|
 eSOA from the Outside In:
Lessons from "Mashup Corporations"
Unabridged Edition, Never Before Released
by Jon Reed
Jon Reed notes: I recently discovered that this article I did on eSOA for SAPtips in the Spring of 2008 did not find its way to this site. Paul Kurchina, co-author of Mashup Corporations and the recently released In Pursuit of the Perfect Plant, took the time to review and proof this article so I'm glad to have a chance to feature this article now. I hope you find it as interesting as I did while I was writing it.
Introduction:
The Challenge of SOA Adoption and How Mashup Corporations Can Help
In my last two CIO Corner articles, I wrote about the potential of SOA in SAP environments and also touched on the challenges this new architecture poses. The first article (Oct/Nov 2007 Edition) explained how SOA can empower SAP customers to return to a business process-driven approach to ERP, as opposed to having to give up their specialized processes to conform to a standard ERP system. The second article (Dec/Jan 2008) illustrated how SAP customers can use "mashups" to get the most out of their BW/BI analytical data, without necessarily having to invest in a big upgrade to the enterprise core.
Both of my articles have alluded to the organizational changes that a full adoption of SOA requires. We have posed the question, "is SOA hype?" Or to put it another way, "Is SOA worth the hassle?" From my research so far, the preliminary answer is yes. SOA is going to deliver on much of its potential, but I believe the true rewards of SOA, at least from an ROI perspective, will go to the SAP customers who use SOA strategically, and that means anticipating the organizational and cultural changes that SOA poses.
Unlike other overhyped IT trends that never delivered, SOA stands a much better chance of panning out. That's because SOA fits neatly into the overall trend of moving IT out of the server room and turning it into a business-driven corporate asset. IT is gradually evolving from a cost-cutting tool to an integral aspect of the core business that provides real strategic value by automating and supporting processes that allow a company to differentiate itself from its competitors.
Using SOA, companies can now build or "mash" applications that will set themselves apart from others in their industry, without over-customizing the ERP code base. (See my Oct/Nov article for more on why over-customizing ERP has failed, and my Dec/Jan article for more on how mashups are changing the entry-level opportunities into SOA).
But despite its promise, succeeding with SOA is easier said than done. That's why we need an effective SOA roadmap, based on the winning example of companies that have forged ahead with SOA and seen a benefit. We need a better grasp of how SAP users are changing the role of IT to better serve their businesses, and we need to know how to address the inevitable resistance to this type of organizational change.
SAP has begun the work of documenting eSOA case studies, but there is more to be done. One book in particular, Mashup Corporations, is a key step in the SOA education process that should be read by all companies who are evaluating their SOA approach. Written by Andy Mulholland, Chris S. Thomas, Dan Woods, and Paul Kurchina, Mashup Corporations uses the fictional narrative of appliance maker "Vorpal Inc." to describe the challenges that CEO "Jane Moneymaker" and her team face as they are confronted with a new SOA-driven revenue opportunity that requires a host of organizational changes to capitalize on.
Although Mashup Corporations is not solely focused on SAP, one of the authors, Paul Kurchina, serves as the Director of Communities on the ASUG board. Paul is an influential voice on eSOA adoption within the SAP ecosystem, and in the book, there are SAP-specific references and examples that tie in the lessons of Mashup Corporations to ERP environments.
In this article, I'm going to highlight a few of the most important lessons from Mashup Corporations, examined through an ERP mindset, where innovation has to be balanced by stability and security in the high-volume ERP core.
Each chapter in Mashup Corporations tells the next step in the story of Vorpal Corporation, with practical tips at the end of each chapter in the "Putting the Rules to Work" section. The story of Vorpal begins with a tale of "disruptive innovation." Hugo Wonderkind, an upstart Marketing Manager, has developed a "mashup" on his own blog that has opened up a whole new market for Vorpal: selling customized Vorpal popcorn poppers to fraternities which features their school's logos emblazoned on the side of the poppers.
From the beginning, CEO Jane Moneymaker can sense the opportunities created by this new Web 2.0 inspired target market. Properly leveraged, this could be a whole new customer base for Vorpal's products. Eventually, this repackaging of team-specific "sports poppers" will lead Vorpal to a licensing deal with the NFL. But along the way, many organizational obstacles must be overcome. Hugo's initial blog-driven "mashup" is not secure enough, or scaleable enough, to be easily utilized on a corporate level.
So, there are numerous technical and cultural challenges involved here, and the narrative of Mashup Corporations takes us through Vorpal's journey towards SOA effectiveness. But of course there is a bigger issue to consider: if this SOA-driven project opens up a whole new market, how does a company encourage this kind of innovation on a broader level within their organization?
