innovation through enterprise services architecture · the winning strategy for growth ......

Innovation through Enterprise Services Architecture

Time to Change

Lee, Dong WooNetWeaver AdvisorCAO APA / SAP

SAP AG 2002, 1_Netweaver.ppt, Rolf Schumann 2

GROWTH THROUGH INNOVATION

The winning strategy for growth


THE NETWORKED ENTERPRISE & MARKET PRESSURE

Supplier Enterprise Channel CustomerValue-chain

Micro-economic view: Networks grow

Macro-economic view: Decision time pressures

Receive Info Make Decision

MarketDynamics

Shrinking Window


WHAT IS REQUIRED BY THE CUSTOMERS?

CEO’s Wish List*1 Reduce costs through efficiency/

increased productivity

2 Enable/drive business innovation

3 Create/enable competitive advantage

4 Enable growth

5 Improve ext. customer satisfaction

6 Enable regulatory compliance

7 Enable global operations

*CIO Magazine October 2004; survey of 544 CIOs and CEOs

PRODUCTIVITY

SUSTAINABLEDIFFERENTIATION

Relationshipexcellence

Product/Serviceexcellence

Operationalexcellence

Sustainable,ProfitableGrowth

Sustainable,ProfitableGrowth

Inno-vation

Inno-vation

Inno-vation


CORE & CONTEXT

Business Process Innovation


Minutes

Hours

Weeks

Months

1960s 1990s 2000s1940s1920s1900s 1980s

Days

Years

Processexecutiontime

BusinessProcessChange

ProductLifecycle

The Next Frontier: Reducing “Time to Change”

Source: Gartner


INNOVATION STANDARD-IZATION

COMMODI-TIZATIONINVENTION

COREFocus: Differentiation

CONTEXTFocus: Productivity

Courtesy to G. Moore’s “Living on the fault line”

THE BUSINESS CASE FOR CHANGE

EXAMPLE: AIRLINE CHECK-IN KIOSKS

‘99

‘02 ‘04

?

MissionCritical

Activities

EnablingActivities


INNOVATION STANDARD-IZATION

COMMODI-TIZATIONINVENTION

Courtesy to G. Moore’s “Living on the fault line”

BUSINESS IS NOT A ONE WAY STREET

NEW I.T. CAPABILITIES REQUIRED FOR THIS EVOLUTION

MissionCritical

Activities

EnablingActivities

CONSOLIDATE

COREFocus: Differentiation

CONTEXTFocus: Productivity

COMPOSE

INS

OU

RC

E

OU

T-T

AS

K

RETIREINVENT

SC

ALE


INNOVATION MEANS CHANGE

SAP NetWeaver™ – Enabler of change


Ability toEXECUTE

Strategy forGROWTH

Existing IT landscapeenables work

CEO sets strategy

$

Businesschange

TODAY’S I.T. IS NOT BUILT FOR CHANGE

A VICIOUS CYCLE?

Prohibitive cost andtime of IT changesIT not aligned with the business

Quick fixes result in more future risk/costCompanies move away from buy model into build model

>80% of IT budgetspent on status quoTCO pressures continue to rise


TODAY CHANGE IS TOO COSTLY AND SLOW

Purchaser Prod. Planner Accountant

ERP(Supplier)ERP

(Supplier)CRM

(Supplier)CRM

(Supplier)SRM(internal)SRM(internal)

ERP(internal)ERP

(internal)CRM(internal)CRM(internal)

SRM(Buyer)SRM(Buyer)

“Hard-wired”EnterpriseSystems

People as“Human

Integrators”

COMPLEX, CUSTOM BUILT INTEGRATION


WHAT ARE YOUR OPTIONS …

Do nothing… and die

Build your own platform or solution … and run into the TCO trap

Outsource everything… including your ability to change/innovate

Buy new systems and replace old ones… and don’t leverage existing investments

Architect for innovation… by elevating I.T. into an enabler of change

… TO DRIVE GROWTH?


