Service Engineering from a Business Perspective

MSI 2008

OldenburgSeptember 24, 2008

Marc LankhorstGroup Leader Service ArchitecturesTelematica Instituut

Agenda

• Introduction

• Trends in the service sector

• Trends in IT

• Service thinking

• Research challenges

• Model-based service engineering

• Conclusions

Telematica Instituut

• Independent, non-profit research institute

• Founded & funded by companies, the Dutch

government, and universities

• To create impact with IT innovation

• By translating fundamental results into practical

applications

• In multi-party projects together with industry and

academia

Service Economy

• Western Europe’s economy is increasingly based on services

– In the Netherlands, 70% of the GNP is service-related

– Trade, logistics, finance, healthcare, legal, consulting, IT, etc. etc.

• EU directive on services (“Bolkestein Directive”) to create a single, EU-wide market for services

– Offers many opportunities

Trends in the Service Sector

• Focus on core competencies

– do what you do best

• Flexibility through sourcing

– global integration

• Agility

– change drives the business

• Differentiation, innovation & disruption

– being first in a market is increasingly important

Trends in Service Sector (cont.)

• “Head+tail” companies (e.g. Nike)– Branding & design = head– Sales = tail– Production, logistics, etc. are all sourced from

others

• Mobile Virtual Network Operators (e.g. Aldi, Tchibo)

• Banks outsource back-offices

• White-label mortgage servicers

• X-ray pictures evaluated in India

• New business models (e.g. iPod+iTunes)

⇒ Highly complex networks of cooperating companies

IT Status Quo

Traditional approach to IT cannot keep up with these business trends

• Slow changes through in-house software development and management

• High maintenance sosts

• Duplication of functionality and data (silos)

• Vendor lock-in

• Closed systems, no online access

• Nearly unmanageable size and complexity

Traditional Silos

Process 1

Application 1

Organization 1

Process n

Application n

Organization n

Process 2

Application 2

Organization 2

Trends in IT

• Enterprise Architecture (EA)

• Business Process Management (BPM)

• Software as a Service (SaaS) / Software + Services (S+S)

• Service-Oriented Architecture (SOA)

• Service technology (Web services, WS-BPEL, ..)

• Model Driven Architecture / Development (MDA, MDD)

Service Oriented Architecture (SOA)

A software architecture style that conforms to the principles of service orientation

• Service as the unit of design

• Aimed at reuse

• Concerns design, not technology

• Demands new design methods

• Impact on IT as a whole and beyond– Not limited to individual projects or applications– Organization structure and culture may even be

impacted

Software as a Service (SaaS)

A model of software delivery in which a service provider takes care of running & maintaining the software and supporting the customer

• Use and management of software over the Web

• Provider owns, deploys and maintains software and often also underlying IT infrastructure (but infrastructure-as-a-service also on the rise…)

• Multi-tenant architecture

• Pay-per-use/user or subscription revenue model

Examples SaaS

Expected Advantages of SaaS

• Predictable and lower costs

• Higher quality

• Shorter time to market

• Lower IT-related risks

• Less need for specialized and scarce IT expertise

• Focus on core competencies

• Greater agility, easier to switch vendors

• Service provider has a direct stake in service consumer’s success (through pay-per-use)

Service and Service

Business trends• Focus on core competencies• Sourcing flexibility• Agility• Differentiation• Efficiency

IT trends• SOA• EA, BPM• MDA• SaaS, S+S• Web services

BusinessService

SoftwareService

Service

“Unit of functionality that offersa relevant added value”

Business trends• Focus on core competencies• Sourcing flexibility• Agility• Differentiation• Efficiency

IT trends• SOA• EA, BPM• MDA• SaaS, S+S• Web services

SoftwareService

BusinessService

Service

Servicecloud

Servicecloud

Service Thinking

Service

demand

supply

SOAprinciples of service orientation

SaaSin-/out-

sourcing

Layers of Cloud Cover

Business servicesBusiness services

Software servicesSoftware services

Business modelsBusiness models

service service

service service

model modelIm

plem

enta

tion

Governance

Conclusions So Far

• Developments in services sector and ITdemand a new approach:

“Service thinking”

• Integrated approach for developing:– business services (customer offerings)– supporting software (and other IT) services

• But how do we get there?– What are the challenges?– What instruments do we need?

Many Challenges

• How do you describe and find services?• How do you reuse services?• Which properties of services are important?• How do you combine and link services in a meaningful

way?• How do you structure a service network?• How do you manage risk in a service ecosystem?• ...

Core Research Issues

• Designing the many aspects of services

– Coherent descriptions needed

• Realizing these services

– Agility is key

• Creating business value with these services

– Abstract from technology issues

• Model-based approach– Higher quality, fewer errors

– Faster implementation: code generation, using models at run-time

– Off-line analysis and testing

Method for Service Development

• Comprises a.o. design of– business models, ecosystems of service providers– collaboration processes, agreements, contracts– software services– information models, semantics– IT infrastructure– and much more

• Simple step-by-step design process• Analysis techniques for costs/benefits, risks, impact of

changes, etc.• Guidelines, best practices, patterns, examples

Many Aspects and Domains

• Many domains and aspects need to be designed• These are not stand-alone, but related in various ways

contract

risk

value

performance implementation execution

constraints

regulations

cost design

revenue requirements

contract

risk

value

performance implementation execution

constraints

regulations

cost design

revenue requirements

contract

risk

value

performance implementation execution

constraints

regulations

cost design

revenue requirements

• Model transformations may contribute to a solution

“Traditional” Model-Driven Development

service specification

service design

service user

transformation specification

transformation specification

Service architect

Service Designer

operational service

Development Dashboard

• Navigating through development process• Coordinating service developers and tools• Managing relations between aspect models• Realizing services in software code, workflow, etc.

Conclusions (1)

• Services offer many opportunities

– to IT

– but especially to the business

• Two trends are converging:

– SOA and SaaS

• Radically new ways of doing business are combined with a distributed, heterogeneous IT environment

• Services have many aspects that need to be addressed in an integrated manner

Conclusions (2)

• Needed:

– A model-based “toolbox” for service design

– A method and coordinated set of software tools

– that integrate the many business and IT aspects

• The Telematica Instituut is working on elements of such a toolbox, with partners from business, academia and government

More information?

Marc LankhorstTelematica InstituutPostbus 5897500 AN EnschedeMarc Lankhorst@telin.nl053-4850485http://www.telin.nlhttp://saas.telin.nl