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Disintegration of the monolithic mega package Peter Seddon The Department of Information Systems The University of Melbourne

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Presentation on theme: "Disintegration of the monolithic mega package Peter Seddon The Department of Information Systems The University of Melbourne"— Presentation transcript:

1 Disintegration of the monolithic mega package Peter Seddon The Department of Information Systems The University of Melbourne

2 Key proposition for today Monolithic mega packages are disintegrating. Integration in future will be via via portals, data warehouses, and real-time process integration Integration via real-time process integration seems highly likely to use web services technologies in a services-oriented architecture.

3 Plan for this presentation 1.Context: Todays PEAS market 2.The vendors world 3.The customers world 4.Gartners view of Services-oriented Architecture 5.One vendors solution to their customers integration and tailorability needs: SAP NetWeaver 6.Conclusion Background

4 1. Context: Todays Packaged Enterprise Application Software (PEAS)

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6 Buyer-side In-sideSeller-side $8B 2007?$5B e.g., SAP, i2, Manugistics, IBS Supply ChainERP $20B$26B 2007? e.g., SAP, PeopleSoft, Oracle, IFS, Navision Enterprise Applicatn Integration (EAI) $1.3B e.g., IBM, seeBeyond TIBCO, webMethods Data Warehouse $1B e.g., Oracle, Teradata e.g., Siebel, SAP, PeopleSoft, Oracle $10B$14B 2007? CRMCall/Contact Centers (IVR, ACD, CTI) e.g., Nortel, Cisco, Lucent, Genesys, Kana ( , WWW) Source of most estimates: AMR Research, June EAI from WintergreenResearch © Peter Seddon, June 2003 Overall PEAS Market 2002 $40B 2007 $60B? e.g., PTC, SDRC, SAP $2B 2001 Product Life Cycle MgtProcurement e.g., Ariba, SAP EBP, FreeMarkets $2B$3B 2007? $3.0B 2007? Packaged Enterprise Application Market 2003 Other e.g., Hogan, Reynolds, ESRI GIS, Plumtree, Moldflow, MYOB, Lotus Notes, Exchange

7 2. The Vendors World

8 The Vendors World (Murphy and Seddon 2004)

9 Community of stakeholders 1.Customers (e.g., SAP: 20,000; PeopleSoft 5,000; Oracle: 12,000) 2.Competitors 3.Reviewers (e.g., Gartner, AMR) 4.Technology (e.g., web services, portal) 5.Industry partners (upstream & downstream)

10 Partner Program

11 SAP Financials, 31 March ,000 R&D staff (= 30% of 30,000 staff) Revenue (first quarter, 2004, 1.6B): Software 30% Maintenance 40% Consulting 30% Product revenue: Gross margin 80% Software: ERP 40%, CRM 20%, SCM 20%

12 The Vendor must Innovate Highly competitive marketplace Regular, e.g., annual, upgrade cycle (just like with automobiles), and patches New technologies (e.g., web services, RFID, mobile devices) Vendor acts as an innovation amplifier (to improve the lot of the customer community) Best practice varies from customer to customer (because most customers needs are different), so the notion of software embedding best practice is somewhat misleading. The software offers menus of very good practices.

13 3. The Customers World

14 e.g., an annual cycle Implement the system Go live Use the system Improve the system Product life: 10 years plus? The Customers World

15 Factors affecting benefits after go live, a longitudinal not cross-sectional model (p.29) Integration Shang and Seddon, 2003

16 Davenport et al. (2002): % Orgs achieving benefits (n=163) 1

17 Figure 1: Four Strategies for Achieving Fit with Packaged Enterprise Application Software (PEAS) Preparedness to change Organizational Processes Preparedness to change the software High Software Modification & Enhancement System Exploration Low Process Replication Process Modification & Enhancement LowHigh 2 Shang and Seddon, 2003

18 Configuration (parameters in tables) Screen masks (e.g., 3 screens into one) Workflow programming Extended reporting User exits ERP programming (e.g., ABAP/4) Interface development Code Modification (= Customization) Source: Brehm, Heinzl, and Markus, Tailoring ERP Systems: A Spectrum of Choices, 2000 Funkies ABAPers Tailoring options in PEAS

19 Need to Institutionalize On-going Improvement The greatest single mistake that is made across the board is that firms get to Day One and go live and then break up the team. The business people who became engaged throughout the implementation think its over. …People break up, and the engine stops. Except that in days 2 through 10,000, business keeps moving… and changing. (Wilderman, Sapphire 2002) 3

