aligning business and it with the service-oriented...
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© 2006 Hewlett-Packard Development Company, L.P.The information contained herein is subject to change without notice
Aligning business and IT with the Service-Oriented Architecture (SOA)
Terri Bennett SchoenrockExecutive Director, Service-Oriented Architecture, HP Services Hewlett-Packard
2 October 19, 2006
“It bothers me that people talk about ‘the business’ as if it’s some monolithic thing made up of every department that’s not IT.”
CIO Magazine, Editor in Chief Abbie Lundberg
3 October 19, 2006
Today• SOA implementations− Every market segment− Supporting key
business initiatives− Provide more
mainstream role for IT• Results− Better value from IT− Increased agility−Ability to react to
change− IT aligned with other
business units
4 October 19, 2006
Typical non-alignment of business and IT
Manufacturing
Product development
Finance
Packaging
Marketing
Manufacturing
Product development
Finance
Packaging
Marketing
ITITStrategic planningStrategic planning ??
5 October 19, 2006
The SOA approach
Manufacturing
Product development
Finance
Packaging
Marketing
Manufacturing
Product development
Finance
Packaging
Marketing
ITIT Strategic planningStrategic planning
6 October 19, 2006
201% ROI201% ROI
7 October 19, 2006
Run IT as a businessIn companies that have experienced highly successful with SOA transformations—• Achieving significant ROI • Improving customer retention • Improving customer satisfaction• Increasing revenues• Cutting costs
You can’t tell an IT manager from a line of business manager
8 October 19, 2006
Allaying fears about SOA• SOA is not a radically new architectural
approach.• SOA is much more than technology.• SOA represents maturation of:−Thinking−Technology− IT Architectures
• SOA is designed for flexibility.• SOA transformation allows the alignment of
business and IT.
9 October 19, 2006
SOA is driven by business initiatives
10 October 19, 2006
SOA adoption
SOA education/awareness
Web services and business process services executed at the project level
Some services and data are shared for departmental applications or solutions
A shared enterprise-level SOA strategy
A virtual, real-time Adaptive Enterprise
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2
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5
4
HP approach
12 October 19, 2006
HP SOA Competency
Centers
HP SOAPartners
HP SOA Services
Methods &Processes
Qualified Personnel
HP Global Capabilities
HP SOA Manager
HP Services
HP Products
Depth
Choice
HP SOA Strategy
Breadth
ReachHP
Professions
13 October 19, 2006
SOA transformation stagesVisioning
Assessment
Governance and
enterprise architecture
Realization
Full visibility
Capitalizing on change
ITBusiness
BusinessIT aligned
14 October 19, 2006
HP SOA Domain Model
The HP SOA domain model outlines the key areas of capability, activity and assets needed to successfully adopt and operate an SOA.
Business
People
Program Mgmt.
Governance
Architecture
Enabling technologies
Operations & mgmt.
Supply & demand
15 October 19, 2006
Domain Model—think beyond technology
Business
People
Program Mgmt.
Governance
Architecture
Enabling Technologies
Operations & Mgmt.
Supply & Demand
• Business goals and strategy• Business metrics• Stakeholder participation• Business/IT Synchronization
• Skills and expertise• Experience• Culture• Communication• Education
• IT services for business• Vendors and suppliers for IT• Sourcing strategies• Service level contracts,
obligations and agreements
• Day-to-day service operations• Management of SOA IT• Integrated management of
business & IT
• Program management• Project management• Transformation program• POC, pilot and roll-out• Assessment & measurement
• Enterprise Architecture• Solution/Service Architecture• Principles, Standards and
Models• Domain Architecture (Security,
Management, Network, etc…)
• Service Infrastructure (ESB, Registry, Service hosts, Development Environment, etc…)
• Legacy migration/integration• Technical infrastructure
(Servers, Storage, Network, etc…)
• IT Governance• Organization structure• Compliance management• Portfolio management
16 October 19, 2006
SOA Maturity ModelSOA Maturity Levels
SOA
Dom
ains
Enabling technologies
People
Supply and demand
Operations & mgmt.
Architecture
Governance
Program mgmt.
