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Enterprise SOA is the new buzz word in SAP world. Some have adopted it whole heartedly and some of them have adopted a wait & watch approach. I feel like scribbling a few of the thoughts on enterprise SOA and how it can help the organizations achieve their goals.

There are a lot of marketing hype and some reality about enterprise SOA. In this series of blogs I like to explore some of the key ideas behind the enterprise SOA which others have not yet covered or not sufficiently covered. One of the key topics is core –context model. Various training materials cover it to an extent, but from a business analyst’s point of view or from a lay man point of view it needs to be explained.

The idea of core & context come from the Book “living on the fault line” by Geoffrey Moore. Moore used concept of core & context to explain the fundamental drivers of survival for any organization in a dynamic business environment.  Following diagram shows the core & context model with its four quadrants.  

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Key words associated with each of the quadrant are very essential for an organization to survive. These are

  • Invention
  • Innovation
  • Standardization
  • Commoditization

These ideas are linked to a business model or line of business which follow invention, scaling or optimizing as part of its growing up.  Let’s take the example of sales order creation process for a distributor with a lot of sales representatives on the field and they collect orders from various retailers for the distributed products. The process steps are shown  

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This is a standard process available in any of the COTS ERP packages. This can be deployed as a standard process across all your business units. After a while it is found that sales executives are wasting a lot of time in order entry. To reduce the work, order entry is outsourced to a third party and sales executives can call & give the details for order entry. Now this process falls into the quadrant of commoditization. Activity of sales order creation can be outsourced using a process composed using services from the backend transaction system. If this process is improved using add-on features like multiple location availability check (an advanced planning /order fulfillment system in the backend) or a third party credit rating agency for credit check, then it is qualified for the innovation quadrant. Here the process can be composed of various services from multiple systems and can be deployed on a web 2.0 environment or a mobile device. Imagine that the company is starting a b2c business and the sales order creation is driven from the traffic on the web. Process itself transform into an innovative solution invented to manage the new business model. Order creation, credit check & availability check will be managed through loosely coupled services from the back end and third party systems. 

 

 

Core & context model provides a powerful tool in analyzing and categorizing the process in terms of the value creation as well as enabling differentiation for the organization. Over a period of time many of the core processes become context processes and do not provide any differentiation. One of the key reasons is the competition catching by copying or modifying or improving these processes. Some of these become industry best practices also. A typical question will be on the source of these differentiating processes. These can be derived from an innovative business model or from adopting the practices from another industry. 

 

Let us see more on industry best practices and next practices in one of the coming blogs

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