customer service, worker productivity, business agility, imrpoved ROI on IT investments, and customer collaboration – are also all BPM projects. Note: Multiple responses allowed. Data: InformationWeek Research Outlook 2007 study of 300 business technology professionals

5 Why? Inability to modify processes on the fly.
Inflexible and Outdated Processes Are the Root Cause of Many Corporate Disasters Major Airline strands passengers on runway for 10 hours – no food, overflowing toilets Market-leading cell-phone provider exits market after small fire Main Point: Processes, or the inefficient or inflexible nature of them, and the inability of companies to adapt, evolve, and innovate, will spell the demise of their exist Example 1: Jet Blue – Had 9 planes on tarmac, customers trapped in sweltering cabins, with virtually no food and stinking toilets. Company failed to cancel flights but planes kept landing. Causing a traffic jam on the ground. Same lean organization was ill-prepared for a single anomoly. Crew members couldn’t get through an overwhelmed communication system. Reservations system could not handle flood of calls from passengers trying to figure out if they should go to the airport… Quotes from InformationWeek and CIO: “So when the ice storms hit they had no flexibility in their operations; they had no way to respond effectively; they couldn't be agile. They had no Plan B (and winners always have Plan B).” Quotes from CEO: “In our high-change, real time world, responsive-ness trumps efficiency. Companies ignore this at their own risk.” On May 11, 2007, Jet Blue corporation asks their founder, David Neeleman to step down from his role as CEO (he will continue as chariman) but the move signifies the company’s falling confidence in his ability to manage them through the winter-storm crisis Example 2: Nokia / Erricson: IT BEGAN on a stormy evening in New Mexico in March 2000 when a bolt of lightning hit a power line. The temporary loss of electricity knocked out the cooling fans in a furnace at a Philips semiconductor plant in Albuquerque. A fire started, but was put out by staff within minutes. By the time the fire brigade arrived, there was nothing for them to do but inspect the building and fill out a report. The damage seemed to be minor: eight trays of wafers containing the miniature circuitry to make several thousand chips for mobile phones had been destroyed. After a good clean-up, the company expected to resume production within a week. That is what the plant told its two biggest customers, Sweden's Ericsson and Finland's Nokia, who were vying for leadership in the booming mobile-handset market. Nokia's supply-chain managers had realised within two days that there was a problem when their computer systems showed some shipments were being held up. Delays of a few days are not uncommon in manufacturing and a limited number of back-up components are usually held to cope with such eventualities. But whereas Ericsson was content to let the delay take its course, Nokia immediately put the Philips plant on a watchlist to be closely monitored in case things got worse. They did. Semiconductor fabrication plants have to be kept spotlessly clean, but on the night of the fire, when staff were rushing around and firemen were tramping in and out, smoke and soot had contaminated a much larger area of the plant than had first been thought. Production could be halted for months. By the time the full extent of the disruption became clear, Nokia had already started locking up all the alternative sources for the chips. That left Ericsson with a serious parts shortage. The company, having decided some time earlier to simplify its supply chain by single-sourcing some of its components, including the Philips chips, had no plan B. This severely limited its ability to launch a new generation of handsets, which in turn contributed to huge losses in the Swedish company's mobile-phone division. In 2001 Ericsson decided to quit making handsets on its own. Instead, it put that part of its business into a joint venture with Sony. This has become a classic case study for supply-chain experts and risk consultants. The version above is taken from "The Resilient Enterprise" by MIT's Mr Sheffi and "Logistics and Supply Chain Management" by Cranfield's Mr Christopher. It illustrates the value of speed and flexibility in a supply chain. As Mr Sheffi puts it: "Nokia's heightened awareness allowed it to identify the severity of the disruption faster, leading it to take timely actions and lock up the resources for recovery." Other examples Example 3: In 1998, Netflix opens for business with an online video rental business model. Flat fee plus shipping per DVD. It begins to build out it’s infrastructure of supply chain and distribution centers. By 1999, they launch their monthly subscription for ‘all-you-can-it’ service. At the sametime Blockbuster launches its rewarded program – a paid membership program to encourage customers to rent more frequently. Through the next 3 years Netflix continues to build its customer base and infrastructure while Blockbuster focuses on its traditional business. In 2002, Netflix goes public and by 2003 they are profitable. In 2002, Walmart also enters in the online DVD market. This is probably when the “Oh Crap” moment happened at Blockbuster. 2 years later Blockbuster launches it’s online business to compete with Netflix – it’s a ‘me-too’ replica of the Netflix model although many of Blockbuster’s processes are duplicated and separate from the processes it uses for it’s bricks and mortar business. Also, many processes are still manual in order to get up and running quickly. In early 2006, Netflix files patent infringement suits against Blockbuster alleging that Blockbuster infringed on it’s ‘dynamic queueing’ process and its communication and delivery processes. In late 2006, Blockbuster relaunches its online business with a hybrid offering that combines online and instore rentals. It hopes that this will help differentiate its service and combat Netflix. So how could Blockbuster have avoided this? Gotten earlier warning? Reacted faster? Let’s see how BPM could have helped…. Example 4: Montgomery Ward / Woolworth’s / K-Mart /  A&P, Safeway, others…all succumbing to Wal-Mart’s efficincy, logistical mastery, and innovative use of technology. Why? Inability to modify processes on the fly.

