Changing Business and Software James Rumbaugh, IBM Distinguished Engineer
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1 IBM Software Group Changing Business and Software James Rumbaugh, IBM Distinguished Engineer (Copyright) IBM Corporation 2005
2 Business is Changing Monolithic distributed Tightly controlled open Stable constantly changing 2
3 Where We Are Heading Case Study: Procure to Pay Process Division 3
4 Where We Are Heading Case Study: Procure to Pay Process Customer Division Change: Customer Order Entry 4
5 Where We Are Heading Case Study: Procure to Pay Process Customer Division Shared Change: Shared Marketing, Billing, Receivables 5
6 Where We Are Heading Case Study: Procure to Pay Process Customer Division Shared Supplier Change: Supplier Handles Inventory 6
7 Where We Are Heading Case Study: Procure to Pay Process Customer Division Shared Supplier Outsourced Change: Shipping by FedEx, DHL or UPS 7
8 Where We Are Heading Case Study: Procure to Pay Process Customer Division Shared Supplier Outsourced Change: Collections Outsourced 8
9 Where We Are Heading Case Study: Procure to Pay Process Customer Division Shared Supplier Outsourced Change: Process Optimization 9
10 Why is Incremental Change Desirable? More pragmatic approach to re-engineering efforts Gradual improvement Tied to tangible business benefits Each function where it best meets business needs: Within the organization From a business partner Completely outsourced Tune ongoing business without widespread disruption 10
11 IT Architecture is a Choke Point for Business Monolithic systems and applications can t be reused Ad hoc integration is difficult to change/maintain Lack of standards limits interoperability Rigidity makes small improvements hard to justify Case Study: Procure to Pay Process Customer Division Shared Supplier Outsourced 11
12 1 IBM Software Group Complexity is Forcing Change Maininframe PC/NT apps Unix apps 3rd Party Interface AIS Reports Due Dates Stores & Mrkts Smart Plus Broadcast Filter AIS Calendar General Maintenance Vendor Setup Budget Analysis Tool Insertions Orders Invoice App Vendor Maintenance Printer Maintenance Printer PO Print Costing Process Servers (Imaging) S20-Sales Polling E13 E3 Interface Mesa Data NEW Soundscan NPD Group AIG Warranty Guard S01 - Sales Corrections Roadshow I06 - Customer Order Sterling VAN Mailbox (Value) I13- Auto Replenishment Fringe PO Depository Banks UAR - Universal Account Reconciliation I17 Customer Perceived In-Stock I06 Warehouse Management I15 Hand Scan Apps Smart Plus Launcher P16 - Tally Sheet M03 - Millennium 3.0 M02 - Millennium S07 - Cell Phones D01 Post Load Billing S04 - Sales Posting I03 Return to Vendor S06 - Credit App Stock Options L02-Resource Scheduling P15 EES Employee Change Notice Equifax A04 - Cust Refund Chks I12 Entertainment Software E01-EDI S09 - Digital Satellite System L01-Promo Analysis Resumix Cobra ACH Banks - ACH and Pos to Pay Scorecard - HR CTS Plan Administrators (401K, PCS, Life, Unicare, Solomon Smith Barney) P09 Bonus/HR E02-Employee Purchase Prodigy P14 On-line New Hire Entry P09 - P17 Cyborg Intercept V03- Mkt Reactions POS S08 - Vertex Sales Tax S03-Polling P01- Employee Masterfile NPD, SoundScan Frick Co V04-Sign System Spec Source SKU Tracking Spec Source V01-Price Management System AAS CTO2 U18 - CTO B01 - Stock Status I05 Inventory Info I04 Home Deliveries I09 Cycle Counts S02 - Layaways I10 Cycle Physical Inventory I11 Price Testing S11 - ISP Tracking L60 MDF Coop I01 PO Receiving V02-Price Marketing Support I02 - Transfers Supplier Compliance Washington, RGIS, Ntl Bus Systems X92-X96 Host to AS400 Communication SKU Performance SKU Selection Tool ASIS Store Monitor Texlon 3.5 U16-Texlon I35 - CEI Rebate Transfer ELT PowerSuite Sign System CopyWriter's Workspace I18 SKU Rep G02 - General Ledger B02 Merchandise Analysis I55 SKU Information NARM EDI Coordinator K02 Customer Repair Tracking I14 Count Corrections I07 Purchase Order I35 Early Warning System Valley Media Arthur Planning Ad Expense Store Scorecard Store Budget Reporting BMP - Bus performance Mngt Merch Mngr Approval Batch Forecasting Ad Measurement AIMS Admin AIMS A05 - AP Journal Entry Tool Kit Ad Launcher Data Warehouse (Interfaces to and from the Data Warehouse are not displayed on this diagram) PSP In-Home Repair Warranty Billing System AIMS Reporting Star Repair C02 - Capital Projects F06 - Fixed Assets Optika SiteSeer US Bank Recon File Connect 3 PDF Transfer Connect 3 Connect 3 Reports Cash Over/ Short S05 - House Charges ICMS Credit Cellular Rollover Cash Receipts/Credit OTHER APPS - PC AP - Collections/Credit TM - Credit Card DB Misc Accounting/Finance Apps - PC/NT COBA (Corp office Budget Assistant) PCBS(Profit Center Budget System) Merchandising Budget INVENTORY CONTROL APPS - PC Code Alarm Debit Receivings Devo Sales Display Inventory In Home Junkouts Merchandise Withdrawal Promo Credits RTV Accrual Shrink AP Research - Inv Cntrl AP Research-Addl Rpts Book to Perpetual Inventory Close Out Reporting Computer Intelligence Data Count Corrections Cross Ref for VCB Dnlds Damage Write Off Debit Receivings DFI Vendor Database Display Inventory Reconcile Display Inventory Reporting INVENTORY CONTROL APPS - PC DPI/CPI IC Batching Inventory Adj/Count Correct Inventory Control Reports Inventory Levels Inventory Roll Merchandise Withdrawal Open Receivings PI Count Results PI Time Results from Inv Price Protection Sales Flash Reporting Shrink Reporting SKU Gross Margin SKU Shrink Level Detail USM VCB Downloads ACCTS REC APPS - PC 990COR Bad Debt Beneficial Fees Beneficial Reconcile JEAXF JEBFA JEBKA JEDVA JESOA JEVSA JEVSF NSF TeleCredit Fees Actual Application Architecture for Consumer Electronics Company 12