And how can this all be tied into the existing ERP technical environment and meet all the requirements for security and regulatory compliance? Creating a culture of innovation is not as easy or slick as it sounds. Jane Moneymaker is determined to get Vorpal down that road, but it's not as simple as issuing a pronouncement from on high. She needs a different kind of buy in, and the specifics of how she and her team accomplished this feat are the real takeaways from the book.
Let's take a closer look at some of the SOA tactics brought to life in Mashup Corporations.
1. Harness the Power of "Shadow IT."
"Shadow IT" is the phrase used by the authors of Mashup Corporations to describe a new wired generation of employees who are, in some cases, better versed in new Web 2.0 technologies and platforms than the IT department itself. "With every class of graduating students, a more tech-literate labor force emerges," the authors note. "They bring with them new methodologies and models for working that line up directly with service orientation."
So how can this enthusiasm and web savvy be built into the corporate landscape? We have to achieve buy in from both sides: the "Shadow IT" folks need to be pulled into the corporate loop, but the CIO still needs to feel like he or she is steering the ship. The way to do that? Create an evaluative process, managed by the IT leadership, that allows for employees to develop and submit services that are then assessed for business potential and technical feasibility.
The resistance to utilizing Shadow IT may come from more places than the IT. SOA-driven changes upset the apple cart of any department that has a traditional "let's use the older tools we already invested in" mentality towards web-based projects. The authors of Mashup Corporations point out that the cost of ignoring Shadow IT is high: "Failure to embrace and support Shadow IT in the long run means wasted resources, an inability to maximize the value of your company's collective candlepower, and lost opportunities."
2. Don't Wait to Do a Big SAP Upgrade - Build a Service Now.
Mashup Corporations features many lively discussions between leaders with different agendas when it comes to maximizing SOA. One revealing exchange involves the CIO of Vorpal, Dave Lovecraft, who at one point suggests holding off on building any services until the full SAP ERP 2005 upgrade is complete (we could substitute "ERP 6.0" as of this writing). Since this release is fully service-enabled, Lovecraft argues that it makes logical sense to hold off on SOA projects for a few quarters until this upgrade is complete.
The authors' response? Don't wait! Implement a service now that can support a key business driver, and start building some bottom line momentum for the SOA projects of the future. In Mashup Corporations, our impatient CEO, Jane Moneymaker, doesn't want to wait on the ERP upgrade to move ahead with SOA, primarily because by this point in the book, customer demand for the service-driven custom poppers has been established, and she doesn't want to lose the interest of this new market.
In a moment of frustration, Moneymaker declares her intention to push ahead with services projects before the next ERP upgrade: "We need to get these services to people who need them and let our infrastructure play catch up. I don't believe that the costs we'll save will ever outweigh the opportunity cost of waiting six months - I think the negative impact of the delay is incalculable. How many times do I have to fight this battle?" vents Moneymaker. She continues: "I'm not opposed to the upgrade - I understand why we need it, and why it will be worth it - but improving our system doesn't get the highest value stuff in the hands of our people or our customers."
As the book continues, the leadership team gets on the same page and Hugo's service is officially moved from his blog to inside the corporate firewall. This does not mean Mashup Corporations advocates a kind of organizational anarchy where services are created across the company without central management or governance. But the best way to start the path towards SOA is through a clear win that connects your company to customers or suppliers in new, value-added ways. The rest you can solve as your profit margin increases.
3. Cultivate "Disruptive Innovation" Along the Edges of Your Company.
One of the most useful aspects of Mashup Corporations is its recommendations for how to utilize "disruptive innovation." SAPtips readers have probably noticed that SAP has been emphasizing this hip phrase in recent conference keynotes. More than one NetWeaver product manager personally told me that they envision the specific role of "disruptive innovator" to become a standard part of SAP project teams. But the response from SAP customers is more hesitant. As one Basis manager told me, "I don't want a disruptive innovator on my project team."
There is obviously a disconnect here, but it's a disconnect that a close reading of Mashup Corporations can fix. The resistance to disruptive innovation comes from several angles. One is the image of someone acting in a cavalier manner without guidance from management. Another is the idea of disrupting core business processes that need to be stable and secure because they handle such a high transaction volume. Disrupting those kinds of transactions is a CIO's worst nightmare.
But the kind of disruptive innovation advocated in Mashup Corporations is neither of these things. The authors present a methodology that will cultivate innovation by supporting "Edge IT." Edge IT is all about putting SOA and Web 2.0 tools in the hands of those employees who are directly connected to the areas where such innovation will have an immediate ROI impact. We could call these "customer-facing" positions, though enhancing supplier relationships is just as valuable. Either way, providing those in "outward-facing" roles with their own SOA building blocks is the key to harnessing Edge IT.
The "Edge" of IT also includes those who are not formally a part of an organization but who are still stakeholders with a vested interest in improving processes, such as high volume customers. "There's untapped value in using an SOA to extend IT to the edges of your organization and beyond," write the authors, "even to your customers themselves - if there's an opportunity to involve them in activities that create value for both sides."
