Panel on SOA (Service Oriented Architecture) Session ID: S292868, Moscone West, Room 3007 November 11, 2007 1:30 PM -3:45 PM PST

Service Oriented Architecture SIG The SOASIG represents the interest of Oracle E-Business Suite, PeopleSoft and JDE Applications users worldwide who are interested in taking advantage of the potential of Web Services and the broader scope of Service Oriented Architecture. Our goal is to provide a forum for the sharing of information and experiences on best practices and effective use of these technologies in an Oracle environment. Also, to provide feedback from the user community to Oracle Corporation as well as to be a conduit for recommended enhancements and influence the future development direction of Web Services in Oracle Applications. Our mission is to promote the optimum benefit-in-use of Service Oriented Architecture by supporting education and training programs, events associated with its use; and through conferences, publications, and electronic meeting places dedicated to Oracle Service Oriented Architecture. http://soasig.oaug.org

SOA SIG Board Chairperson/Membership Coordinator Ron Batra, Deloitte US Vice Chairperson Lorne Kaufman, System Efficiency Secretary Kris Gazula Enhancement Coordinator, Darrin Swan, Quest Software Meeting Coordinator, Michael Rulf, USinternetworking, Inc Website Coordinator, Lance Reedy Communication Coordinator, Bipin Raj, eAlliance Newsletter Coordinator T. R. Srikanth, Fluke Corporation Past Chair, Basheer Khan, Innowave Technology Oracle Liaisons, Markus Zirn and Nishit Rao

Agenda Discuss Business/Value Proposition of SOA in an Enterprise, and a cost-benefit calculator Discuss guidelines to prepare a business case to go SOA from traditional integration methodologies. Discuss early adoption experiences of Oracle Fusion Middleware and SOA Suite Discuss best architectural practices and processes in Oracle Fusion Middleware and SOA Suite implementations Discuss recent advances in Oracle FMW Architecture in relation to integration with Oracle EBS, PSFT and JDE application suites

Panel Members Ron Batra, Deloitte Consulting – Panel Moderator Mike Rulf, US Internetworking Markus Zirn, Oracle D’Arcy Mathias, Deloitte Consulting Nishit Rao, Oracle Mike Knecht, Innowave Technology

Agenda SOA and BPM – Markus Zirn SOA Cost Calculator – Nishit Rao SOA at USI – Mike Rulf Business Value and POV on SOA – D’Arcy Mathias Early Adoption Experiences – Mike Knecht

Business Value and POV on SOA D’Arcy Mathias, Deloitte

Agenda SOA Overview Why SOA? SOA Business Perspective Deloitte’s Point of View Strengths and Weaknesses of Point-to-Point Integration Strengths and Weaknesses of SOA Integration Key Factors for SOA Business Case 7

SOA Overview – What is SOA? A “Service Oriented Architecture” provides an integration framework which can support sharing of business functions as re-useable processes. A service is the composition of software interactions that provide meaningful value to the business. Service Oriented Architecture (SOA) is a Concept, a Style, and a Strategy, encouraging business model driven development. A design for linking a collection of services on demand to facilitate a business process An application function packaged as a reusable component that can be used in a business process Provides information to the requester, or facilitates a change to business data from one state to another Implementation agnostic (it does not matter how), as long as the service responds and provides a quality and desired outcome 8

Why SOA ? SOA value proposition: Reuse of existing IT assets Development and maintenance cost reduction – develop once and reuse multiple times Time to market – New applications can be assembled easily and quickly from existing services Integrated customer view – reuse of same services in different channels Technology independent Reduced complexity

SOA Business Perspective SOA’s value is about reusable business processes SOA allows organizations to capture and reuse a valuable technological asset: the business process There are benefits and pitfalls with SOA SOA can bring benefits such as business agility SOA can be very costly if not properly planned SOA can create hard-to-manage dependencies between systems and business groups SOA governance is a critical success factor Services need to be provisioned and managed like any enterprise asset A governance approach such as Deloitte Consulting’s Service Management Framework is needed to manage the dependencies that SOA creates SOA is not the universal answer SOA has an important place in the enterprise, but should not be adopted everywhere blindly SOA for the enterprise should be business-driven 10