6 Business Process Management is a Discipline…
Processes aren’t documented Bottlenecks prevent efficiency Limited visibility into performance Complex integration across multiple processes Process change is cumbersome KPIs not defined BPM Solves: Expertise that Delivers BPM Software that Enables BPM BPM Includes: Rules Engine Policies Business Logic Workflow Models Integration Modeling Monitoring Forms Methodology Process Knowledge Metrics Main Point: So let’s define what IBM means by BPM and what we mean by “BPM Enabled by SOA”. First, what is BPM: Business Process Management is a discipline combining software capabilities and business expertise to accelerate process improvement and facilitate business innovation Next, What is Business Process Management Enabled by SOA? ... BPM enabled by SOA provides a flexible architectural style in support of efficient process change and rapid process deployment Point 1: IBM’s leadership in the BPM market is established (Gartner/Forrester have recognized as much). We define BPM is a “discipline” and requires both software and expertise to deliver full value. Point 2: The other main point of this chart is to associate SOA with BPM and describe how SOA makes BPM better, stronger, faster…preparing the company for the inevitable future change in process activity AND the future change in supporting IT. BPM ENABLED BY SOA means you can change the process w/o affecting the IT OR change the IT with out affecting the process. For success in BPM projects, it is critical to utilize not only SOA-enabled software, but also the expertise to deliver and fulfill the promise of BPM. The combination of software and expertise is what IBM is calling “Higher Value BPM”. First, let’s define BPM: Business process management (BPM) governs an organization’s cross-functional, core business processes. It achieves strategic business objectives by directing the deployment of resources from across the organization into efficient processes that create customer value. This focus on driving overall bottom line success by integrating verticals and optimizing core work (e.g. order-to-cash, integrated product development, integrated supply chain) differentiates BPM from traditional functional management disciplines. In addition, intrinsic to BPM is the principle of continuous improvement, perpetually increasing value generation and sustaining market competitiveness (or dominance) of the organization. The benefits to a customer of higher-value bpm include: Process insight and optimization – According to Gartner, the first step in many engagements is to simply monitor what is happening. Having the ability to truly understand what is happening inside the business will then cement and facilitate the ability to enhance the most important and impactful parts of an organization.. Accelerated process improvement - It’s not just about “improvement and optimization”…it’s about “how fast you can identify the parts of the business that will drive change and how fast you can implement and deploy those changes to make the improvement happen Flexible design for future change – Finally, it’s critical to not only make the changes once, but to be prepared for the inevitable future changes that every organization faces. Using an SOA complimented by best practices, will ensure the deployed and optimized processes are First, let’s discuss expertise: “Expertise” does not equate simply to “implementation services”. Sure, expertise can be in the form of services…but today, it’s much, much more than that. Expertise is the knowledge about the BPM engagement…but it can be packaged in different forms. Expertise can be packaged as services but also as “pre-built” components based on best practices. “pre-built process models, and agreed-to methods. For software, we based the set of capabilities that we bring to market on discussions with hundreds of customers, and in-depth reviews with leading industry analysts, such as Gartner’s David McCoy, Jim Sinur, and Janelle Hill, Forrester’s Connie Moore and Ken Vollmer, and independent analysts such as Bruce Silver, Paul Harmon, and others. The key capabilities include modeling tools with simulation and analysis, policies and rules, integrated development environment, run-times, and a management environment that includes dashboards and monitoring. Repositories such as service repositories to register and house SOA based business services help accelerate projects. Bringing together the most advanced SOA based software capabilities along with broad expertise will provide a higher-value BPM solution. BPM governs organizational and operational activities

7 Optimizing the business is the ultimate goal
lower BPM adoption maturity higher higher Process optimization Transformation Process monitoring Business insight Compliance & consistency Process execution Value to shareholders and competitiveness IT agility SOA Efficiency Knowledge Main Point: This is a Forrester view of the BPM Value Proposition As companies go down their BPM journey they have evolving goals and evolving levels of maturity. This is a view from Forrester Research which shows the different levels of value as well as who in the organization is a stakeholder in realizing that value. As we go through the BPM value chain, we’ll see how these levels of maturity are achieved. Process modeling lower Workers, supervisors and managers CIO CFO CXO CEO Customers and partners Stakeholders Entire contents © 2007  Forrester Research, Inc. All rights reserved.

