1. The Business Value of SOA
Andrej Crepinsek
IBM SWG CEMAAS
IT Architect Manager
SMART SOA Introduction

2. What is Driving Business Today
What is Driving Business Today? The Changing Business Landscape in the Globally Integrated Economy
Main point:
What is driving business today? New and changing customers, global integration, business model innovation and new technology models are driving changes in the global economy today. Businesses are forced to change in fundamental ways - structurally, operationally and culturally in response to the imperatives of globalization and new technology.
Supporting points for drivers:
1. New and changing customers
China and India will add 1 Billion customers in the rapidly developing economies in 5-10 years (new economy)
Retiring baby-boomers will spend their accumulated wealth and pass this wealth to the ‘inherited’ generation Y (old economy)
2. Global Integration
Networking threshold will be reached, broken and redefined. (sharing information)
Immediate transfer of goods and knowledge through standards and technology (winners must adopt critical standards set)
3. Business Model Innovation
To address opportunities and challenges resulting from new and changing customers and global integration, companies and organizations must define a target operation model
based on a combination of three dimensions
Industry Model Innovation (IMI) Change the way your whole industry works
Revenue Model Innovation (RMI) Change the way you charge your customers
Enterprise Model Innovation (EMI) Redefine what you do yourself and where you collaborate
4. New Technology Models
architect systems more effectively and develop them more productively
Additional detail if needed:
IMI: Change the way your whole industry works
Redefine existing industries, (e.g. Ikea, Phoenix University Online and Linux)
Move into new industries, (e.g. Apple Ipod)
Create entirely new industries, (e.g. Wikipedia)
RMI: Change the way you charge your customers
Re-configuration of product/service/value mix, (e.g. GE Aviation)
New pricing/taxing structures and models, (e.g. Gilette, pre-paid cell phone cards, Singapore road pricing)
EMI: Redefine what you do yourself and where you collaborate
Do as much as possible within your organization, (e.g. ZARA or US Department of Homeland Security)
Specialize by focusing on differentiating activities, (e.g. Cisco)
Intensively collaborate with external partners, (e.g. Bharti)
Early findings from the IBM Global CEO Study to be published Spring 2008

3. Globally Integrated Economy Needs the Power of….
… service orientation
A way of integrating your business as linked services and the outcomes that they bring
… a service
A repeatable business task – e.g., check customer credit; open new account
Main Point: Define SOA (Same definition we've always used) as a way of enabling the globally integrated economy
Services are repeatable business tasks. Business processes are supported by way of a series of services linked together like building blocks. SOA is an architectural style that makes this possible
Let’s start by looking at some base-line definitions so we’re all talking about in the same terms.
First, what is Service Orientation? <read definition> Service Orientation is a way of integrating your business as linked services and, more importantly, the outcomes that they bring. We’re not talking about technology; we’re talking about a thought process and a business philosophy.
Second what is a service? <read definition> It’s important to stress that we’re talking about a part of a business process here. Don’t think about software or IT. Think about what your company does on a day to day basis and break those business processes up into repeatable business tasks or components. Think about building blocks snapping together to build a structure. Services are the building blocks and they are snapped together to support a business process.
What is SOA? It is quite simply the IT architectural style that supports the Service Orientation thought process makes it a reality.
**Main point** SOA makes it easy to assemble and reassemble services to support business process just like snapping together building blocks into a structure.
… service oriented architecture (SOA)
An IT architectural style that supports service orientation
But haphazard SOA deployments can reduce value

4. There is a Smarter Way! Introducing Smart SOA
Extend
End-to-End
Adapt
Dynamically
Foundational
Transform
Main Point: Define Smart SOA: A set of guiding principles to extend the value of SOA deployments. The SOA Continuum helps define this guidance along a continuum from basic to advanced with the principles of simplicity and robustness applied throughout
We take different approaches to SOA depending on our business objectives. There is no one size fits all for SOA. So rather than taking a haphazard approach to SOA, we can learn from the experiences of those around us and take a SMART approach to SOA. Smart SOA is a set of guiding principles to extend business value of deployment
The central tenants of Smart SOA are:
There is a continuum of guidance from basic to advanced for pursuing SOA projects allowing an organization to match its efforts to its objectives.
All guidance mandates commitment to simplicity and robustness regardless of how basic or advanced the deployments are.
Projects and deployments must build on each other such that doing a basic project is valuable by itself but also lays the groundwork for more advanced deployments without having to replace the original investments.
A set of guiding principles to extend business value of deployment

