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Build a Services-Based Infrastructure That Enables Business Change While Containing Costs

by Thomas Mattern | SAPinsider

October 1, 2004

by Thomas Mattern, SAP AG SAPinsider - 2004 (Volume 5), October (Issue 4)
 

Creating new value from existing IT assets, extending the functionality of current system resources, and innovating to cope with accelerating business change — these are all business issues that IT teams must increasingly grapple with on a technology level. For CIOs, it's imperative to find robust, cost-effective ways to leverage their current set of heterogeneous enterprise applications to support new requirements and enable innovation.

Enterprise application integration (EAI) was one way to address this problem, but it has proven to be costly to implement and even harder to change over time. Now, Web services offer another promising technology, with a standardized, vendor-independent way to cope with heterogeneity and create interoperability and compatibility among various packaged and customized Web applications. However, Web services functionality is typically too fine-grained to support full-blown, enterprise-wide business processes.

SAP brings a business process perspective to Web services technology with Enterprise Services Architecture (ESA), an open architecture for adaptive business solutions, enabled by SAP NetWeaver. ESA adds to the promise of Web services by providing a blueprint for moving your IT architectures, step-by-step and cost-effectively, to dramatically higher levels of adaptability.

Can Web Services Technology Handle Full-Scale Business Processes?

Web services are typically used to expose a single piece of functionality via a dedicated application, so they are perfectly suited to solve the problem of technical connectivity based on open XML standards — a Web service can delete an order from, say, your CRM system. However, their greater potential is apparent in the context of enterprise-wide business scenarios that combine the functionality of multiple applications.

For a typical example of how Web services would work in a broader enterprise context, consider that canceling an order could touch several other tasks:

  • Sending a confirmation to customers

  • Removing the order from the production plan

  • Flagging corresponding material

  • Notifying the invoicing department

  • Changing the order status to "inactive"

Your IT team might say that each of these activities can be encapsulated in a single Web service from a particular system or called through open Web services standards. From a business perspective, though, these steps together can be represented as yet another Web service. SAP calls this kind of process-level Web service an enterprise service.

SAP has devised Enterprise Services Architecture as its blueprint for building, changing, managing, and expanding these business processes, and the SAP NetWeaver as the platform for deploying the resulting applications — composite applications — that are based on these services. This architecture is designed for SAP and customers alike, and SAP offers tools and resources to start planning a services-based foundation for your infrastructure right away.

Start Now with Some Key Ingredients

Whether you've started adding Web services to your current applications or not, ESA is designed for business-oriented Web services that help you:

  • Leverage existing SAP, third-party, and legacy applications

  • Extend your existing applications

  • Innovate to cope with accelerating rates of business change

Not only can a services-based approach improve the effectiveness and efficiency of your IT infrastructures, but ESA lays out a supporting architecture that can be achieved with an incremental rollout strategy. The result: a service-oriented architecture that lets the enterprise adapt to continuous change, while still containing costs. Other key elements of the mix include:

SAP NetWeaver
Customers can begin using SAP NetWeaver now to service-enable
applications and leverage those into flexible end-to-end business scenarios — either from SAP or developed in-house — using SAP NetWeaver Developer Studio, SAP Composite Application Framework, and Business Process Modeling capabilities.1 Leveraging SAP NetWeaver today introduces a Web services-based foundation that will also serve well into the future, enhancing user productivity and collaboration.

Service-Enabled SAP Solutions
SAP is currently on its way to fully enterprise service-enabling its own solution offerings (see "SAP's Own ESA Roadmap for mySAP Business Suite"). SAP solutions will increasingly be delivered as composite applications leveraging enterprise services exposed by underlying components. SAP is using various combinations of enterprise services to develop applications and business processes that can be adapted and reused in conformance with the ESA blueprint. The result will be a repository of enterprise services that customers can use as key building blocks in their own Enterprise Services Architecture.

Custom Web Services
SAP customers are encouraged to begin incorporating Web-based services using ESA principles (which include open standards, reusability, and model-driven development) and reusing the enterprise services defined and delivered by SAP. Service-enabling existing applications is a fundamental premise of ESA. Enterprise services enable IT teams to efficiently develop composite applications — new applications that reuse functionality and information from existing systems — to support customer- or industry-specific business processes and best practices.