Flexibilityfor business strategiesAlign IT with the business

Speedof innovationGrow faster than the competition

Sustainable cost structureMake continuous change affordable

Strategy forGROWTH

Ability toEXECUTE

SAP NetWeaver™Enabler of Change

$CEO sets strategy

$Enterprise Services

Architecture leverages existing IT investment

ELEVATE I.T. INTO AN ENABLER OF CHANGE

FLEXIBILITY, SPEED AND SUSTAINABILITY


ARCHITECT FOR INNOVATION

Enterprise Services Architecture


Enterprise Services Architecture

EnterpriseSystems

SAPNetWeaver™deliversEnterprise Services

Enterprise Services

Web Services Enablement

Internal andexternal Users

Order system

Sales forecast i2

ProductionSAP

FinishingJD Edwards

Log. Exec.System SAP

FinancialsSAP

Rx Order Planned forecast

Produce Paint finish Delivery &Invoicing

CompositeApplication

ОProd’n

orderО

Schedule mats

ОR

elease manuf

ОC

apacityО

Raw

Paint Colours

ОPlanned production

ОW

ork in progressО

Custom

er order trackingО

Return date

ОProcess return

ОQ

uality inspectО

Schedule delО

Schedule labour

ОInvoice

ОD

ebit account

Make to orderTake orderPrice

Check Avail. Produce InvoiceDeliverFinish

ОA

ddress,О

PriceО

Sales orgО

Sales divО

Order num

berО

Del date

ОC

heck stockО

Check B

OM

ОC

alc productionО

Update B

oMО

Plan labourО

Run M

RP


DIFFERENTIATION mySAPPOWERED BYNETWEAVER

Business Process lifecycle: Hitech Example

ENTERPRISESERVICES

SAP NetWeaverERPERP

CR

MC

RM

EnterpriseServices

Repository

PLMPLM

SRM

SRM

SCM

SCM

ManufactureManufacture--toto--InventoryInventory

OrderOrder--toto--CashCash

ProcureProcure--toto--PayPay

PRODUCTIVITYmySAP Business Suite

REINVENTING PLANNING AND MANUFACTURING PROCESS


DIFFERENTIATION mySAPPOWERED BYNETWEAVER


ENTERPRISESERVICES

SAP NetWeaverERPERP

CR

MC

RM

EnterpriseServices

Repository

PLMPLM

SRM

SRM

SCM

SCM

Plan Manuf.

Auction

PRODUCTIVITYmySAP Business Suite

ENTERPRISESERVICES

Source Procure P2PP2P

O2CO2C

M2iM2i



ERPERP

CR

MC

RM

PLMPLM

SRM

SRM

SCM

SCM

PRODUCTIVITYDIFFERENTIATION


REUSE PROCESS STEPS AND ENTERPRISE SERVICES IN

CUSTOM PROCESSES

SAP NetWeaver

ENTERPRISESERVICES

SAP NetWeaver

Plan Manuf.

Auction

Source


Procure

AvailabilityAvailability--toto--SaleSale

P2PP2P

O2CO2C

M2iM2i

EnterpriseServices

Repository


• Model-based• Event-driven• Service-oriented

xApp Cost & Quotation Management

mySAP Adaptive Manufacturing

New Generation SAP Solutions


SAP is Now a Solution and Platform Provider

Information TechnologySolutions

ProcessInnovationSolutions

SAP NetWeaver

UI UI UI

Functionalcomponents

DB DB

Composite Application

3 tier applicationsCoded transactionsBest practices

Service-oriented applicationsModel-driven applicationsBest practices and platform


SUSTAINABLE INNOVATION

SAP NetWeaver at work


A NON-SUSTAINABLE COST STRUCTURE

INNOVATING YOUR WAY OUT OF BUSINESS?

10%10% 10%10%

90%90% OPERATION

INNOVATION

TCOthis year

TCO in2 years

15%15%

85%85%

20%20%

80%80%

TCOnext year

10%10%Innovation

Project

InnovationProject


Cost of integrationplatforms

Cost ofapplications

THE COMPLETE TCO PICTURE

Total cost ofownership =

App

licat

ions

Plat

form

COMPLEXITY & COST DRIVERS IDENTIFIED

Cost of integratingapplications and platforms

+

+

PlumtreePortal

PlumtreePortal

CognosBus. Intell.CognosBus. Intell. ……

KnowledgeMgmtKnowledgeMgmt

MobileInfrastr.MobileInfrastr.Tibco

EAITibcoEAI

SiebelCRM

SiebelCRM

PsftHR

PsftHR

SAPR/3

SAPR/3

SAPR/3

SAPR/3

Legacyor

Partner

Legacyor

Partner


INNOVATE WHILE CONTAINING COSTS

USING ONE INTEGRATED PLATFORMA

pplic

atio

nsPl

atfo

rm SAP NetWeaverPortal, Mobile, Collaboration, BI, KM, Master Data Mgmt, Messaging, BPM all in ONE PLATFORM O