5. Based on 5700 customers using our SOA offerings
Distinct Value with Every Path Regardless of Where You Choose to Engage
Value to business
Greater agility in specific, departmental business areas
Optimization and innovation across end-to-end business processes
Business model innovation to support the Globally Integrated Enterprise
Predictive business automatically responding to market forces
Collaboration within a line of business
Coordination across lines of business
Enterprise-wide organizational cooperation
Enact significant shifts without direct IT involvement
Scope
Foundational
Extend
End-to-End
Transform
Adapt
Dynamically
Value to IT
Focused, proven, high-ROI projects
End-to-end business process management to innovate and optimize
IT for strategic advantage and business model innovation
Technology becomes invisible
Main Point: Regardless of where you choose to engage to meet your business needs, there is IT AND business value to be had with Smart SOA
This Smart SOA continuum is not a maturity model. It's not something that has a starting point and a destination. There is distinct value at every path regardless of where you choose to engage.
On the basic side, Foundational SOA can deliver value through focused, proven, high ROI project. Usually narrowly defined projects for very specific needs. Scope is usually around a single application or within a single business unit. At this point, organizations will typically express less than ten percent of their functions as services. Typically less than five percent of these services are reused. Foundational SOA can deliver greater agility in specific departmental business areas and foster greater collaboration within a line of business
Moving over to Extending End-to-End, organizations are typically more focused on applying the principles of SOA to the end-to-end businesses that span a wide variety of applications, lines of business and even span borders and organizations. These are typically more central and higher-profile processes and users benefit from the broader ROI of innovating and optimizing these processes Scope is usually around a single process and can span business units. At this point, organizations will typically express less than 40 percent of their functions as services. Typically less than 20 percent of these services are reused.
Moving over to Transform, organizations are typically looking to use SOA to help innovate their business models using IT for strategic advantage across their enter enterprise rather than an individual business process to support the globally integrated enterprise. They are looking at multiple processes that span multiple business units. At this point, organizations will typically express less than 80 percent of their functions as services. Typically less than 50 percent of these services are reused.
At the far right at the Adapt Dynamically approach, we're looking at really a somewhat aspirational state. It's about creating a predictive business that addresses market forces on a semi-automated basis. At this point, we can look forward to technology becoming invisible and business leaders being able to enact major shifts without direct IT involvement. While we've seen some organizations achieving bits and pieces of this, it's really something to strive for in general. This would encompass the extended enterprise, express over eighty percent of functions as services and reuse more than half of the services.
% functions expressed as services
<10%
<40%
<80%
>80%
% of services reused
<5%
<20%
<50%
>50%
Based on 5700 customers using our SOA offerings

6. Leverage SOA Experience and Best Practices The SOA Entry Points
When selecting SOA projects, focus on solving specific business problems as part of an evolving enterprise architecture
IBM has a variety of assets and best practices around the SOA entry points, based on our extensive experience with customers
People Entry Point:
Interaction and Collaboration
Reuse Entry Point: Creating and reusing proven, high-value assets
Information Entry Point: Information as a Service
Process Entry Point: Process Automation
Connectivity Entry Point:
Securely and flexibly interconnecting

7. Process Integrity Takes SOA to the Next Level Enabling Integrity of Transactions, Interactions and Information
Foundational
Extend
End to end
Transform
Adapt
Dynamically
Main Point: Now let's transition a little bit to some of the considerations that arise when you look at expanding end-to-end and transform. As we've said, it's the same software products that are used as what we just discussed… but more advanced deployments sometimes bring up some elements that you may not have considered when doing an entry point project
Process Integrity becomes a greater focus as you advance - capabilities are there when you need them
SOA Entry Points
Process Integrity

8. Information Must be Reliable, Complete and Manageable
Advanced: Process Integrity Enabling Integrity of Transactions, Interactions and Information
Process Integrity is the ability to conduct reliable business activity in a secure, scalable SOA environment with seamless synchronization between: Services n Human Tasks n Information n Domains n Users
Users Must Be Provided with Up-to-date, Secure Access to Information and Content
Transactions Must Execute Consistently with Ability to Recover as Required
Main Point: But "easy to get started" is not enough. Your investments in SOA need to grow as your needs evolve and become more advanced. Process Integrity is the ability to conduct reliable business activity in a secure, scalable SOA environment with seamless synchronization between services, human tasks, information, domains and users.
Process Integrity is focused on synchronizing end-to-end processes so they provide the right amount of integrity. Process Integrity is comprised of three components: Interaction Integrity, Transaction Integrity, and Information Integrity.
Interaction Integrity is about providing users with the right access to information and content. This means, for example, being able to customize the access based on the role of the user. It is also about simplifying the user’s interaction with the system – providing an easy to use interface that clearly displays the information that the specific user needs.
Transaction Integrity is about executing both short running and long running transactions with confidence. Short running transactions often require full-scale transactional properties, for example, the ability to roll back a transaction if some aspect of it fails. Long running transactions must also be able to maintain their integrity, and have compensations specified for aspects of the transaction that don’t execute successfully.
Information Integrity focuses on consistency of information. Information sources must be synchronized so that there are not multiple views of the same customers, partners and products.
Information Must be Reliable, Complete and Manageable