The lesson of Mashup Corporations is that if you encourage this kind of innovation "along the edges" and provide the people in those roles with re-usable services, Web 2.0 tools, and other SOA tools, they will come up with revenue-producing ideas that go outside the box but still fit into the overall business strategy. Vorpal's custom-branded poppers, which started out as a modest service for the "Delta Rho Upsilon" fraternity, but eventually became a significant new business channel, are one such example.
I liked how the authors explained the collaborative power of this kind of innovation, and how the involvement of outside parties, in this case fraternity members, contributed to the organization's collective business smarts. "Collaborating and working with your ecosystem of fellow travelers is a new corporate competence. As the young men of Delta Rho Upsilon prove, when it comes to discovering new market opportunities and galvanizing product opportunities, the more brains the better... Your company may know its existing customers well, but how can it possibly know all of its potential customers? Exposing a service offers opportunities to outsiders - including your customers - to impact and extend your business and theirs."
4. Promote a Culture of Communication.
When you look at the cultural changes advocated by Mashup Corporations, the common theme is communication - but not just across the boardroom table. Indeed, the market potential of the custom popper would not have been realized if a mid-level marketing person had not felt comfortable running his idea up the food chain.
It's common knowledge that poor communication channels have a negative impact on morale. But now the stakes are even higher. As the authors point out, if you can't pull your employees into the SOA conversation and leverage their use of Web 2.0 technologies, huge potential assets will never be developed. "The good news is that many of your employees have already created their own tools," they write. "The bad news is that they are hiding them from you."
The cultural changes required to foster an SOA-friendly environment and to lure out these new ideas are not simple. The authors acknowledge that their portrayal of Vorpal, is an exceptionally smooth version of the SOA transition process. In every company, there will be political challenges posed by these projects that need to be anticipated and addressed - head on.
Perhaps we can tackle more of these change management themes in future editions of this column. But the lesson of Mashup Corporations is clear: SOA is not just a "nice to have." It's a key to competitive advantage, and it's better to start down the road to SOA now than to chase your competition from behind.
The good news? The authors have found that once you start building services and pulling people in from the ERP project team to support processes that span departments, everything starts to click, and "the overwhelming logic of redesigning applications around business process flows gradually breaks down resistance."
Conclusion - So Where Do You Start?
In this early stage of SOA adoption, it's apropos to conclude our article with "where do you begin?" We already talked about starting with a service that provides a bottom line value and helps to build momentum for heavier SOA investments.
In terms of choosing that service, I'm going to leave the last word to SAP itself. During its "Best Practices in eSOA: Customer Insights and Experiences" presentation at SAPPHIRE 2007, SAP's Christian Hastedt-Marckwardt and Rudolf Hois used a series of customer case studies to emphasize a key point: your first SOA project should center around one important business driver. Examples of business drivers in SAP's presentation ranged from bringing acquisitions online faster (Valero) to cost reduction and cash flow improvement (GiSA), from customer-centricity (Standard Bank) to managing growth and value chain collaboration (Profine). (This presentation can be viewed online in the "Community" section of SAP.com - select
online events >SAPPHIRE ‘07.)
So when it comes to SOA, there are plenty of places to begin. But if Mashup Corporations is any indication, the starting point may well come from an excited employee who bursts into the office to show off a widget on his or her blog that is too cool to keep to themselves. The first response may be to laugh. The second response might be to take some careful notes. Business is changing, but listening to your constituents remains a constant.
---
We'd like to thank Mashup Corporation authors Paul Kurchina and Dan Woods for reviewing this article and providing their input. For more details on Mashup Corporations, including ordering information, go to MashupCorporations.com. All the profits from Mashup Corporations are donated to charity.
Site Editor’s Note: This article was originally published in a modified version in the August/September 2007 edition of SAPtips. SAPtips is a subscription-based publication, but you can obtain a free sample issue from the SAPtips web site, as well as information on all previously published articles.
SAPtips Bio: Jon Reed, JonERP.com. Jon Reed is an independent SAP analyst who writes on SAP consulting trends. He is the President of JonERP.com, an interactive Web site which features Jon’s SAP Career Blog and his podcasts for SAP professionals. Jon has been publishing SAP career and market analysis for more than a decade, and he serves as the career expert for SearchSAP.com's "Ask the Expert" panel. From 2003 to 2006, Jon was the Managing Editor of SAPtips.
Jon Reed was recently named an SAP Mentor. The SAP Mentor Initiative is a highly selective program which recognizes those individuals who are making an outstanding contribution to the SAP community. Jon is one of 70 mentors who are playing an active role in SAP's online ecosystem, which includes the combined 1.3 million members of the SDN and BPX web sites.
|
Jon has now created a section on JonERP.com for his post-TechEd podcasts and analysis. You can now view his BPX skills webcast replay with ASUG also!