13 But Technology Applied Correctly can Pave the Way for successful Business Innovation Standards (including open source) for interoperability Self-defined, loosely coupled interfaces Tools to visualize and integrate existing assets Model Driven Architecture (MDA) Declarative specifications and languages Case Study: Procure to Pay Process Customer Division Shared Supplier Outsourced Compositional techniques like Aspect Oriented Programming 13
14 Tying Business Models to the Supporting IT Architecture Flexible Business Transformation Business Process Outsourcing Mergers, Acquisitions & Divestitures Requires Composable Processes (CBM) Component Business Modeling Flexible IT On Demand Operating Environment s Oriented Architecture (SOA) Development Infrastructure Management Software Development Integration Infrastructure Management Composable s (SOA) Oriented Architecture 14
15 Three Key Concepts Component Business Modeling (CBM) Oriented Architecture (SOA) Model Driven Architecture (MDA) 15
16 Component Business Models Permit Change Identify business transformation opportunities at the business process level Make new business process composable and flexible Planning and Analysis Tactics (Direct, React and Control) Operate and execute Develop New Markets and Products Marketing Market and Brand Strategy Brand Management Marketing Communicatio ns, Advertising and Promotion Marketing Research and Analysis Customer Analytics and product matching Execute Campaigns an d market fulfillment New Product Development Product Portfolio Planning Partner Product Dev. Strategy Product Development and Retirement Development and Retirement Launch Product Acquire and Manage Customers Develop and Provide Network s Manage Enterprise Customer Billing and Provisioning Sales Management Collections & Fulfillment Assurance and Care Sales Channel Strategy Fulfillment Customer and resource Strategy and Care Strategy Planning Readiness Alliance Planning Strategy Sales, Billing & Channel, and Collections Management Alliance Management Management Customer Care Device and Management Supplier Order Management Account Customer Planning SLA / QoS Management Loyalty and Retention Customer Interface Management Supplier/ Order Handling Partner Customer Contact Operations Problem Reporting & Sales Problem B&C Management Configuration, Rating Activation and Customer Disconnects Billing Problem Sales Handling and Supplier/ Problem Resolution Partner Resource Management Settlement Provisioning and Billing Network Resource Business Development Management Strategic Enterprise Planning Technology and Resource Strategy and Supply IT Strategy Chain/Value Net Capacity Strategy Planning Stakeholder Mgmt/ Legal and Regulatory Network Resource Performance Management Supplier/ Partner Performance Management Enable resource provisioning (Engineering and Construction) Testing and performance management Inventory Management Financial and Asset Management HR Management Procurement Technology Management (IT, R&D, Disaster Recovery) Stakeholder and External Relations Management Model the business as components with defined services that the business provides or consumes s are provided by IT systems, sourced from providers or supported manually 16
17 Business Components Business performs activities Ex: Rent vehicle Activities use resources Ex: Rental car, parking spot, agent A business component is a set of activities and resources Ex: Rental location owns cars and rents and checks in cars It is a virtual business unit that can operate independently 17
18 Dependencies among Components Activities depend on other components Resource usage Control and information flows Goal: restrict dependencies among components Regroup activities and resources Channel them through services 18
19 s IBM Software Group A service is an explicit interface with no back doors has a defined contract Inputs and outputs Interaction protocol Performance Components linked by services are substitutable 19
20 A Business Component offers services to other components Required s Business Plans Market Events Component Name Market Segment Planning Description To analyze markets and derive targets Product Portfolio Updates Tracking Models & Targets Provided s 20
21 Business components use each other s services. Business Plans Component Name Market Segment Planning Product Portfolio Updates Product Portfolio Updates Component Name Business Strategy Description Define business strategy From Product Management business component Market Events Description To analyze segments and derive targets Tracking Models & Targets Component Name Segment Tracking Description Track target segments 21
22 A Business Component Map is a tabular view of the business components in scope. Business Administration New Business Development Relationship Management Servicing and Sales Product Fulfillment Financial Control and Accounting Directing Business Planning Sector Planning Account Planning Sales Planning Fulfillment Planning Portfolio Planning Controlling Business Unit Tracking Staff Appraisals Sector Management Product Management Relationship Management Credit Assessment Sales Management Fulfillment Planning Compliance Reconciliation Staff Administration Product Directory Sales Product Fulfillment Customer Accounts Executing Product Administration Marketing Campaigns Credit Administration Customer Dialog Contact Routing Document Management General Ledger 22