9. SOA and Enterprise Architecture
Strategy
Information Technology Strategy
Business Opportunity
Business Strategy
Technology
Availability
Enterprise Architecture
Business Architecture
Processes
Information
People IT
Architecture
Applications
Information
Technology
Enterprise wide focus
Planning
Transition Plan
EA Governance
EA Support Business and IT
Drives Business and IT Strategy
Enables Architectural Planning Linking Business and IT Objectives
Results in IT Solution Design and Delivery
Enabling SOA within the EA mission enhances SOA success
Alignment of business and IT
Separation of concerns
Reusability of applications and information
Connectivity
Service lifecycle management
Governance
Infrastructure
Business Operating Environment and IT Infrastructure
Project focus
Design and Delivery
IT Solutions

10. Enterprise Architecture Links Business and IT Reconciling Business Requirements and IT Capabilities
Business Perspective
IT Perspective
Business View
IT View
Business Analyst
IT Architect
Developer
Enterprise Architecture
Process/Operation Model
Architecture/ Execution Model
Business Process Model
Process Choreography
NOTES – Line up the concepts between Business and IT as part of notes …
Business Component
UML Class Model
Business Information
UML Data, XML, SQL Model
Business Services
Service Model, WS-BPEL

11. Business Strategy Drives IT Decisions IT’s Goal is to Flexibly Support Business Requirements
Business Intent
Meeting Strategic Goals?
Business Strategy & Design
Align
Strategic KPIs
Business Services
Business Understanding
Business Operations
Meeting Business Commitments?
Optimize
Operation Models
Business Performance Management
Operation Models
Solution Flexibility
Solution Composition
Response to Business Situations
Correct
Executable Solution
Executable Solution
Quality of Service
Detecting Business Situations
IT Implementation
Monitor

12. The SOA Lifecycle Discover Construct & Test Integrate people Compose
Integrate processes
Manage and integrate information
Gather requirements
Model & Simulate
Design
Manage applications & services
Manage identity & compliance
Monitor business metrics
Financial transparency
Business/IT alignment
Process control

13. SOA Reference Architecture Supporting the SOA Lifecycle
Interaction Services
Information Services
Partner Services
Business App Services
Access Services
Development Services
Management Services
Infrastructure Services
Enables collaboration between people, processes & information
Manages diverse data and content in a unified manner
Connect with trading partners
Build on a robust, scaleable, and secure services environment
Facilitate interactions with existing information and application assets
Integrated environment for design and creation of solution assets
Manage and secure services, applications & resources
Optimizes throughput, availability and utilization
Info Assets
Apps &
Process Services
Business Services
Supports enterprise business process and goals through businesses functional service
Enterprise Service Bus
Orchestrate and automate business processes

14. SOA Solution Layering Leveraging the SOA Reference Architecture
Services
atomic and composite
Operational Systems
Service Components
Consumers
Business Process
Composition; choreography;
business state machines
Service Provider
Service Consumer
Integration (Enterprise Service Bus)
Monitoring Infrastructure Services)
QoS Layer (Security, Management &
Data Architecture (meta-data) &
Business Intelligence
Governance
Channel
B2B
Packaged
Application
Custom OO
Atomic Service
Composite Service
Registry

15. Key Standards for SOA SOA and Web Service Standards Industry Standards
Business Services: Service Offerings and Components
(ACORD, HL7, eTOM, ARTS…)
Industry Semantics
(SWIFT, FIXML, OTAXML, UCCNet…)
Service Interaction
(WSRP, JSR 168, AJAX)
Infrastructure
Standards
Programming Model
(SCA, SDO)
Security
(WS-Security)
(WS-Atomic Transaction, WS-Business Activity)
Transactions
(IT Information Library)
Management
WS-I Basic Profile, WS-I Basic Security Profile, WS-I Reliable Secure Profile
Profiles
Service Orchestration
(WS-BPEL)
Service Discovery
(UDDI, Reusable Asset Specification)
Service Invocation & Messaging
(SOAP, WS-Addressing, REST)
Service Description
(WSDL)
Data Exchange
(XML, JSON)
Network Protocol
(HTTP, SMTP)

