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This Blog is part of the Retail Innovation Strategy and SAP Technologies.

 

SOA Position in the Innovation Radar

SOA is positioned in the application sector of the radar as it is a technology that shapes the state of a retailers business applications and their ability to support today’s and tomorrow’s business processes. Applications that leverage SOA can deal easier with business change and effectively enable agile business processes through composite applications and Business Process Management (BPM). Thus, the benefit of SOA is not SOA in itself, but what it actually enables: process agility that is process composition, process configuration flexibility and process control. Gartner ranks its business benefit as transformational and estimates its time to mainstream adoption between 2 – 5 years in its Hype Cycle for Application Infrastructure Middleware, Platforms and Architecture, 2007.

 

Position of SOA in the Innovation Radar  

SAP’s Approach to SOA

SAP recognized very early the value of service-oriented architectures (SOA) for business applications and established 2005 the Enterprise SOA (ESOA) as basis of its platform. That early commitment manifested SAP’s strong offering of SOA features in its available business applications (see also Evaluating IBM, Microsoft, Oracle and SAP Business Application SOA Strategies). SAP’s roadmap to SOA for the Business Suite is not a radical re-write of its existing applications but an evolutionary “outside in” re-design. Based on a stable ERP 6.0 core, new Enterprise Services are rolled out to customers through non-intrusive enhancement packages. This allows a smooth migration path for customers to ESOA. On the other hand, Oracle has announced plans to develop a new breed of business applications called Fusion Applications, and in parallel SOA enable their existing application portfolio (E-Business Suite, Siebel, PeopleSoft, Retek etc.) based in the Oracle Application Integration Architecture with the focus of easing integration between those applications (Oracle has acquired the majority of their existing business applications).

According to Gartner the drawback of SAP’s approach (= no rewrite from scratch of the code base) is the limited ability of the re-engineered applications to take full advantage of SOA. In conversations with SAP I learned that SAP has a strong opinion about how much SOA is right for customers: “SOA should allow creating the flexibility for the 20% of processes that create differentiation. The remaining 80% processes should be standardized and configured the old fashioned way.”  Thus, SAP seems not to be keen on 100% SOA-fication but on allowing customers to differentiate by the important 20% through SOA. I think that meets common sense and aligns with Goeffrey Moore’s Core / Context model for process innovation.

The risk with developing a new product from scratch in parallel is an unclear migration path for customers of the existing applications and a long co-existence of multiple product lines all fighting for the same resources (customers, budget, developers). The market will tell what the best strategy was, but SAP’s approach with SAP Business Suite seems to do well: in a recent Gartner analysis Evaluating IBM, Microsoft, Oracle and SAP Ecosystems’ Support for Sourcing Innovative Processes Gartner said that: “SAP is significantly ahead of other vendors in establishing an innovative ecosystem.” Main reasons stated are the Business Service repository, keeping semantic, data and process consistency across industries and strategies to co-innovate with other ISVs leveraging communities like BPX.

SOA Middleware and Application Infrastructure

The underlying technology platform for SAP’s applications is NetWeaver. The Process Integrator (PI) is a core element of NetWeaver and provides Service Bus-based Integration and Service Management features. The NetWeaver Composition Environment is used in the design, execution and management of composite applications. The latest additions to the composition environment is Introducing SAP NetWeaver Business Process Management (BPM) as well as SAP NetWeaver Business Rules Management Roadmap is now public, which is based on the technology that SAP obtained through the YASU Technologies acquisition. SAP Enterprise Services Repository (ES Repository) provides a repository, registry and modelling capabilities for services and is integrated into the Composition Environment. There are further components, like SAP NetWeaver Identity Management, in the NetWeaver stack. It is likely that the list is growing as SAP completes its infrastructure,perhaps also through more focused acquisitions.

NetWeaver is bundled with SAP’s applications and not marketed as a separate offering. This implies that NetWeaver’s release cycle and priorities are closely linked with the requirements of SAP applications deployed at customers. The result is longer release cycles and thus later introduction of some standards or features as with vendors that sell SOA infrastructure for a living. This translates into weaker analyst’s rankings. Nevertheless, SAP has established itself a seat amongst the “big four” enterprise packagers of application platform technology.

SAP is ranked behind Oracle, IBM and Microsoft in the Magic Quadrant for Application Infrastructure for New Service-Oriented Business Application Projects, 2Q07 (= building new SOA applications from scratch). SAP strengths in terms of infrastructure are centred on the composition of services where it is leading amongst the “big four” in the Magic Quadrant for Application Infrastructure for Composite-Application Projects. SAP is considered a visionary, behind IBM in the leader quadrant but ahead of Microsoft in Gartner’s Magic Quadrant for Integrated SOA Governance Technology Sets, 2007: Technically, SAP ESR can be deployed in non-SAP environments, but Gartner has not seen many examples of this.” In the same report Gartner writes: “Oracle didn’t qualify for this Magic Quadrant because it only markets and sells governance technologies to users with Oracle Application Server or Oracle SOA Suite.” Thus, in this specific instance SAP supports better heterogeneous environments. However, clients with a SAP centric strategy are clearly the sweet spot for the NetWeaver middleware. 