Managing SOA – Balancing Benefits and Challenges Service Oriented Architecture claims to provide companies with an IT environment that offers unprecedented levels of control, flexibility and agility for the business and IT. Despite these benefits, SOA brings a new level of complexity, which needs to be managed throughout all stages of the lifecycle. Managing and supporting such an environment requires a new set of design criteria and operational agreements for both the business and IT. If done well, this tilts the scale and gets the business in control and on top of SOA to reap the maximum benefits it has to offer. SOA Challenges Business needs to properly articulate service functionality requirements New roles and responsibilities between business and IT required Service based modelling requires new standards for security and authorization Repositories and models need to be shared between business and IT Disciplined SOA management maximizes business benefits SOA Benefits Increase business agility by composing business defined services into process implementations Leverage existing (back-office) applications assets and investments Decrease business dependence on IT through better definition of roles and responsibilities Free up maintenance costs to support innovation

Deloitte’s Business Point of View about SOA SOA’s value is about reusable business processes SOA allows organizations to capture and reuse a valuable technological asset: the business process There are benefits and pitfalls with SOA SOA can bring benefits such as business agility SOA can be very costly if not properly planned SOA can create hard-to-manage dependencies between systems and business groups SOA governance is a critical success factor Services need to be provisioned and managed like any enterprise asset A governance approach such as Deloitte’s Service Management Framework is needed to manage the dependencies that SOA creates SOA is not the universal answer SOA has an important place in the enterprise, but should not be adopted everywhere blindly SOA for the enterprise should be business-driven

Deloitte’s Technical Point of View about SOA SOA is just an architectural approach SOA is just an architectural approach which builds upon what we learned from objects and components It is a valuable part of your technology toolkit It is not a silver bullet, and should not be used everywhere SOA is not web services; web services is not SOA SOA can be achieved with web services, but other transport technologies (e.g. queues, sockets…) can be used as well Using web services off-the-shelf is not always SOA Are you exposing a process, or just an API? Enterprise services should be first class business processes A service exposed to the enterprise should be a first class business process such as “GetCustomerInfo” or “PlaceOrder” Consider if your service can be expressed as a VerbNoun SOA is not middleware Using middleware tools does not automatically give you SOA SOA can certainly be realized with middleware

Business Integration with Oracle Fusion Middleware For SOA Integration, Oracle BPEL Process Manager (PM) is the core component in Oracle Fusion Middleware Oracle BPEL PM offers a comprehensive and easy-to-use infrastructure for creating, deploying and managing cross-application business processes The diagram on the right illustrates a generic approach in which Oracle BPEL Process Manager is used to orchestrate existing EAI interfaces as well as to integrate new applications

Oracle SOA Reference Architecture

Strengths and Weaknesses of Point-to-Point Integration Involves application to application integrations using custom interface code for data integration, process integration, data transformation, and connectivity Often leads to a complex integration environment i.e. “spaghetti architecture” and typically the only escape route is to build the interfaces from scratch Strengths Weaknesses Ability to minimize short term integration costs Initial ease of development due to accustomed environment and in-house knowledge Technical freedom to develop very tailored solutions to meet the business needs Increases maintenance and support costs Reduced portability - changes in one system can have a significant impact on all systems that have dependencies to changed system Limited monitoring and reporting capabilities Higher maintenance of information quality and integrity Lack of consistency with design and code; often leads to “band-aid” approach to code changes

Strengths and Weaknesses of SOA Integration Involves the development of enterprise services modeled on existing business processes Enables loose-coupling of applications through enterprise-wide accessible services, communication, and support to provide improved portability, robustness, extensibility, and flexibility Strengths Weaknesses Lower long-term development costs with ability to leverage reusable business processes Improved monitoring and reporting services through centralized consoles, lowering maintenance costs Greater code reuse capabilities for custom functionality Stronger enforcement of enterprise-wide design and development standards Loosely coupled architecture to increase flexibility and ease code changes Higher up-front costs Requires architecture, infrastructure, and cultural changes across enterprise Lack of governance model can lead to complex integration platform

Key Factors for SOA Business Case Key SOA Considerations Cost Implementation Cost Support Costs Additional cost associated with the develop of reusable enterprise business services Future savings of reusable business services Business Case Outlines the cost/benefits analysis of using SOA vs. traditional EBI application integration Organizational Maturity Does a governance model exist to manage shared business services throughout their lifecycle? Do funding models exist to support the cost/benefit drivers? Has organization adopted a standards-based SOA model? Reusability Do reusable services exist in the to-be business process? Is there an anticipated project that would reuse the potential shared business service? Alignment of IT with Business Process How do the existing/to-be IT applications align with the business process? Monolithic isolated applications vs. shared business services