16. Business Component Analysis
The enterprise is mapped out as a set of categorized business components
Heat map highlights components for analysis based on criteria such as gaps and efficiency
Enables approaches to understanding how the business can be improved
Business
Administration
New Business Development
Relationship Management
Servicing & Sales
Product Fulfillment
Financial Control and Accounting
Directing
Business Planning
Sector Planning
Account Planning
Sales Planning
Fulfillment Planning
Portfolio Planning
Controlling
Business Unit Tracking
Sector Management
Relationship Management
Sales Management
Fulfillment Monitoring
Compliance
Product Management
Credit Assessment
Reconciliation
Staff Appraisals
FROM:
Columns are Business Competencies, defined as large business areas with characteristic skills and capabilities (e.g., product development, supply chain).
An Accountability Level characterizes the scope and intent of activity and decision-making at three levels:
Directing is about strategy, overall direction and policy.
Controlling is about monitoring, managing exceptions and tactical decision making
Executing is about doing the work
NOTE – Explain this … part of JK Enterprises – discuss the hot areas – how do you do a heat map… Look at PPI notes for more information (on Sales Day)
Executing
Account
Administration
Product Directory
Credit Administration
Sales
Product Fulfillment
Customer Accounts
Product Administration
Marketing Campaigns
Customer
Service
Document Management
Purchasing
General
Ledger
Collections
Branch/Store Operations

17. Service Oriented Modeling and Architecture (SOMA) Links Business Intent with IT Implementation
<< Input from Business Analysis >>
<<Output to SOA Implementation >>
SOMA
Service Identification
Service Specification
Service Realization
SOMA gets inputs from business analysis activities, and produces outputs necessary for SOA implementation
The analysis and modeling performed during SOMA is technology and product agnostic, but establishes a context for making technology and product specific decisions in later phases of the lifecycle
SOMA creates continuity between the business intent and IT implementation by extending business characteristics such as goals and key performance indicators (or KPIs) into the IT analysis and architectural decisions.
The outputs of business analysis and modeling efforts such as CBM are leveraged by SOMA to deliver an SOA solution.
The analysis and modeling performed during SOMA is technology and product agnostic. Yet, it establishes a context for making technology specific decisions in later phases of the life cycle.

18. Service Exposure Decisions Within Service Identification
Business Alignment:
Is the service business relevant?
Is funding available for service development and management?
Is the service sharable?
Composability
Is the service consistent with NFRs at the composite level?
Is service stateless?
Is the service self-contained? (Are there dependencies?)
Is the service technology neutral?
Externalized Service Description
Is there an externalized service description e.g. WSDL?
Can the service be discovered and bound via the service description?
Does the description contain meta-data about itself?
Redundancy Elimination
Can the service be applied to all processes where its function is required?
Candidate Services
Business Alignment
Composability
Externalized Service Description
Redundancy Elimination
Service Litmus Test
Services
(exposed)