20 One customers integration needs (the rationale for EAI) ERP legacy ~15 systems ERP non-SAP ~25 systems, different versions Technical systems Trading Collaborative Engineering e-Sales SAP R/3 ~30 systems, Versions B E-Procurement 10 units SAPMarkets Enterprise Buyer Professional Edition 4

21 Focus for the remainder of this presentation (the link is web-services technology) Integration 2 4 Shang and Seddon, 2003

22 4. Technology Trends: Gartners view of Services- oriented Architecture Charles Abrams and Yvonne Genovese Research Directors, Gartner Sapphire Conference, New Orleans, May NW WorldTour.pdf

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28 5. One Vendors Solution to Customers Integration and Tailorability needs: SAP NetWeaver

29 Integration Key integration goals for SAP are to: Provide single sign-on via the portal Use data warehouse to achieve archival data integration Support cooperation between heterogeneous systems, even from different vendors, and across organizations (using XML) for real-time integration. Siebel: Universal Application Network (UAN) PeopleSoft: AppConnect, process modeler Oracle: single global schema

30 SAP NetWeaver Turning the Enterprise Services Architecture Vision Into Reality We look forward to building on our long- standing relationship with SAP to deliver real business value to our customers. SAP NetWeaver Composite Application Framework PEOPLE INTEGRATION Multi channel access PortalCollaboration INFORMATION INTEGRATION Bus. Intelligence Master Data Management Knowledge Mgmt PROCESS INTEGRATION Integration Broker Business Process Mgmt APPLICATION PLATFORM J2EE DB and OS Abstraction ABAP Life Cycle Mgmt With full-fledged access to SAP NetWeaver, customers can harness the productivity and power of Microsoft.NET to connect, customize, and enhance solutions. …

31 Portal: User access to any system Portals Exchanges Applications Portal server

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33 SAPs Integration Solution: XI Exchange Infrastructure (uses XML messaging) Enterprise Hub Public Marketplace Business Unit Hub Extended E-Services Enterprise Enterprise IntegrationInter-Enterprise Integration Application Component Shared Services CRM ERP Legacy Private Exchange cServices Supply Chain Partner SCM PLM SEM Internet Sales E-Proc. Source: Plattner, Tech Ed. Los Angeles, Nov 2001

34 SAP NetWeaver Turning the Enterprise Services Architecture Vision Into Reality We look forward to building on our long- standing relationship with SAP to deliver real business value to our customers. SAP NetWeaver Composite Application Framework PEOPLE INTEGRATION Multi channel access PortalCollaboration INFORMATION INTEGRATION Bus. Intelligence Master Data Management Knowledge Mgmt PROCESS INTEGRATION Integration Broker Business Process Mgmt APPLICATION PLATFORM J2EE DB and OS Abstraction ABAP Life Cycle Mgmt With full-fledged access to SAP NetWeaver, customers can harness the productivity and power of Microsoft.NET to connect, customize, and enhance solutions. …

35 Configure (considerable flexibility in some cases) Industry solutions, e.g., 20% code different SAP Netweaver is based on open standards such as Java, XML, and web services (rather than proprietary ABAP and RFC) for customizing Use of Java (and ABAP) would not be important if customers did not need to add or modify code Componentization and xApps Tailorability

36 SAP NetWeaver Turning the Enterprise Services Architecture Vision Into Reality We look forward to building on our long- standing relationship with SAP to deliver real business value to our customers. SAP NetWeaver Composite Application Framework PEOPLE INTEGRATION Multi channel access PortalCollaboration INFORMATION INTEGRATION Bus. Intelligence Master Data Management Knowledge Mgmt PROCESS INTEGRATION Integration Broker Business Process Mgmt APPLICATION PLATFORM J2EE DB and OS Abstraction ABAP Life Cycle Mgmt With full-fledged access to SAP NetWeaver, customers can harness the productivity and power of Microsoft.NET to connect, customize, and enhance solutions. …

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38 Visual programming

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40 Tailoring through Composites & xApps Hasso Plattner, Just-retired-CEO, SAP Sapphire Conference, New Orleans, May 11-13, 2004: The Future of Enterprise Computing

41 Yvonne Genovese, Sapphire, May 2004

42 6. Conclusion

43 Key proposition for today Monolithic mega packages are disintegrating. Integration in future will be via via portals, data warehouses, and real-time process integration Integration via real-time process integration seems highly likely to use web services technologies in a services-oriented architecture.

44 Thank you Peter Seddon


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