Sample Clients Client Engagement Description Vendor Consumer Products – Stationary Supplier Integrated Oracle E-Business Suite with Manugistics resource planning system and supply chain management system using BPEL Oracle Fusion, Manugistics Public Sector – Liquor Bureau Ongoing support and development with Oracle Fusion Middleware using a SOA framework for various projects including integration to Oracle Applications for SCM project Oracle Fusion Oil and Gas Implementation of Oracle BPEL and B2B middleware to integrate a legacy JD Edwards environment to external payroll, treasury, and banking systems Oracle Fusion, JD Edwards Home Construction Products Oracle Fusion Middleware was selected as the SOA integration layer, interfacing various systems including Peoplesoft, Hyperion, Banks, etc. Oracle Fusion, PeopleSoft, Hyperion Steel Production Integrated Oracle EBusiness Suite including Finance and HR modules with external systems using Oracle Fusion Middleware S290993 – Leveraging Oracle Fusion Middleware Components for the management of SOA Interfaces – 11/15/07, 11:30am – 12:30pm. MW 2014, L2

Markus Zirn, Oracle Corporation SOA and BPM Markus Zirn, Oracle Corporation

SOA & Business Process Mgmt.

Process Management Typical Scenario CRM Financials Procurement HRMS

Oracle’s Recommendation Adopt BPM with Oracle’s SOA Suite Design Monitor Optimize Execute & Optimize Business Processes Cross-Application Business Process Automation Application Services CRM Financials Procurement HRMS

Business Case Discovery - BPM Process Mgmt. What to look for… What we’ve seen… Customer satisfaction (process errors)? Operational visibility across apps? Process-centric custom apps? Acquisitions? Outsourcers/ Biz Partners? High Turnover (employees, contractors, new products, customers….)? Paper Processes? Top Processes: Order to Cash Multi-Channel Order Orchestration On-/Off-Boarding Concept to Cash (Telco) Paper Workflow Automation: Imaging/Workflow in AR/AP

Data Integration Typical Scenario UI Customizations Financials CRM P2P Integr. (FTP, PLSQl, DBLink,…) Hard to upgrade! Hard to upgrade!

Oracle’s Recommendation Adopt SOA-based Integration with Oracle’s SOA Suite Error Handling WS WS WS UI WS Financials CRM Customizations Easy to upgrade! Easy to upgrade!

Business Case Discovery - SOA What to look for… What we’ve seen… Manual data re-entry? Fax, Phone interactions Many complementary, heterogeneous apps? Batch integrations? Point to Point (FTP, DBLink,…) – hard to maintain & upgrade, error-prone? Customer & Product data issues? Easy-to-change, re-usable integrations (SOA-based) Real-time integrations (instead of batch transfers) B2B integrations Master Data Management

User Interaction

User Interaction Typical Scenario Biz Intelligence Call Center Agent Content Mgmt. CRM SCM Financials

Oracle’s Recommendation Create “Mash Ups” using Oracle WebCenter & ADF 500 units Share via Web 2.0 Communities Call Center Agent 20 units Biz Intelligence Integrate Apps, Content, Desktop Map “Mash Up” Content Mgmt. CRM SCM Financials

Extending Applications SSO with Apps 1, Apps 2 Human WF Portal UI BAM Standards- Based SOA Mid-Tier WS Process WS WS WS WS UI UI Apps 1 Logic Extension Logic Extension WS Apps 2 WS Logic Logic Easy to upgrade! Easy to upgrade!

Business Case Discovery - UI User Interaction What to look for… What we’ve seen… Manual customer interactions? Casual ERP users? Existing Customizations hard to maintain? Usability: “Swivel chair”? Alt-Tab? Repetitive tasks? Spreadsheets? Customer self-service Online (e.g. Warranty Mgmt.) User interfaces optimized for “casual users” Integration “on the glass” (“Hide Complexity”) Uploading from Spreadsheets Interaction with processes via BAM AJAX user interface

http://www.oracle.com/technology/tech/FMW4Apps/Siebel NEW

Savings Calculator for SOA Nishit Rao, Oracle Corporation

Savings Calculator for SOA A tool to compute savings in SOA based Integration projects Nishit Rao Group Product Manager FMW Markus Zirn Sr Director, FMW Product Management

SOA Savings Calculator computes IT cost savings for integration projects by comparing costs between a SOA/BPEL implementation and a Proprietary Integration Broker implementation over life of solution using TCO.

