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Innovation from Chaos: Master Your Unruly IT Landscape Through an Incremental Approach to System Consolidation

by Greg Crider | SAPinsider

October 1, 2004

Faced with the vast diversity of IT systems they have developed, acquired, or inherited over the years, IT organizations are looking for practical, incremental strategies for consolidating these systems. The System Consolidation scenario using SAP NetWeaver outlines a step-by-step approach to streamline your IT infrastructure and limit the impact on the user experience.

Many enterprises are struggling to keep up with the vast diversity of IT systems they have developed, acquired, or inherited over the years. Faced with ever-rising maintenance costs and user information overload, these companies are looking to reduce the need for redundant databases and applications. Cost savings, while central to many discussions of IT system consolidation, aren't the only — or even the greatest — benefit of simplifying an IT system landscape. Executives are realizing that when their IT teams are no longer tied down by routine maintenance chores, they gain the flexibility to focus on innovation, and supporting the new business processes is essential to supporting progressive corporate strategies.

With this in mind, many organizations have made a strategic decision to rationalize and eventually simplify their IT landscapes. But once the decision to consolidate is made at the strategic level, how can IT organizations break out of the system maintenance trap? For most companies, a "big bang" approach to migrating their infrastructure and complete range of enterprise applications is simply too expensive and disruptive to consider. Instead, many IT organizations have begun looking for practical, incremental strategies for reducing the number of IT systems they support — and at the same time, minimizing the impact on users and critical business processes.

The SAP NetWeaver technology platform enables companies to take this kind of step-by-step approach. SAP has developed a growing library of practical IT scenarios for updating your architecture that provide visible benefits at each step of the way. One such scenario, System Consolidation, outlines an approach to streamlining your IT landscape. The initial implementation delivers results quickly, giving the IT team the opportunity to build the momentum and skills needed to eliminate redundant systems efficiently and incrementally — without incurring the wrath of displaced users or creating budgetary black holes. Ideally, system consolidation should, at first, be virtually unnoticed by end users, who can continue to manage their critical business processes and important reporting and analysis through new but familiar-looking interfaces. The strategic impact of consolidations comes later, with IT's improved ability to respond to new business opportunities and threats.

Instead of being a progress bottleneck, an unleashed IT organization can concentrate on supporting new business processes. With a new technology platform based on a modern services-based architecture in place, IT will be able to face forward and become a force for aggressively promoting innovation across the enterprise.

The Right Tools Simplify the Process: SAP NetWeaver and Web Services

The SAP NetWeaver technology platform is designed to help IT organizations incrementally support IT scenarios like System Consolidation, with a suite of components and tools that contribute to an incremental migration of diverse systems. Those components described in this scenario include:

  • SAP Enterprise Portal (SAP EP), an ideal environment for building a single, unified enterprise interface for decision support and conventional applications

  • SAP Business Intelligence (SAP BI), which creates data warehouses and data marts that can extract and combine data from operational databases

  • SAP Exchange Infrastructure (SAP XI), which lays the tracks for passing data back and forth between applications

  • SAP Web Application Server (SAP Web AS), which contains the tools for connecting existing applications to the enterprise Web services backbone

  • SAP Master Data Management (SAP MDM), which synchronizes data across all applications, creating a common format with standardized data attributes and definitions

SAP NetWeaver also includes technology and tools for developing the "industrial-strength" Web services required to support a service-oriented approach to end-to-end business processes. While IT professionals have been hearing about Web services for years, most IT organizations have had to wait for a new platform that could provide the security, reliability, and robustness their organizations need to make the jump to a Web services-based architecture.

The System Consolidation scenario is a good starting point for understanding how to make this transition. System Consolidation offers a clear opportunity to leverage the SAP NetWeaver platform and the underlying Enterprise Services Architecture. You can use Web services to gain greater flexibility and adaptability in your IT landscape by reducing unneeded system redundancies and dependencies. (See "Moving Toward Enterprise Services Architecture".)

A Four-Step Approach to Streamlining Your IT Assets

Let's start by looking at one aspect of a typical enterprise landscape, the diverse array of HR systems that a global company may acquire or develop over the years (see Figure 1). Maintaining and updating the various versions of SAP and homegrown HR systems has placed an increasing burden on the IT department's resources and has frustrated users who must navigate across multiple systems. Employees transferred to different company sites struggle with unfamiliar systems to do the most basic tasks, like updating their home address or scheduling time off. HR professionals must be trained on a wide range of dissimilar systems, and updates to company-wide HR practices must be implemented and tested across multiple, unconnected systems.

Figure 1
A Global Enterprise's Array of HR Systems

SAP's System Consolidation scenario outlines a process to streamline your IT infrastructure that can deliver significant benefits at each step (see Figure 2). A company can incrementally take any or all of these steps, using systems and schedules that make sense for them. The scenario provides an example based on SAP experience with processes that build on each other and provide complementary benefits using successive implementations of SAP NetWeaver components.

Figure 2
The System Consolidation Roadmap from SAP

This roadmap begins with the visual integration of data and applications inside a new, common interface, which has two immediate benefits: it creates a uniform look and feel with a familiar Web browser interface, and at the same time it separates these interfaces from backend design and programming. This sets the groundwork for changing backend systems without disrupting users' day-to-day work. The scenario then moves to improving data integration, both at the operational reporting levels and the application-to-application levels. And, finally, it moves to consolidating the enterprise master data — the core definitions of products, customers, and other basic information elements required to create a consistent global view of business operations. Let's walk through each of these four steps.