8 BPM Starts and Ends with Business Value
Collaboration Process Governance Business Strategy Track metrics to measure process performance Harvest data to optimize process performance Achieve insight and receive alerts to small problems before they become big ones Optimize Execute Deploy on a SOA platform Automate processes improve profitability Facilitate human interaction to increase work efficiency and reduce errors Define Align business strategy and execution Communicate effectively between business and IT Collaborate to improve business process design Leverage industry standards and frameworks Understand Assess, capture, and analyze core behavior Understand value processes Identify redundant, duplicated, and inefficient processes

9 BPM and SOA – Better Together
“…SOA and BPM initiatives…are more successful and the benefits are compounded when they are united” “Organizations that align their BPM and SOA initiatives in 2007 will double their likelihood of becoming an industry leader by 2011” Main Point: Gartner publishes paper “SOA and BPM are Better together” Feb 2007. In February 2007, Gartner Research published a report tauting the synergies between BPM and SOA and citing how the benefits are compounded when BPM and SOA are used together. Of course, we at IBM have been saying that all along but we were happy to see the finally agreed with us. BPM and SOA are becoming business and IT imperatives for companies that want to become and maintain leadership in their industry. Companies that start early will be ahead of the pack. Source: BPM and SOA, Better Together, Paolo Malinverno, Janelle B. Hill, Gartner, Feb 2007.

10 ….and here’s why SOA at the core of BPM:
SOA improves how you design, manage, and optimize your business processes by enabling: Solution Building Efficiency Reuse of existing assets Flexibility in change SOA at the core of BPM: Services (Application & Information) Operational Systems (Application & Information Assets) Business Processes Data Registry Application Content External Main Point: Business processes and the underlying IT infrastructure treated as standardized components (services) to be reused and combined to address changing business priorities BPM Enabled by SOA Builds Flexibility on Your Current Investments Probably all of you have already invested in critical IT systems and applications. At the same time as these systems and applications serve a business purpose they also, typically, tie you down to a specific way of running the business. It takes too long or is impossible to change the way the business runs because of the nature of the systems you have built or bought. There are two very important criteria for success as you move to a BPM and SOA way of doing business: First , don’t rip and replace – i.e. continue to use existing IT investments wherever possible; Second, leverage existing I/T investments in new flexible ways for new advantage in the market. BPM and SOA allow you to do both and this is fundamental to why companies are getting excited about the approach. SOA is the next stage on the “integration” continuum. The approach is generating excitement because, done right, it allows you to leverage what you have already done in a cost effective manner

11 BPM & SOA Drove Business and IT Success
IBM & SOA at Wachovia BPM & SOA Drove Business and IT Success Main Point: Sometimes it’s best to hear it straight from a customer. Let’s see how SOA from IBM drove business and IT success a real company. Here’s what Wachovia has to say. They are one of the many customers that IBM has helped implement SOA for better business flexibility. <technical note – put the video (entitled wachovia_BQ_ exe) and this ppt file on your desktop and run the ppt in screenshow mode. Click the Wachovia icon and run the video directly. Expand video to full-screen> Troubleshooting: Place both the Wachovia Video and Presentation #1 on your computer "Desktop" Open Presentation #1 and go to the Wachovia slide (chart #12) Right-click on the Wachovia icon and select "Remove Hyperlink" Right-click again on the Wachovia icon and select "Hyperlink" Point the hyperlink to the Wachovia Video file located on your desktop and click "OK" Run the presentation in SlideShow mode, go to the Wachovia Slide, and then click on the Wachovia icon Depending on your security settings, you may get a warning message - just choose "OK"

12 Customers can start BPM in different ways
Five Flexible Starting Points for BPM Customers can start BPM in different ways Business Process Management Modeling & Simulation Business Activity Monitoring Process Automation Rules and Pre-built Frameworks Content Centric Processing Main Point: Customers can start from any number of places depending on their type of BPM project. There is no “required” starting point because the software offerings are interchangeable, and can be deployed independently, or in combination. The components are comprised of modeling and simulation, business activity monitoring, process execution, rules and pre-built frameworks, and content. IBM is a leader in providing a combination of the 5 core software components. Design and simulate business processes Track performance, gain insight, and take action Choreograph processes across applications and systems Manage process rules and accelerate design and implementation time Manage processes where content is used as input for a decision or produced as the output

13 Business Level Modeling and Simulation
Use ROI reports to compare and analyze Results Model “what if” scenarios Use simulation capabilities to: Assess risk mitigation Make investment decisions Calculate value of improvements Main Point: Processes are important to not only understand, but it is also important to know how they will impact the business. Quote: Business process simulation and analysis is a critical component of BPM. Predicating your business outcomes is invaluable, it can determine the go or no go of a project, justify your resource investments, help you determine what will yield the best bang for your buck. Once you have determined the best project investment, you can better plan and budget. After deployment you can continue to optimize your business by examining bottlenecks or workload imbalances, and stop any issues while the process executes in production and before problems arise. Its important to understand what makes your business special, or in other words, what differentiates your business from your competitions. First you must identify those core processes that make you stand out from the competition. Once you have identified those, you should now either import any Visio model you may have already started, or create the new model. Once you have the model of your process, you will need to identify the tasks that will have the greatest impact to your process performance. This can be done by running a simulation based on the criteria you provide that reflects your processes environment. If you believe that this process is not running at an optimal level, or if you find bottle necks or workload imbalances, you can modify the model to create what if or “to-be” scenarios. Iterative and continuous improvement Import Visio Models WebSphere Business Modeler