What is value of SOA? Business Value from a SOA Project = Bottom line benefits + Top Line benefits. Bottom Line = Cost Saving Top Line = Higher Revenues Higher Revenue is (a) difficult to measure and (b) pin the benefits to SOA. Higher sales, Risk reduction, Time to market etc. IT Cost Savings is tangible, can be (a) measured *and* (b) pinned to SOA. Software services, Hardware and software licenses

Applied SOA: Measuring Business Value, Michael Barnes Gartner

Integration Cost Study : Zapthink http://www.zapthink.com/report.html?id=ZapFlash-10232002

Compare TCO over Traditional Broker based Integration : Data Driven SOA based Integration : Business Driven Custom Flows BPEL Business User Services Services Tightly coupled, zero re-use, function calls Reusable decoupled Services WSDL WSDL Custom Custom ERP CRM ERP CRM Many companies have trouble maintaining proprietary integration brokers and point-to-point integrations and grossly underestimate the time, money, and consulting that would be required. Our findings show that, standards-based integration implemented as SOA orchestrations using BPEL is not only faster to implement, but also faster to change and maintain by IT resources without any prior J2EE development experience. Standards Based: BPEL & Schemas. Align to business – high ROI, low risk. Reusable services. Custom data, adapters and flows. Expensive coding, vendor lock in, limited re-use and limited tooling Low ROI data integration.

Underlying Model TCO = A + P.V.  ( Si + Hi + Gi + Ci – Ri ) n i = 1 A = SOA Ramp up costs P.V. = net present value Si = Software License and Support costs in year i Hi = Hardware costs in year i Gi = Governance Costs in year i Ci = Services (consultants) costs in year i Ri = Savings from Reuse in year i where SOA CapEx acquisition cost includes one time capital expenditure on Software licenses, and Governance Costs includes recurring Architecture, Training and Governance expenditure. SOA Savings = TCOTRADITIONAL - TCOSOA

Inside an Integration Process Multi Step Process Bind Bind Bind Interfaces exposed by endpoints Endpoint ERP Custom Component CRM Endpoint Built by in-house Developers

Services Effort Defaults SOA-BPEL in days Proprietary Broker in days Justification Create new Multi-step process 5 6 Input and output to each step is standardized WSDL and XML. Endpoint interface WSDL is self descriptive reducing communication errors. Less training for new hires knowing XML. Interoperability with diverse systems such as .NET, Mainframe, Databases, Files is made easier by common look and feel and invoking mechanism of WSDL interfaces.. Abstraction of binding type provides flexibility. XML Schema enforces type and reduces errors Creating WS interface above component take additional effort SOA enhances reuse with std interfaces, lookup facilities and governance policies. The reuse rate is with good governance. Create interface (bind) to endpoint 2 3 Change multi-step process 1 Change interface (binding) when endpoint changes New Component Development 45 30 Max Reuse Rate 30% 10% ============= E2E Consultants=========== It should not take 15 days to slap a WS on top of a component. ================ Joe Huang============= Soa adds value when you have more new moving parts. Highlight scenarios where soa adds value. Minimize - #1: sites with wM will say they are equally productive. #3 – when you introduce sometting external to toolset. External partner link. .NET will take less time(look for a benchmark).

SOA Approach saved 28% over traditional methods Step 3 : Your Savings SOA Approach saved 28% over traditional methods

Change & Maintenance lead in savings Maintenance accounts for 39% of savings.