SAP Enterprise SOA

The hard thing with SOA is to “have” appropriate services. This requires careful business design such that a service is really re-usable to enable the benefits associated with SOA. Luckily, this work is done by SAP and its innovation network for SAP applications. Once we have services, the next challenge is to “facilitate the re-use” of services within new composite applications. Now, the rubber hits the road and SOA’s potential benefit unfolds. Lets start the discussion with looking briefly at the SAP process platform from a retail industry perspective. This provides the context for the Enterprise SOA discussion.

The Process Platform…

The picture below depicts the conceptual architecture for the retail industry.

Conceptual Architecture

The top of the picture represent the processes that are enabled by the underpinning application architecture. These processes are explained in great detail in the SAP solution map for retail. The processes are flowing across the SAP application modules contained in the Front-Office, the connecting Logistcs and Back-Office. Non-SAP applications complement the SAP applications as well. The Front-Office connects to customer channels (B2C) and utilizes SAP ERP-Retail and CRM applications with their respective modules as the core building blocks. The Back-Office connects to suppliers (B2B) and utilizes SAP ERP-Retail. The Logistics connects the supply chain between the Back-Office and the Front Office.

The main advantage of SAP is that the application modules are semantically integrated “by design”; SAP has the advantage that the main application components have beed developed in house. The semantic integration of components is an essential key differentiator in the competition of SAP with other software providers and it is enabled by Global Data Types (GDTs). GDTs are reusable semantic building blocks for service operations and business objects, are based on the rules described in the international standard UN/CEFACT CCTS, have been approved SAP-wide by the Governance Process for Business Content, have been defined in the ES Repository and are described by XML schema, and have been documented in accordance with the documentation templates. Currently there are about 2200 GDTs defined (see Data Type Catalog).

Provide Services…

GDTs are the foundation of the semantic definition of Enterprise Services. From the main components depicted in the conceptual architecture diagram above, the ERP application alone currently provides more than 700 Enterprise Services (ES). These services are leveraged in a number of pre-packaged Integration Scenarios for typical EAI problems (currently there are 60+) that are shipped with NetWeaver. Last but not least, Enterprise Service Bundles (ES Bundles) form collection of ES within industry specific or industry agnostic business contexts. ES Bundles are also packaged integration artefacts that are shipped with enhancement packages to the business applications like ERP. These bundles also contain composite applications with GUIs to jumpstart the implementation of innovative business processes that leverage services from SAP as well as external applications.

For example, a retailer company may decide to build a flexible interface into an external Warehouse Systems that may or may not be SAP. The Warhouse Managament Integration ES Bundle supports exactly this scenario: “This ES bundle enables the exchange of logistics-relevant information like inbound and outbound deliveries and data related to the movement of goods within a tracking system and also offers replication of product, customer, and supplier master data from SAP ERP to the external warehouse management system.” In total SAP has currently shipped about 90 ES Bundles and many more arein the pipeline (see the current and planned list in the Enterprise Services WIKI).

Re-Use of Services…

Before a service can be re-used, it must be found in the first place. First of all there is the public available Enterprise SOA Workplace, short ES Workplace. ES Workplace is the main entry point into existing Enterprise Services Documentation of SAP. It provides targeted content for the business viewpoint (e.g. semantics, business process relationships) and the technology viewpoint (e.g. interfaces, operations, data types, integration scenarios) of Enterprise Services. It offers various entry points optimized for the main roles like business process expert, architect, developer into the repository. Users may test drive the services by demo systems that are provided by SAP via the ES Workplace. 

In a deployed SAP installation, the previously mentioned SAP Enterprise Services Repository (ES Repository) provides a repository, registry and modelling capabilities for services and is integrated into the Composition Environment and provides similar content but more advanced features to search for SAP Enterprise Services as well as services registered from other service providers. Gartner’s Magic Quadrant for Integrated SOA Governance Technology Sets, 2007 mentioned earlier concludes that: “SAP has full SOA life cycle management capability, supports SAP’s integrated service environment and policy management tools, and is the epicenter of SAP’s SOA development.” 

Conclusion

In a nutshell, SAP’s SOA Middleware and Application Infrastructure is promising. SAP has a very advanced business process platform providing Enterprise Services upon which clients can leverage the benefits of SOA to create the 20% of innovative processes, also integrating non-SAP applications, to increase their market share. Furthermore, SAP’s process platform and its approach to co-innovation is positive, inceasing the opportunity for customers to source further innovative processes from ISVs that deliver on SAP’s platform. The integrated portfolio minimizes complexities and help to run the remaining 80% of standard processes most efficiently. Last but not least, SAP offers a evolutionary migration path to Enterprise SOA for customers.

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2 Comments

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  1. Paul Taylor
    Stephaan

    Good attempt to try to bring the whole picture together, certainly is a lot to take in. I tried to follow the link to one of the Garter Magic quadrants as featured however they wanted USD1,995 up front! I was also wondering how far this resonates within EDS and in particular across to your CPG side ? Is there something similar to share ?

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