14 Support for Visio Documentation
IBM Process Models Modeling & Simulation 17 Industry-Specific Process Maps and Models based on IBM best practices and the Standards-Based Process Classification Framework Helps clients kick-start process-optimization engagements. Support for Visio Documentation Both Modeling tools support leveraging existing Visio documents WebSphere Business Modeler can import Visio drawings FileNet P8 Process Designer contains Visio BPMN palette Industry-specific process models for 17 industries built to APQC process classification framework Provides a reference template to accelerate business process analysis Rapid process application development built with industry context and standards BPMN standard based process modeling using Visio with ability to map it to XPDL for execution Business analyst and other non-IT staff can model their process, document them, and communicate them to other organizations including IT Rapid process application development; high-fidelity mapping business requirements to IT

15 Identify activities and areas for improvement
Driving force behind BPM Adoption Synchronize SAP ERP system with various production plant software systems Manual processes requiring data gathering, was time consuming and error prone BPM Disguised as: Product Lifecycle Management (Plant Operations) Supply Chain (Inventory Management) Modeled processes for visibility Aligned business and technology priorities Used adaptors to integrate custom apps with SAP Deployed improved processes on an SOA Newly Automated System Running on WebSphere SOA Foundation Increases Productivity and Reduces Errors for SELEX About SELEX: SELEX Sistemi Integrati (SELEX), located in Rome, Italy, is a world leader in the design, manufacture, supply, and integration of defense systems. SELEX also creates sensors, radars, mission critical command and control and management systems, and supplies them to defense forces as well as civil air and sea traffic authorities worldwide. The company plays a key role as Systems Integrator both for its parent company, Finmeccanica, and in the international arena. With over 3,000 dedicated personnel, mainly employed in the design and development of high technology, SELEX systems are in service in over 100 countries. The company has been a key supplier to NATO for over 30 years. Business Challenge: SELEX uses a central SAP administration system to submit information to the top management of parent company Finmeccanica. Previously, the company used manual processes to synchronize the SAP system with its Primavera Enterprise plant production software, which is software used to manage the production of goods. Gathering, inserting and assessing the data manually was time consuming and error prone, so SELEX sought to implement an automated solution that would speed the integration process and avoid the potential for human error. Our Solution: SELEX considered different vendors and options, evaluating functionality, transactions per second and strategic future visions. Though the defense technology business sought a point-to-point solution, IBM endorsed a service-oriented architecture (SOA) that would enable the company to develop and modify integration applications to meet its future needs. Ultimately, SELEX implemented IBM WebSphere products and services because the company was impressed with their functionality and with IBM's forward-looking vision. IBM WebSphere Lab Services modeled the processes for the client using IBM WebSphere Business Modeler version 6. With the concept developed, lab services specialists used IBM WebSphere Integration Developer version 6 to create the solution, including integration flows, mapped data and mediation flows. To create the integrated solution, the IBM team deployed IBM WebSphere Business Integration Adapter for mySAP version 6 to integrate with the SAP system and developed custom-coded software to integrate with the Primavera application. The newly developed solution runs on an IBM WebSphere Process Server version 6 platform. The integrated solution, called SDGA, enables individual SELEX plants to update the parent company's central system and the central system to send data directly to each SELEX plant. The solution was deployed in four short months. The project began in February 2006 and SELEX went live with the solution in July 2006. Value to SELEX: By achieving systems integration using WebSphere Integration Developer and WebSphere Business Integration Adapter for mySAP, SELEX now enjoys automatic updates between systems, eliminating the need for human intervention and thereby significantly reducing errors. Employee productivity will also increase with the new system since the automation makes data available almost real-time. As a SOA foundation, the WebSphere Process Server platform offered better functionality than its competitors, allowed SELEX to customize their environment and positions them to meet future needs for integration with additional systems and applications. SELEX also values the IBM team for its in-depth knowledge and professionalism: -- the team produced a successful solution that allowed the client to go live in just four short months. Value to IBM: Due to the success of the SDGA project, there are now significant opportunities for follow-on business with this client. IBM and SELEX are currently in pre-contract negotiations for the second phase of the project called SDGA2. SDGA2 is an extension of the first project and will include a number of significant additions such as SOA governance, modeling, monitoring and high performance. Additionally, due in large part to the efforts of the WebSphere Services Sales team, Alenia Aeronautica, a sister company to SELEX, was encouraged by the success of the SELEX project and has now accelerated the exploration of IBM Business Integration Software. Similarly, MBDA, another sister company, is also looking at IBM's success at SELEX and considering a future partnership with IBM. In short, the initial project, which originally drove150K Euro in revenue, is playing a significant role in building confidence and fostering other opportunities. Rapid Solution Deployment - 4 Months from Concept to Implementation Reduced potential human error with process-controlled automation