Feedback: nishit.rao@oracle.com Q & Q U E S T I O N S A A N S W E R S

SOA and BPM at USi Mike Rulf, AT&T Inc

SOA and BPM at USi SOA SIG

Developing an ROI Model at USi REQUIREMENTS SUPPORTING SYSTEMS All projects require an 18-month payback on investment Development labor costs Recurring maintenance labor Training costs Implementation/Support End-User Software and recurring maintenance Hardware & recurring maintenance CRM link to financial system Project/case-based financial reporting Enables capture of delivery labor Project-based financial reporting Helps w/ capitalization Assists in estimation of new projects ISM Allocation of DC costs for true hardware support estimates Burdened labor by category

Project Overview BACKGROUND/CHALLENGE SOLUTION and more…. RESULTS USInternetworking specializes in managed enterprise and eBusiness solutions and on-demand services for Fortune 1000 companies Streamline operational processes to reduce labor costs and improve Ensure repeatability and process compliance to support multiple audit standards HR Onboarding Identity Management Provisioning ITIL automation and more…. RESULTS Achieved initial consolidation of user information, access mgmt, and provisioning across hosted 11i, PSFT, SEBL and other applications Reduced “rework” costs and deployment timeframe through automation leading to higher client satisfaction Leveraging existing code assets increased adoption & reduced deployment timeline

Project Benefits Identity Management & Provisioning (S290853) Leveraged Oracle Identity Management and SOA to provide centralized user management, single sign-on, and provisioning across product and service offerings Streamlined setup and implementation of security policies using RBAC capability of Oracle Apps Simplified compliance reporting across multiple audit standards HR Onboarding (S290854) Leveraged the web service capabilities of PeopleSoft Integration Broker Used BPEL to orchestrate and manage multi-product process flow Utilized human workflow components to track manual tasks for audit compliance ITIL Automation Reuse of existing code assets via “wrappers” ITIL processes often leveraged as part of larger business flows in ERP products

Key Learnings Position as a technology solution DON’T: DO: Position as a technology solution Cost savings through “rapid deployment” or “quicker development” Focus on business process Automation of manual or fragmented processes Reduce cost of compliance through ‘documentation’ of processes and controls Show value to a key corporate measurement such as margin or revenue Provide impact at the “C”-level

Sessions for Additional Detail S290853 Oracle Fusion-Ready: Delivering Enterprise Security and User Provisioning App Tools & Tech Track/Security Focus Facilitator: Nadia Bendjedou Thursday 1:00PM-2:00PM Moscone South 104 S290854 Oracle Fusion-Ready: SOA-Based Integration App Tools & Tech Track/ Integration & Web Services Focus Tuesday 3:15PM-4:15PM Marriott Golden Gate C2 S291693 The Promise of BPM: Customer Experiences in Adopting Oracle BPM SOA, BPM & App Server Track/ Integration & Web Services Focus Facilitator: Harish Gaur Thursday 8:30AM-9:30AM Moscone South 300

Early Adoption Experiences with Oracle SOA Mike Knecht, Innowave Technology LLC

Early Adopter Experiences Early adopter profile Large and small companies Forward-thinking IT management vs. “Just find a way to integrate” Reasons for adoption are typical Cost, time, word of mouth, scalability, flexibility, manageability, reliability Common shortcomings of customer implementations Exception handling is lacking Poor early effort at establishing solid data definitions (XSD) Not taking advantage of the true SOA capabilities Just replacing traditional solution with a BPEL process Not utilizing ESB correctly (BPEL used for everything) No reporting / dashboard management other than Console BAM SOA Management Pack Business Rules are lost in code

Early Adopter Experiences Education is paramount to get the highest ROI from SOA solutions Put the benefits of SOA into context for customer-specific situations Walk through “what if” scenarios and compare traditional solution to SOA solution to address Confusion is common IT Best Practices seem to change Old: Single-system consolidation New: Multi-system integration Why not build integrations with typical in-house skill sets (FTP, Shell)? Explain key concepts clearly Adapters: what are they? Importance of data definition Process management Keep application-specific logic in the application

Early Adopter Experiences Results of early adoption Great! Easy to see benefits Immediate positive impact on maintenance requirements Subsequent phases scheduled to spread SOA within a company Common adopter trends Standards become more important IT staff embraces SOA approach and technology Their life is easier! Basic workshops or training courses are more than enough to get going Mature, solid, reliable products As acceptance increases, so will features and functionality Skill sets becoming more common

Oracle Technology Practice Manager Q & A Thank you ! Innowave Technology http://www.innowavetech.com Mike Knecht Oracle Technology Practice Manager mknecht@innowavetech.com Basheer Khan Founder, CEO, President bkhan@innowavetech.com

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