SAP xApps and Custom Composite Applications
Enterprise services will also allow companies to flexibly combine transactional functions with analytics and collaboration, for new levels of visibility and control of the business. This extended functionality will be available in the form of SAP xApps2 from SAP and its partners, or customers can develop them as custom composite applications in-house using SAP NetWeaver.

SAP's Own ESA Roadmap for mySAP Business Suite

All SAP business applications, such as mySAP Business Suite, will be evolving to adhere to the Enterprise Services Architecture. Part of this process involves abstracting the solutions' rich functionality and best practices and transforming them into enterprise services. Here's a glimpse at SAP's own roadmap for ESA enablement, to help you begin preparing for services across your IT infrastructure:

2004

  • In current mySAP solution releases, SAP offers the first set of service-enabled SAP NetWeaver scenarios to promote user productivity and business collaboration. (For an example of how a business process could be service-enabled, see the product request example, which is part of the New Product Development and Introduction (NPDI) scenario, discussed later in the article.)

2005

  • Additional service-enabled scenarios will be made available, focusing on business process flexibility and anticipating the needs of new composite applications.

  • SAP will publish an inventory of its enterprise services — available for planning purposes for customers and partners in the Enterprise Services Repository — to be delivered in 2005 with SAP NetWeaver. This list of SAP functionality can be leveraged in customers' and partners' composite applications and for longer-term roadmap planning.

2006

  • SAP will offer its first end-to-end industry scenarios built on this new architecture.

2007

  • SAP applications, including mySAP Business Suite, will now fully reflect the Enterprise Services Architecture paradigm. (For example, all enterprise services will be described in a central repository, and created and managed by SAP NetWeaver.)

With an overall, services-based approach, business processes are systematically delivered as composite applications, you can more quickly adapt your processes, for a fraction of the cost, and without creating future consolidation headaches.

Begin by taking a look at the processes in your enterprise now, how they work today, and how they can run better with a service-enabled architecture in the background. Consider where SAP NetWeaver can help you add Web services to your current applications or enhance collaboration. Examine the ESA blueprint and SAP's own roadmap for enterprise services deliverables, so that you can plan an infrastructure that makes the best use of enterprise services.

ESA in a Business Context

Let's take a closer look at a business scenario and how it would be enhanced by enterprise services in an ESA infrastructure. This purchase order scenario begins during product development.

In development and introduction of new products, companies risk huge sums developing ideas into prototypes and, finally, into products and brands. This activity touches many departments, including product management, supply management, manufacturing, and invoicing and finance. However, in the consumer products industry, the success rate for successful product launches is typically less than 15% — often because companies lack an overall process, leaving the new product to pass through various organizational units with no single individual or group being responsible for the outcome. Best practices for new product development and introduction involve creating a set of increasingly demanding checks that each idea must pass through to move to the next stage. What's more, although this requires collaboration between internal departments and suppliers, for most companies this is still an inefficient paper-driven scenario.

New Product Development and Introduction (NPDI) is a scenario that goes well beyond the simple automation of a paper process (see Figure 1). Decoupled from the end-user's view, forms based on underlying systems provide unprecedented flexibility. Process steps can be reordered and reused as business needs dictate. Process participants can be changed. Steps can be added without delving into the code. Within SAP NetWeaver,3 an end user can even add an additional step — an extra review by an engineering expert — on the fly, or she can select a different supplier altogether if delivery problems or quality issues arise with the selected supplier.

Figure 1
ESA Example: New Product Request Within the NPDI Scenario

How Enterprise and Standard Web Services Would Support New Product Development

In the context of a New Product Development and Introduction (NPDI) scenario, there might be the need to order a new component in order to build the new product. In that case "New Product Request" describes a process from the order of that component onward. Running on SAP NetWeaver in the enterprise, you can see the different enterprise services (Figure 2) that are used as part of this process.

The first step, to request data (material numbers, product information and specs), could be supported by an enterprise service that requests the order.

After the request is created, a supply expert would check the request form and locate a supplier to provide the new material. For the steps in the Sourcing phase, an interaction between the system and the experts might be possible to, for example, reduce the selection of possible suppliers.

For business process flexibility, a role-based portal gives suppliers access to the manufacturer's system by a standardized service, and from there they can add all relevant data.