16 Business Activity Monitoring
Scorecards Key Performance Indicators for business units Collaboration Work with teams to resolve situations Business Alerts Notification of situations that require response Reports & Analyses Understanding trends by combining real-time performance and historical information WebSphere Business Monitor provides users with the capability to monitor and optimize their business processes in real time. Through very visual dashboards, they can receive immediate notification based upon triggers and alerts they’ve set, and take appropriate actions. Detailed reports are provided for more in-dept analysis. And from the Key Performance Indicators and metrics that have been defined in the WebSphere Business Modeler, customers can pro-actively monitor those critical aspects of their enterprise wide processes. External Information Information affecting performance WebSphere Business Monitor

17 Business Activity Monitoring
Expanded BAM Business Activity Monitoring Monitoring Third Party Systems Providing adapters and support for pulling information from a variety of sources. Industry Dashboards Templates for industry verticals including key methodologies Predefined, full configurable dashboard templates Human Task Mgmt. Extended business activity monitoring to monitor other 3rd party systems. Access to more sources of information to use for calculating Key Performance Indicators and Metrics Sample code built on top of existing WBI Adapters that provide patterns for integrating into databases and packaged applications such as SAP Industry dashboards Access to actionable information that is delivered in industry specific dashbaords Faster time to value to provide dashboards to the line of business Business activity monitoring for human tasks Manage performance and workload of people participating in business activities with pre-defined dashboards Faster time to value for providing human task management to the line of business users BPM Dashboards for human task monitoring and management Monitor human tasks in process BPM Dashboards will provide an optimized experience for those roles responsible for managing the people side of process.

18 NYS Dept of Taxation and Finance
Business Challenge: NY State Dept of Taxation and Finance (NYS DTF) processes 11 million personal and 2 million corporate returns annually using aging technology that can’t keep up with the demands of citizens and users. NYS DTF needs systems and tools that are flexible, permit faster change and reduce overall costs. Solution: Leveraging SOA and BPM, NYS DTF is rapidly transforming their systems, data, people, and business processes to be more functional, flexible and responsive to citizens, users and legislation. Traditional mainframe batch processing is shifting to transactional. Manual processes are transforming to automated business processes. Real-time business activity monitoring is replacing daily printed run reports. Results: Rapid modernization of legacy batch systems to transactional. More channels to enhance voluntary compliance. Web services and XML linkage to IRS for corporate taxes. High component reuse, lowered costs. Reduced errors and business exceptions. Higher value business metrics. Implementation Details: WebSphere Business Modeler, Business Monitor, Process Server, Integration Developer, Application Server, Flat File Adapter, Commerce, DB2 V9 pureXML, DataStage, Workplace Forms, CICS Transaction Gateway, Rational Suite, Tivoli Composite Application Monitor. Main Point: This is an excellent example of a best in class, industry leader utilizing IBM’s WebSphere portfolio to deliver high volume BAM and BPM functionality. Note: Brian Digman, CIO of NY State Tax and Finance, will speak to anlaysts in a 1:many meeting. Customer background: The New York State Department of Taxation and Finance (NYSDTF) is the revenue-generating arm of the New York state government and manages all of the state's taxation processes. Its responsibilities include managing the state's personal income tax, corporate tax, and sales and use taxes. The agency aims to provide a fair system of tax administration, to be accessible and responsive to taxpayers, and to contribute to a favorable economic climate. Summary: NYSDTF was looking for a way to accelerate the processing of tax returns while reducing the risk of losing paper files. The department had been using a rather cumbersome method of receiving and processing large batch files from banks and other customers in the financial industry. The files would be received by NYSDTF and kept in storage until they were scanned into the system and manually integrated with an e-MPIRE tax-processing application. Not only was this process time-consuming, but often the batch files didn't translate correctly into the system, resulting in data errors on tax returns. Furthermore, the files had the potential to be lost while in storage. To remedy the issue, NYSDTF contracted IBM to deliver a new solution that automates many of the tax process tasks, while enabling the client to efficiently process batch files. To maximize the benefit of the new solution, NYSDTF further engaged IBM to provide skills transfer to its core team of systems engineers and developers. The client started by implementing a robust suite of WebSphere process integration tools, including IBM WebSphere Business Modeler V6, IBM WebSphere Integration Developer V6 and IBM WebSphere Process Server V6 software. By using powerful IBM WebSphere software to automate its tax-processing workflow and streamline the way it handles large batch files, NYSDTF can now process tax returns in a timelier manner. Furthermore, now that batch files are being sent electronically, the risk of losing the files in storage has been substantially reduced. Business need NYSDTF was looking for a way to accelerate the processing of tax returns while reducing the risk of losing paper files. The department had been using a rather cumbersome method of receiving and processing large batch files from banks and other customers in the financial industry. The files would be received by NYSDTF and kept in storage until they were scanned into the system and manually integrated with an e-MPIRE tax-processing application. Not only was this process time-consuming, but often the batch files didn't translate correctly into the system, resulting in data errors on tax returns. Furthermore, the files had the potential to be lost while in storage. Recognizing the serious nature of this issue, NYSDTF set about the task of transforming the way it received and processed batch files. But like many government agencies, NYSDTF had difficulty changing its internal functions because of budget, time and resource constraints.Back to top Solution implementation To remedy the issue, NYSDTF contracted IBM to deliver a new solution that enables the client to efficiently process batch files. To maximize the benefit of the new solution, NYSDTF further engaged IBM to provide skills transfer to its core team of systems engineers and developers. The client started by implementing a robust suite of WebSphere process integration tools, including IBM WebSphere Business Modeler V6, IBM WebSphere Integration Developer V6 and IBM WebSphere Process Server V6 software. Thus properly equipped to achieve tight process integration, the client leveraged the expertise of IBM WebSphere Software Services to teach two classes at its headquarters in Albany. The first course - WebSphere Business Modeler for Business Practice Management - provided the client with a comprehensive understanding of how its previous business processes worked and how they could be streamlined and improved upon. The client learned how to gather requirements, set goals, create and analyze reports, and update business process models. In addition, the class taught NYSDTF staff how to best use the WebSphere Business Modeler software for performance modeling and Web publishing purposes. In the second course - Integration Using WebSphere Integration Developer and WebSphere Process Server - the client learned how to use the WebSphere Integration Developer platform to integrate various business applications and technologies for optimal processing efficiency. Specifically, NYSDTF used the training to integrate its e-MPIRE application with the WebSphere Process Server application and a J2EE Connector Architecture (JCA) adapter, which will receive the large batch files. Under the new process, banks and the client's external load-processing vendor send large batch files electronically. When the JCA adapter receives the files, it breaks them down into smaller, more manageable data "chunks." These chunks are then passed on to the WebSphere Process Server software, which maps the input of the files into special fields and seamlessly delivers the data to the e-MPIRE application for processing. Back to top Benefit of the solution By using powerful IBM WebSphere software to automate its tax-processing workflow and streamline the way it handles large batch files, NYSDTF can now process tax returns in a timelier manner. The seamless, tight integration facilitated by the WebSphere Integration Developer software helps to promote error-free data transfer between the WebSphere Process Server platform and the client's e-MPIRE application. Furthermore, now that batch files are being sent electronically, the risk of losing the files in storage has been substantially reduced. NYSDTF credits a large portion of this project's success to the efficient, insightful onsite courses taught by IBM WebSphere Software Services. As a result of its training, the client's core group of systems engineers and developers was easily able to foster the integration needed to promote quick, efficient processing of batch files. Solutions/Offerings Software: WebSphere: WebSphere Process Server, WebSphere Business Modeler, WebSphere Integration Developer, WebSphere Business Monitor WebSphere Software Services: WTTE - WebSphere Training and Technical Enablement