23 Building an Architecture CBM Strategy Modeling SOA Realization Step 1: Break down your business into components Decide what is strategically important Prioritize and scope your transformation projects Step 2: Define a Model Identify services based on business components Make decisions based on architectural criteria Step 3: Implement a Architecture Develop a service-oriented architecture to support the componentized business Business-Aligned IT Architecture 23
24 Oriented Architecture (SOA) Flexible connectivity: Represent application or resource as a service with a standardized interface Enable exchange of structured information (messages, documents, business objects ) Mediate message exchange through a connectivity layer (enterprise service bus) Provide on-ramps to the bus for legacy application environments Combines new and existing applications to address changing business needs Facilitates the management of business performance, quality of service, and dynamic monitoring 24
25 Component Conceptual Model Module, Import, and Export ESB MyValueModule Export MyValue Web Component MyValue Import StockQuote Import CustomerInfo Export Customer Info Component CustomerInfo CustomerInfoModule 25
26 SOA Defining Concepts Universal Connectivity: Integrates most diverse environments, bridging protocols, languages, platforms, APIs and messaging paradigms providing scale and scope of integration required by today s extended enterprise Orientation: Facilitates loose coupling between software components Incremental Integration: Start small and plug in capability to enrich your implementation as needs dictate Event Orientation: Decouples applications that publish business events from subscribing applications Open, standards-based: Open APIs and protocols support the interoperability and substitution of middleware from multiple vendors Flexibility: A variety of options for persistence, reliability, security, availability... Deploy where required, manage centrally 26
27 A SOA has Multiple Layers Modeling Consumer Provider Business Process Process Choreography s Simple and Composite s Components Enterprise Components Existing Resources Custom Application Custom Application Package Package Integration Architecture QoS, Security, Management & Monitoring (Infrastructure ) 27
28 Model Driven Architecture (MDA) Build high-level models Expressed in domain concepts Generate platform-specific code Into specified architectures Using automated tools Based on standards 28
29 MDA Approach Domain model Captures business knowledge Implementation profile Platform Technology decisions Design model Captures implementation decisions Translator incorporates platform knowledge Implementation profile Programming language Domain model Design model Code 29
30 MDA Requires Domain models UML or domain-specific language (DSL) Architecture frameworks Make assumptions about infrastructure Use them to remove details from models Automated tools Modeling tools Translators 30
31 Domain Models Syntax and semantics for a particular purpose Capture business-level content More intuitive syntax Reduce mindless repetition Predefined control and data patterns Eliminate repetitious control specification Two approaches: UML Profile Domain specific language (DSL) 31
32 Architecture Decomposition into subsystems Topology Interaction rules Data formats Resource management Hooks for future extensions Scaffolding for testing 32
33 Architecture Framework Framework = reusable architecture pattern Includes: Skeleton execution environment Predefined subsystems and topology Interaction and data rules, formats, interfaces Attachment points for plug-ins Component libraries of useful functionality Sample applications Integrated development environments (IDE) Eclipse,.NET, J2EE 33
34 Framework Advantages Enable domain specific languages (DSL) to optimize repeated patterns Ensure consistency Excellent for incremental design Enforce design trade-offs Supports static and dynamic analysis 34
35 Automated Tools Modeling tools Organize large models Check correctness Enable teamwork Translators Apply patterns Generate repetitious code Key to MDA 35
36 Iterative Development start Iterative process target iteration waterfall process failure 36
37 Iteration IBM Software Group Common baseline No divergent versions or schedules Specific goals Set priorities by adjusting goals Specific deadline All iterations about the same length At the end of an iteration: Check in everything Build an executable system Test and examine it Reevaluate priorities 37
38 Iterative Development Process Series of iterations allows mid-course corrections Executable releases permit constant evaluation Attacking problems early reduces risk 38
39 Summary IBM Software Group Business is becoming distributed Component Business Model IT architecture must support business models Oriented Architecture Automate business-to-architecture mapping Model Driven Architecture Avoid monolithic development Iterative development process 39
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