Now the supply expert can evaluate the suppliers and select one based on information from the Supplier Selection enterprise service, which can also involve cost analysis from a business warehouse. The purchase department creates a purchase order and sends it to the supplier.

Once the supplier accepts the order, confirmation is sent by an Order Response enterprise service to the company. The goods are sent and an invoice is created. If no invoice exceptions occur (duplicate invoice, missing invoice data, missing invoice approval), the payment can be authorized.

Note that while not all elements of this scenario are currently based on enterprise services, there are areas that are already service-enabled to enhance user productivity and collaboration.

Business Phase Enterprise Service (Examples) Individual Services Within the Enterprise Service
Product Design Requisition Create Pre-fills relevant information (information about the requestor and product, for example) into the forms
Validates the provided material number
Sourcing Supplier Discovery Identifies known suppliers (via information retrieval from internal systems)
Locates new suppliers from Web directories/catalogs
Searches on marketplaces (via information retrieval from external systems)
Supplier Qualification Accesses ranking of known suppliers by service from internal list or SAP Business Intelligence,based on previous performance matrix, product quality, sales history, etc.
Accesses ranking/evaluation of new suppliers by third-party services (such as www.openratings.com)
Performs checks on whether trade formalities must be fulfilled for certain suppliers (e.g., cross-check in Global Trade System)
Supplier Selection Proposes a ranking/list of suppliers based on supplier qualification
Selects one or more suppliers automatically or manually
Generates and sends an RFQ if the supplier is not yet rated
Purchase Purchase Order Create Requests goods from a supplier and creates the order in all relevant systems
Attaches all related documents to order (design drawings,contract information,SLA,etc.)
Sends an email to the supply expert and all participating suppliers
Order Response Confirms or rejects the order from the manufacturer
Notifies all relevant participants
Notifies all systems for order fulfilment
Invoice Invoice Processing Builds invoice content
Checks for invoice exceptions
Posts invoice exception
Figure 2
An Example of How Enterprise Services Support New Product Development

Enterprise Services Architecture bridges the gaps between partners with enterprise services that enable reusability and easy connection to other (external) systems (see the sidebar on the previous page). These features help customers orchestrate flexible processes, enhancing the user productivity and collaboration capabilities of SAP NetWeaver.

The unlimited reuse capabilities of enterprise services makes new deployment models like business process outsourcing easily available. The Supplier Selection service, for example, might be executed by an external service provider. ESA gives customers the option of leveraging their existing investments to create nimble composite applications combining SAP and non-SAP applications at an affordable cost.

Conclusion

Enterprise Services Architecture changes the way enterprise solutions are built and deployed, for both SAP and its customers. With ESA, SAP takes the concept of service-oriented architecture from the technical level to a comprehensive blueprint for adaptive business solutions:

  • ESA will drive the way that SAP delivers its own solutions, for increased leverage of existing assets, extended reach into growth business scenarios, and innovative growth strategies.

  • ESA also serves as a blueprint for customers, helping them to plan the evolution and rationalization of their own complex IT landscapes, based on open standards for cost-containment and long-term stability.

With ESA and SAP NetWeaver, SAP offers a new way to support enterprise business strategies and enables companies to transform their IT landscapes into a powerful enabler of change. For more on ESA and SAP NetWeaver scenarios, please visit www.sap.com/esa and www.sap.com/netweaver.


1 For further details on development and modeling tools available from SAP NetWeaver, see www.sap.com/netweaver. For more on how to create a Web service for a current application using SAP NetWeaver Developer Studio, see "Web Service Technology for SAP NetWeaver" by Karl Kessler in the July-September 2004 issue of SAP Insider (www.sapinsider.com).

2 SAP xApps are packaged composite applications that enable continuous business innovation.

3 The Composite Application Framework in SAP NetWeaver supports these ad hoc changes by end users. For more information on the framework, see www.sap.com/netweaver.


Thomas Mattern works as Product Marketing Manager for SAP NetWeaver, with a focus on Enterprise Services Architecture. He has 10 years experience in distributed software architectures and enterprise application development. Thomas has been a frequent speaker at conferences and author of various articles about integration technology, Web services, and service-oriented architectures.

 

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