Step 1: Consolidate Key User Interfaces

In this first step, SAP EP groups together diverse systems — including many of a company's most commonly used applications, information, and services — into a single, browser-based interface. This consolidated interface provides a benefit users can enjoy immediately. It gives them a Web-based, personalized interface to various data sources or applications appropriate to their day-to-day work. SAP EP interfaces are frequently used for creating self-services applications, for establishing communities of interest, and for promoting teamwork across geographical and organizational boundaries.

Just as importantly, SAP EP allows IT to make underlying infrastructure changes without disrupting business processes or requiring end-user retraining. For example, portal users accessing employee self-service functions can continue using those features even as backend human resource systems are updated or replaced. The portal lets the IT team begin addressing the need to consolidate redundant and inefficient parts of the infrastructure without impacting end users.

Step 2: Consolidate Operational Data

In a similar way, SAP BI now enables the organization to integrate and aggregate data from the company's operational databases to ensure that business data is populated in appropriate structures, ready for analysis. It also incorporates third-party and syndicated data into the overall analytic framework to deliver comprehensive business insights. Looking back at our global HR example, we can see HR teams trying to create global reports on headcount, payroll, and productivity based on data coming from diverse backend systems; they desperately need something more powerful than a spreadsheet to integrate their information. SAP BI provides a scalable approach for consolidating databases created by SAP, third-party, and proprietary applications to create up-to-date and reconciled reports, as well as sophisticated multidimensional analyses.

By creating an operational reporting environment that reduces the burden on transactional systems, SAP BI allows the IT team to leverage existing systems and deliver integrated views of data that are not tied to the design of any particular backend system. These integrated views are independent of the applications generating the data, which enables the IT team to make changes in backend applications without hampering the ability of analysts and decision makers to access critical business intelligence.

Moving Toward Enterprise Services Architecture

This step-by-step approach to consolidation serves another purpose: It prepares companies to take full advantage of a service-oriented architecture that SAP calls Enterprise Services Architecture. This architecture is a blueprint for structuring applications using Web services in such a way that they create a flexible foundation for transforming existing applications into services-based business processes. It shows IT organizations how to package existing applications for reuse through Web services. Once packaged, these applications can be recombined to make up new enterprise services that cover entire processes, and can be quickly reconfigured to meet changing business conditions.

In the blueprint laid out by Enterprise Services Architecture, application services provide details on the individual business process steps, while enterprise services put everything together. The result? An architecture that enables the composition of flexible business processes that span multiple systems and organizations. This approach leaves behind the old equation that making systems work creates spiraling maintenance costs; instead, it lets IT focus on fostering innovation in its user communities.

For more on SAP NetWeaver scenarios and how they help prepare SAP customers for Enterprise Services Architecture, see "Build a Services-Based Infrastructure That Enables Business Change While Containing Costs" by Thomas Mattern in this issue of SAP Insider.

Step 3: Consolidate Application-Level Interactions

The third step, accomplished via SAP XI, delves deeper still into the enterprise IT infrastructure by integrating application-to-application (A2A) interactions. A2A integration enables companies to support business processes in which data moves automatically and reliably across functional application silos. In our global HR example, information might also flow between HR and financial systems so that HR tools could be updated with the latest payroll figures for compensation reporting, and financial forecasting tools could be synchronized with HR systems to provide more accurate predictions of costs based on projected employee turnover and growth.

SAP XI provides an open and reusable approach to A2A integration. Based on Web services and open standards, it manages heterogeneous applications from multiple vendors along with legacy systems. It also allows the IT team to adapt business processes to changing business requirements without having to deal with specific component code. All the relevant underlying definitions needed to integrate any component can be uploaded into SAP XI, thus avoiding the rigidity and costs of having a large number of direct connections between individual application components.

SAP XI comes preloaded with the templates required to support the mySAP Business Suite family of solutions, so integration between SAP products works out-of-the-box. This modular approach reduces integration costs and makes the incremental replacement of redundant or outdated applications less expensive, less labor-intensive, less risky, and more feasible than the replacement of systems connected by hard-coded, point-to-point integration.

Step 4: Consolidate and Harmonize Enterprise Master Data

Finally, the SAP MDM component enables the IT team to consolidate and harmonize the data elements that are shared across enterprise applications. It also ensures that data definitions are used consistently across independent applications and that changes to data values are reliably percolated across systems. By creating a centrally maintained and unified view of key data points like customers or products, you reduce the costs and data latency issues involved in cross-referencing multiple databases using manual or point-to-point, custom-coded processes.

Because SAP MDM tracks the data relationships between enterprise applications, IT can document and maintain the data dependencies between systems — and systematically account for these when updating or eliminating systems. This makes system consolidation less likely to introduce data consistency issues and reduces the cost of eliminating redundant systems.

Enhanced Flexibility, Sharper Competitive Edge

An incremental approach to system consolidation using SAP NetWeaver avoids the risks of a "big bang" upgrade, allowing an IT organization to develop the skills and processes necessary both to manage this important transition and to focus on innovation, not maintenance. What's more, it limits the impact on users' day-to-day experience, helping eliminate training costs and barriers to user acceptance.

In short, the System Consolidation scenario demonstrates how SAP NetWeaver allows IT to shift its focus to improving business processes and supporting innovation in the face of competition and market demands, and can help enterprises overcome the limitations created by brittle and inflexible IT landscapes.

For more information on SAP NetWeaver components that support the System Consolidation scenario, please visit

Greg Crider is Director of Portal Product Marketing at SAP. Prior to joining SAP, he was Vice President of Product Management and Product Marketing at Viador Inc., the first publicly traded enterprise portal company, where he helped direct their product vision and founded their support and training organizations. Crider came to Viador from Sterling Software, where he spent 10 years as a product manager, engineering manager, and software developer. He has a masters degree in Computer Science and a bachelors degree in Education.


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