19 Process Choreography and Automation
Transform your business from this… Runtime for end-to-end SOA-based process automation Flexible, reliable, scaleable, secure Integrated ESB for Range and Reach Seamless access to all available services Robust Human and System-centric BPM Capabilities: Human to Human; Human to System; System to System …to this WebSphere Process Server is the single unified Process engine for all your process needs. It provides an integrated runtime for all SOA-based process automation. It is built upon and leverages the capabilities and common services of the world class WebSphere Application Server, providing tried and tested reliability, scalability and security. Many of our competitors expect you to redesigning your solution as your business grows. With IBM WebSphere you get all this out of the box. As well as being built on WAS, WebSphere Process Server contains a fully integrated ESB. This provides seamless access to all your services so that they can be choreographed into the higher level process. SOA is really about enabling all your assets to be turned into reusable services - both technology AND HUMAN assets. Process Server leverages SOA principles and uses BPEL to choreograph the flow of services, applying business rules at each point in the process. People are your key asset, representing the “corporate knowledge” in terms of skills and expertise. WebSphere Process Server captures this knowledge and expertise and can manage simple and very complex human tasks whether they are human to human interactions or human to system. Human tasks can be fed to individual people, groups of people, substitutes and back up workers. It can also be used to reflect organisational changes and policies, enable escalations and much more. Of course being able to leverage all these capabilities requires a very flexible tool. WebSphere Integration Developer is the common tool for building SOA-based integration solutions across WebSphere Process Server, WebSphere ESB and Adapters. Users can construct process and integration solutions using drag and drop technology without having a working knowledge of Java and can rapidly generate business user interfaces at any point in the process using simplified wizards. It simplifies integration with rich features that accelerate the adoption of SOA by rendering existing IT assets as service components, encouraging reuse and efficiency. WebSphere Integration Developer ships with built-in , FTP, Flat File, and JDBC adapters for development and production use. It also bundles packaged application adapters (SAP, PeopleSoft, Oracle E-business, JD Edwards) for development use. Governance underpins SOA and BPM implementations. WebSphere Service Registry and Repository integration with WebSphere Process Server provides true end-to-end governance for all services, dynamically discovering and invoking services and service metadata information at runtime. This allows real-time process behavior adaptation. Last of all, if WebSphere Process Server is the engine at the heart of your business process management and process automation solutions then z/OS is the ultimate platform to run your mission critical processes on, providing the highest levels of availability and 24x7 business continuity. WPS, WESB, WID v for z/OS Gad March 2007. BPM for the Mainframe