19. Continuous SOA Governance Process Measurement & Improvement
SOA Governance & Management Method (SGMM) IBM’s Comprehensive Approach to SOA Governance
Plan
Define
Enable
Measure
Determine the Governance Focus
Define the SOA Governance Model
Implement the SOA Governance Model
Refine the SOA Governance Model
Tailor method for
goals/environment
Define and refine governance processes
Implement the transition plan
Measure effectiveness governance processes
Understand current
Governance structures
Initiate SOA Org Changes
Define organizational change
Measure effectiveness of organization change
Define scope of governance
Launch the SOA Center of Excellence
Conduct change readiness survey
Define IT changes in SOA development
Implement infrastructure for SOA
Review and refine operational environment
Continuous SOA Governance Process Measurement & Improvement
Important Points On This Slide:
This slide shows a summary of the IBM SOA governance methodology – The SOA Governance and Management Method (SGMM).
SGMM corresponds to the SOA governance lifecycle having 4 main phases.
It is very flexible and can be tailored to a customer’s particular needs
The stressed plan phase delivers an assessment that allows IBM to extend the existing IT governance environment, which will minimize disruption, and still provide an effective SOA governance model by leveraging existing governance mechanisms, which will maximize the probability of success.
Speaker Notes:
This slide shows the IBM SOA Governance and Management Method (SGMM), which is the IBM approach to SOA Governance. As you can see, SGMM is organized in the same 4 main phases of the SOA Governance Lifecycle of plan, define, enable, and measure.
Plan – In the plan phase, the main goal is to assess the need for governance and determine what the governance efforts need to focus on for that iteration of governance work. Within this phase, the existing governance environment should be thoroughly examined, this existing environment should be baselined, the scope of the governance work should be defined, and then the organization’s ability to accept and adopt change. One of the first tasks conducted within the plan phase of the SGMM is the method tailoring workshop, which brings us to an important point on the SGMM – it is extremely flexible and allows you to focus on the elements that are most important to you within these initial stages. Another important element in the plan stage that highlights the benefit of SGMM is that the approach allows you to assess the existing governance mechanisms, so that you can define an SOA governance model that extends your existing environment and does not tries to replace what the customer already has established around IT governance. The goal of SGMM is not to rip and replace but to extend. The reason is that SGMM wants to minimize the amount of disruption and required organizational change management that is necessary to establish an SOA governance model. By extending any existing IT governance mechanisms that are effective in their purpose, the SGMM provides the ability to minimize the amount of organizational disruption.
Define – In the define phase, the main goal is to simply define the governance model. The approach focuses on the definition of an ownership model for services across their lifecycle and how they will be funded, the establishment of SOA governance mechanisms such as an Architectural review board, executive steering committee or CoE if the customer decides to establish one, the various processes to be governed such as the testing of services, identification of services, development of services, etc.), the metrics associated with these processes, the roles and responsibilities within the various mechanisms (establishment of decision rights), define the various quality gates for the processes that we would like to govern (compliance processes), identify the tooling that we will use to enable our governance efforts (WSRR, monitoring, etc.), and then finally create the necessary plans to put the governance model into action – education, mentoring, communication, and transition.
Enable – using the transtion, plan that we defined in the previous phase, the SGMM implements the various elements defined in the governance model.
Measure – using the metrics that were defined in the define phase, data is aggregated to assess the effectiveness of the governance model
Two important points about SGMM
It extends existing governance mechanisms
It is flexible and can be catered to your specific goals
Define the scope of governance: business, development governance or service management or all of the above
Define new governance processes for services and define SOA governance mechanisms such as the SOA Center of Excellence
Begin implementation of the SOA Center of Excellence, Skills Enablement, Organizational Change, Infrastructure Change, etc.
Monitor composite application performance and adjust; Monitor effectiveness of governance changes

20. Evolution of SOA within IBM
2007
BU Integration &
New Technologies
2006
Enterprise Governance
2005
Opportunity Projects
and
Enterprise Architecture
There are currently over 25 SOA projects and 9 case studies on IBM.
Exploratory
Isolation Layer Framework strategy
Technology Focus
PoC of SW Integration
Simple services, most not mission critical
Limited production
Services, but not really SOA
Start of some business services
Bottom-up practitioner drive
Production deployed
Web Services Guidance Council
Initial IT metrics
Mixed results
2005
SOA integration into Target Architecture
Enterprise and Business Unit Components
SOA Guidance Council
Begin business metrics
Increased top-down Enterprise focus
2006
Increased systematic Enterprise focus
SOMA reviews
Methodical WW Reuse Process
Reuse engineers
Skill build out
SOA Governance
Collaborative SOA dialog among lines of businesses
2007 Focus
BU Integration
Assist / guide BU’s management of their 2% of Development Spend for SOA
Drive SOA into major initiatives
Collaborate with BU SOA lead architects
Use SOA to manage the Four D’s:
Decreasing cost and schedules
Dependencies
Decomposition
Decoupling
Identify Enterprise Service Components
Promote development of more reusable assets
Develop SOA pilots with BUs and document showcases
Continue focus on BU SOA Business Value
Imbed SOA into basic architectural thinking
New Technologies
New SWG Product Capabilities
Alternate Technologies
SOA enablement of 3rd party products
Continue Workflow as the business integration point
Collaboration with EBI on Information as a Service
ESBs: DataPower backbone and Message Broker
Sense and Respond – out of the box WebSphere Monitor
SOMA, with improved follow-up linkages to service implementation definitions
Updated SOA education
Registries and Repositories
Early Projects
Exploratory

21. Why IBM? Trusted, experienced guidance based on 5700 customers*
Basic to advanced to grow as your needs evolve
Simplicity & robustness for consumability and confidence
Pioneering metrics for SOA and agility
Investment protection through open
standards
End-to-end processes based
on industry best practices
Main Point: Walk through IBM 6 differentiators
<<read through the differentiators. These differentiators highlight elements of the story that has just been laid out and will be discussed in other presentations going forward.>>
Only vendor
across people, process, and information
*# of Customers using our SOA offerings