ther

Oth

erSiebelCRM

SiebelCRM

PsftHR

PsftHR

SAPR/3

SAPR/3

SAPR/3

SAPR/3

Legacyor

Partner

Legacyor

Partner

REDUCED cost of integration platforms

Cost ofapplications


Cost of integrating applications and platforms


mySAPERP

INNOVATE WHILE CONTAINING COSTS

USING SOLUTIONS THAT COMBINE APPS ANDINTEGRATION PLATFORM INTO ONE OFFERING

App

licat

ions

Plat

form SAP NetWeaver

Portal, Mobile, Collaboration, BI, KM, Master Data Mgmt, Messaging, BPM all in ONE PLATFORM O

ther

Oth

erSiebelCRM

SiebelCRM

PsftHR

PsftHR

SAPR/3

SAPR/3

ERPservicesERP

services

Legacyor

Partner

Legacyor

Partner

REDUCED cost of integration platforms

Cost ofapplications


REDUCED cost of integrating apps and platforms


SAP xAppsmySAPBusiness Suite

ARCHITECT FOR INNOVATION

ENTERPRISE SERVICES ARCHITECTUREA

pplic

atio

nsPl

atfo

rm SAP NetWeaverPortal, Mobile, Collaboration, BI, KM, Master Data Mgmt,

Messaging, BPM all in ONE PLATFORM

SiebelCRM

SiebelCRM

PsftHR

PsftHR

SAP EnterpriseServices

SAP EnterpriseServices

Legacyor

Partner

Legacyor

Partner

Com

posi

tes

EIC

EIC = Employee Interaction CenterxPD = SAP xApp Product Definition

xPD, Partner

Innovation

Adaptability

Efficiency

At

Low

er T

CO

$


Enterprise Services Architecture:Innovate and move to a sustainable cost structure

10%10%

30%30%

OPERATION

CONSOLIDATION

INNOVATION30%30%

60%60%

TCO today TCO 3 Yearsfrom now

20%20%

30%30%

REDUCE TCO AND ENABLE INNOVATION


THE VALUE DELIVERED WITH SAP NETWEAVER

TCO REDUCTION BY INTEGRATION

INNOVATION BY FLEXIBILITY

Diff

entia

tion

-CO

RE

Prod

uctiv

ity-C

ONT

EXT


KILLING TWO BIRDS WITH ONE STONE

CEO’s Wish List*

1 Reduce costs through efficiency/increased productivity

2 Enable/drive business innovation

3 Create/enable competitive advantage

4 Enable growth

5 Improve ext. customer satisfaction

6 Enable regulatory compliance

7 Enable global operations

Productivity andefficiency gainsfor bottom line

savings

Need to constantlyinnovate to differentiateand stay ahead ofcompetition

CO

RE

CO

NT

EX

T


HOW TO GET THERE?

Start your ESA Roadmaps today


HOW TO GET THERE? – THE ESA ROADMAP

SAP NetWeaver

DIFFERENTIATION

PRODUCTIVITY

mySAPBusiness Suite

mySAPERP

Composites

SAP NetWeaverBusiness Process PlatformSAP NetWeaver

Business Process Platform

Enterprise Services

Repository

Enterprise Services

RepositoryPlatformProcess Components

PlatformProcess Components

LegacySystemLegacySystem

3rdParty3rd

Party

Analytics

Composite Applications

SAPPartnerSAP

PartnerSAPSRMSAPSRM

SAPERPSAPERP BuyerBuyer

No two roads are fully alike

Industry and companydrive the specific needs

Use pragmatic stepsfor fast ROI via IT practices

Use strategic pathsto unveil the complete power of ESA


SAP ROADMAP TO ESA – WE’VE STARTED!