20 BPM for the Mainframe Process Automation High powered process engine on a high powered platform New business user client generation in WebSphere Integration Developer for processes deployed on z/OS New Adapters for z/OS: , JDBC, FTP, Flat File, SAP BPM and SOA governance on the Mainframe through WebSphere Service Registry and Repository IBM Content Manager with Process Server added content-centric capabilities

21 Rules and Pre-built Frameworks
Industry Frameworks Service-Oriented Business Solutions Frameworks Based on Industry Standards Combination of IBM and Business Partner Assets Rules and Pre-built Frameworks Industry Content Packs Business Service Templates to accelerate deployments Expanded industry coverage for Banking and Telecommunications WebSphere Business Services Fabric National Language Support Alignment with IBM SOA Foundation Additional Standard Operation Environments

22 Content Centric Processing
Imaging/Capture Doc Mgmt Web Content Mgt. Compliance Records Mgt. Mgt. Discovery Process Dev Framework Doc Routing Workflow Main Point: The IBM FileNet P8 BPM product rounds out our BPM portfolio by providing strong content centric processing capabilities. The IBM FileNet product has strong linkage between the process and content – combining enterprise content management (ECM) with process design and execution. This combination is especially effective in areas such as compliance where advanced eForm capabilities allow the system to capture, record, and maintain content related to the process.

23 WebSphere & FileNet Roadmap BPM Enhancements
Innovation Investment Protection Integration Common Service Registry and Repository Common Modeling, Monitoring Tool Enhanced run-time integration Main Point: To expand and grow capabilities across the full spectrum of BPM opportunities, IBM is continuing to invest in enhancements in the integration of content-centric BPM offered through IBM FileNet with the broader set of BPM offerings. Key highlights include: Phase 1 Interoperability Run time WebSphere v6.02 Run Time: Strengthening of the interoperability between the run-times. Certainly, when we look at customers today, there are many BPM engagements that require the combined capabilities of FileNet and WebSphere. Addressing a full-spectrum of process improvement challenges requires the ability to manage content, integrate applications, deliver end-to-end process orchestration and choreography, and do so in an enterprise, value-chain ecosystem environment. Only IBM can offer the full set of capabilities to address the most sophisticated and robust BPM requirements Phase 2 Integration Design Time, Monitoring, Runtime Design Time: News here is that Modeler will be able to export XPDL to be consumed by FileNet Process Designer. -Design Time Integration between FileNet P8 Process Designer v4.0 and WebSphere Business Modeler v6.02 Support Pack Monitoring: CBEs (Common Base Event, format) emitted from FileNet Business Process Manager (run-time) will allow WebSphere Business Monitor ability to manage events and monitor performance -Monitoring of both Process Engines by WebSphere Business Monitor v6.02 Support Pack WSRR: This supports IBMs BPM enabled by SOA story…giving FileNet greater SOA capabilities and furthering the governance advantages, as well. -Common Service Registry and Repository: FileNet P8 BPM v4.0 interface to WebSphere Service Registry & Repository v6.02 Bottom Line: Progress is being made to tighten linkage and, where the business demands, prioritize offerings across the portfolio Phase 3 Innovation—Investment protection Business Process Platform WebSphere + FileNet P8 Facilitate easier upgrade preserve current investments isolate customers from changes to run time environment Strategic Direction: Continued investment in WebSphere and FileNet P8 BPM portfolio to address the entire spectrum of customers’ BPM requirements Increased focus on industry expertise that matters – BPM practitioners, best practices, methodology and frameworks WebSphere Business Modeler: Will be the common modeling and simulation tool for combined deployments WebSphere Business Monitor: Will be the common BAM tool for combined deployments WebSphere Service Registry and Repository: Will be Common Services Registry & Repository across the BPM portfolio Interoperability WebSphere & FileNet Processes can invoke each other Q4 2006 3Q 2007 2008