Business
Level 5Adaptive
Level 4Managed
Level 3Standardized
Level 2Basic
Level 1Ad-hoc
Integrated, dynamic SOA infrastructure
Large-scale managed SOA infrastructure
Standardised enterprise-wide SOA infrastructure
SOA infrastructure is limited to exposing functionality as services
There is no service infrastructure in place
SOI is embraced by all staff and actively promoted
Ongoing SOA education is attended by all staff
SOA education is required for all IT staff
Understanding of SOA is limited to IT management & architects
Staff have little or no knowledge of SOA
Dynamic service sourcing from multiple sources
Services sourced from multiple providers
Value based sourcing decisions
All services are provided internally
Business needs are all meant using technology components
Management of business services integrated into business operations
Proactive management of business services linked to component services
Management of business services
Management of applications and infrastructure in terms of SLAs
No management of services, infrastructure elements only
Architecture and business are executed as integrated
Architecture is business driven and is auditably linked
All IT initiatives comply with the architecture
Architecture program exists, and architecture is defined
Limited or ineffective architecture
Advanced understanding of IT governance
The value of governance is fully understood
Governance guidelines defined and integrated into process
Some governance processes, individual responsibility
Some acknowledgement of governance issues
SLA is enterprise-wide and extends to partners
SOA is integrated at corporate level
SOA is federated, but not integrated
SOA efforts are business unit basedSOA is project focused
SOA is fundamental to business operations
Business proactively supports SOA
Business generally complies with SOA
Business is aware of SOA
Minimal business interest in SOA
17 October 19, 2006
SOADomains
Maturity levels
Order Handling
Sales
1.0
2.0
3.0
4.0
5.0
1.0 2.0 3.0 4.0 5.0Agility
Impo
rtanc
e
Service Planning andDevelopment
Service Configuration
Resource Planning andDevelopment
Resource Provisioning
Problem Handling
Customer QoSManagement
Service ProblemManagement
Service Quality Management
Resource Inventory Management
Resource Maintenanceand Restoration
Invoicing and collections
Rating andDiscounting Resource Data Management
Danger ZoneOrder Handling
Sales
1.0
2.0
3.0
4.0
5.0
1.0 2.0 3.0 4.0 5.0Agility
Impo
rtanc
e
Service Planning andDevelopment
Service Configuration
Resource Planning andDevelopment
Resource Provisioning
Problem Handling
Customer QoSManagement
Service ProblemManagement
Service Quality Management
Resource Inventory Management
Resource Maintenanceand Restoration
Invoicing and collections
Rating andDiscounting Resource Data Management
Danger Zone
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3
4
5Canada
USA - WestUSA - Central
USA - East
Mexico
Sweden
Netherlands
GermanyFrance
ItalySpainHungary
UK & Ireland
Australia
Malaysia
Taiwan
Singapore
JapanThailand
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4
5Canada
USA - WestUSA - Central
USA - East
Mexico
Sweden
Netherlands
GermanyFrance
ItalySpainHungary
UK & Ireland
Australia
Malaysia
Taiwan
Singapore
JapanThailand
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2
3
4
5
Sale
s
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andl
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Svc
Plan
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Industry-specificAgility
Assessment
Agility Analysis
SOA Transformation
Roadmap
Business
People
Program Mgmt.
Governance
Architecture
Enabling technologies
Operations & mgmt.
Supply & demand
HP SOA Domain Model
Currentstate
Desiredstate
HP experience
19 October 19, 2006
Hewlett-Packard Company
• Lowered total cost of ownership (reduced staff and license costs)
• Recovered $1M in license fees
• Responded to change 2 to 5x faster
• Multiplied business unit’s revenues 3x in 6 months
• New solution – SOA and web services
• Service consumer SDKs• Web services consumed
by all resellers (no 1-1 modifications required)
• Live verification of order coherence, order confirmation, price and delivery guarantees synchronized with supply chain (SAP to web services)
• HP Partner Direct: customer-facing, event-driven integrated enterprise
• Web-based and wireless customer interaction
• Real-time applied data mining
• Develop direct sell supply chain
• Reduce time needed to connect retail partners
Results/BenefitsSolutionChallenge
Global provider of technology solutions to consumers, businesses and institutions
20 October 19, 2006
Top six HP post-merger challenges• Budget cuts were ‘de rigueur’.
− Employees had to re-think the way they work.• HP/Compaq merger was a key impetus of change.
− Rationalization, consolidation and integration were needed immediately!• More than one hundred storefronts existed.
− Consolidation was mandatory.• Consolidation required simultaneous revision of front and
back-end systems.− Tight coupling would cause repetitive reworking.
• An eclectic collection of technologies existed.− Rationalization and integration were required.
• Continue to meet business objectives− Systems had to remain operational during the change period.
21 October 19, 2006
eBusiness SOA approach: SOA rationale• HP Global Operations + IT (GO+IT)
− GO+IT was mandated to provide shared business capabilities across HP organizations worldwide
− Needed to have regional responsibility and customization
• Strong SOA appeal since it supported:− Simultaneous rationalization and consolidation of customer-facing
solutions and back-end systems − An ideal approach to the many-to-many integration problem− Avoidance of “re-integration” problem when something changes− Need to insulate front- and back-end functionality from technology
• Consequently support heterogeneous technologies− Fit with company’s business operating model
• HP/Compaq merger revised the business operating model
22 October 19, 2006
Quantitative results realized using SOA• Released more than 30 services
—accessible via hp.com, marketing sites, e-commerce customer storefronts, Partner Portals, and Direct B2B connections
• Supported higher volume online interactions− 1.2M+ logins per day− 5M+ visitors per week− $10B revenue handled per year
• Received SOA support from business, operations and IT sponsors− SOA investments over past three
years: 65% service production; 35% service consumption (portal and storefront user interfaces)
• Lowered cost to serve− $16M annual asset retirement
savings• Reduced time to deliver
− Cut implementation time and cost by as much as 50% for consumers of shared services
23 October 19, 2006
The bottom line—freeing IT investment for innovation
ROI forBusiness
& IT
IT budget as %
of revenueApplication maintenance
Application innovation
Infrastructure maintenance
Infrastructure innovation
5%
30%
42%
2002
23%
72%
28%
2005
15%
30%
45%
10%
45%
55%
Source: HP-IT
24 October 19, 2006