Enterprise services inventory and prioritization First service-enabled scenarios with focus on collaboration

2004

2005Enterprise services inventory for planningMore service-enabled scenarios: focus on user centricity and business process flexibility

2007 All SAP solutions become ESA-compliant

2006Enterprise Service Repository for active useMajor cross-industry scenarios service enabled

SAP NetWeaver™

APPLICATION PLATFORM

Com

posi

te A

pplic

atio

n F

ram

ew

ork

PEOPLE INTEGRATION

INFORMATION INTEGRATION

PROCESS INTEGRATION

Integration Broker

BusinessProcess Mgmt


Life

Cyc

le M

gmt

PROCESS INTEGRATIONPROCESS INTEGRATION


PEOPLE INTEGRATION

SAP NetWeaver™


Com

posi

te A

ppli

catio

n F

ram

ew

ork

PEOPLE INTEGRATION


PROCESS INTEGRATION

Integration Broker



Life

Cyc

le M

gmt



PEOPLE INTEGRATION

SAP NetWeaver™

APPLICATION PLATFORMCom

posi

te A

pplic

atio

n F

ram

ew

ork

PEOPLE INTEGRATION


PROCESS INTEGRATION

Integration Broker



Life

Cyc

le M

gm

t



PEOPLE INTEGRATION


ES

A C

OM

PLI

AN

CE

YOUR ROADMAP TO ESA – START TODAY!

Agree on your long term IT architecture

Build IT consolidation skills

Drive productivity through consolidationConsolidate integration technologies, app servers and hardware, user interfaces, master data, legacy systems, etc.

Deploy xApps and SAP NetWeaver beyond mySAP solutions to kick start ESA transition

Build process composition skills

Start extending the Enterprise Services Repository

Process modeling, services modeling, event def. & resolution, role def. & assembly

Differentiate by composing custom processes

KEY SKILLS: COMPOSE & CONSOLIDATE


YOU AND SAP WORK TOGETHER

RECOMPOSITIONRECOMPOSITION

TODAY

ESA-compliant m

yS

AP

or pa

rtne

rsolution pow

ered by SAP N

etWeaver

SAP NetWeaver

SAPservices

SAP composites

SAP definedroles,events &services

SAP definedroles,events &services

SAP NetWeaver

SAPservices

SAP composites

Partner &Customservices

Busines

partnerB

usinespartner

LegacyLegacy

3rd

party3

rdparty

SAP and Partner xApps

Custom composites

SA

P N

etW

ea

ve

ran

d x

Ap

ps h

elp

you

evol

ve y

our e

ntire

IT la

ndsc

ape

to E

SA

SAP NetWeaver

Busines

partnerB

usinespartner

LegacyLegacy

3rd

party3

rdparty

xApps & customcomposites

Partner&Customservices Custom

definedroles,events &services

Customdefinedroles,events &services

EnterpriseServices

Repository

SERVICE ENABLEMENT (SAP)

SERVICEENABLEMENT (YOU)


The ESA Adoption Program


ESA Roadmap Example: Innovative Order-to-cash Process

2005 2006 2008

Time

2007

short term mid term long term

ApplicationsRoadmap toApplicationLandscape

R/3 „P01“ 4.6c

R/3 „P02“ 4.6c„P03“ mySAP ERP05

LOTUS DB

SIEBEL CRMmySAP CRM 5.0

HYPERION

ERP

CR

MSE

M

PlatformRoadmap toNetweaver

SAP XI / BPM 3.0 SAP XI / BPM „2006“

SAP Portal 6.0 SAP Portal „2006“

SAP MDM 3.0PoC

PoC

PoC

SAP BW 3.5PoC SAP BW „2006“

SAP BW „2006“

Business ProcessesRoadmap to Enterprise Services

Order entry

OTC

Order management (IDOC)order entry

Clearing

Validation CheckATP checkGTS check

Credit checkOrder processing

InvoicingControlling


SUMMARY

Time to change


SUMMARY

Enterprise Services Architecture is a strategic step to innovate your business

Enterprise Services Architecture increases productivity and delivers you opportunities to differentiate

Each roadmap to Enterprise Services Architecture is unique

Start smart and develop a comprehensive solution - step-by-step

Enterprise Services Architecture supports you to realize customer and industry specific needs


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innovation through enterprise services architecture · the winning strategy for growth ......

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