24 BPM Enabled by SOA Services
Enhanced BPM capabilities and services to address any point in the SOA journey Integrated business solutions to accelerate deployment of new business processes Deep industry expertise Consulting methods, tools and reference materials BPM Expertise BPM Methodology Comprehensive “How-To” reference guide with services Covers both the business and IT sides of BPM Six Sigma, Lean, and other methodologies in combination with BPM software Supports Organizational and Operational Governance IBM BPM Enabled by SOA Services Offerings – It’s not about “services” …it’s about “expertise”. Expertise does not simply mean “systems integrators” or “consultants”. For BPM, expertise means “best practices packaged and delivered to provide value in the form of “frameworks”, ”templates”, “pre-built industry models”, and “assessments”. Expertise = assets and services to accelerate delivery of BPM. Complementing the BPM software enhancements are announcements supporting in-depth, industry expertise in the form of a new BPM Enabled by SOA offering and an enhanced BPM Methodology. I. The BPM Enabled by SOA services engagement The BPM Enabled by SOA Service Engagement offering addresses any point in the BPM journey. The services engagement integrates business solutions to accelerate deployment of new business processes, leveraging deep industry expertise, benchmarking best practices, methods, tools, and reference materials. This new offering is designed to help you in modeling your existing processes to isolate needed improvements, simulate new and modified processes to better understand how your business will operate in the future. Determine how your future processes can make the best use of an SOA for greater flexibility and improved performance. Define the performance measurements so you can accurately gauge your efficiency and tune your processes accordingly. Establish a governance strategy that will help you regulate business process change in a systematic way. GBS is enabling over 1000 practitioners on this offering II. BPM Methodology Additionally, an IBM developed BPM Methodology has been enhanced and expanded. The Methodology provides Line of Business Leaders with a roadmap of execution points necessary for successful BPM initiatives. Business perspectives connect overall business strategy with required process capabilities and addresses the organization and governance needed to deliver process performance. IBM has expanded the number of practitioners trained on the methodology and broadened the linkage of traditional BPM methods with the latest in SOA-enabled BPM software. Provides a framework that allows you to understand, define, execute and automate your business processes Furthermore, Documented method for implementing BPM from both a business and technical perspective Provides a reference guide to BPM methods and accelerates BPM projects Helps identifying necessary tools and technologies needed in various phases in order to efficiently and effectively manage and governance business processes Value Points Collective wisdom from hundreds of software and business consulting engagements, incorporating answers to our clients most often asked question: "How do I do it right" Provides an navigable roadmap, including key concepts including: strategy, process management, organizational change, governance, and a services architecture Developed to be executed as a partnership between client's management and project teams and IBM's services. Founded on Deming's "Plan, Do, Check, Act" - simple and executable Scalable and Flexible - Components can be executed by small businesses or large enterprises, on projects ranging from small process improvement engagements to enterprise re-engineering incorporating BPM and SOA. Numbers WW Consultancy has adopted across IBM's service delivery lines (250 Software Services GBS practitioners to date) Examples Automotive (Global Brand) Modeled entire automotive supply chain: 8 months, 400+ processes, Improved logistics operations- from 4000 vehicles/5-7 days to 4000 vehicles/3 days, while reducing land requirements Streamlined defective part returns Developed COE to drive organizational and process streamlining Each project was separate and unique, yet was formed on a universally applied discipline. As a result, the team was able to recognize how the core process fit together. The results provided real value to the whole business. Global Banking institution Methodology applied to drive out inefficiency and rework Consolidated disparate processes across multiple regions (the result of numerous acquisitions) to improve customer service and drive down costs Provided a single view of operations, giving greater visibility to operational management for further improvement

25 Summary of BPM Announcements
Expertise Enhanced BPM Methodology GBS Offering: “BPM Enabled by SOA” Standards Based Process Models Academic Initiative WebSphere / FileNet BPM Roadmap FileNet P8 4.0 Expanded BAM New Industry Dashboards Industry Content Packs, Industry Frameworks, WebSphere Bus Services Fabric Main Point: As you can see, we are heavily investing in all aspects of BPM enabled by SOA across the IBM company in both software and services. We are committed to this market and committed to provide continuing value to our customers. BPM on Mainframe

26 IBM Expands BPM Value Proposition
IBM BPM Enabled by SOA WebSphere BPM FileNet BPM People Systems Documents Content Folder Form Images, … IBM a Leader! (Forrester IC-BPMS 4Q 2006) IBM a Leader! (Forrester HC-BPM for Insurance 3Q 2006) IBM a Leader! (Forrester ECM Wave 2006 – Document Centric BPMS Wave Pending Q2 2007) Main Point: IBM now is the only vendor that can provide end-to-end BPM capabilities from modeling, through execution and management across the entire spectrum of BPM opportunities. FileNet gives IBM a critical piece to the puzzle. Initial BPM efforts were focused on integration of processes across different applications IBM extended capabilities to address broader enterprise BPM requirements enabled by SOA, including modeling and simulation, business activity monitoring and human interaction The addition of FileNet BPM to the IBM portfolio provides support for processes requiring integration of content and forms IBM is now the clear market leader in BPM with the most comprehensive set of software capabilities and business expertise

27 IBM has a complete BPMS “IBM is the first and so far the only infrastructure software supplier to offer a complete BPMS supporting the end-to-end lifecycle from analytical modeling to performance management and optimization – based entirely on service oriented architecture.” Bruce Silver, Bruce Silver Associates – The 2006 BPMS Report Main Point:

28 IBM Leads in BPM Enabled by SOA
Business Expertise: BPM Enabled by SOA Readiness Assessment (www.ibm.com/SOA) 1000+ consultants trained in BPM Methodology and BPM Enabled by SOA Engagement 20 BPM Training and Education classes available Technical Leadership Breadth of Offerings from Tooling to Runtime; From Dashboards to BAM; Modeling, Simulation, Choreography, Frameworks, and ECM All supported by SOA Market Recognition: Leader in Gartner BPA MQ Leader in Forrester Integration, Human, and Content centric BPM WAVES Vibrant Ecosystem 300+ BPM Business Partners 4000+ pre-builts assets in the SOA Business Catalog


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