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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
SAP AG 2002, 1_Netweaver.ppt, Rolf Schumann 3
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
SAP AG 2002, 1_Netweaver.ppt, Rolf Schumann 4
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
SAP AG 2002, 1_Netweaver.ppt, Rolf Schumann 5
CORE & CONTEXT
Business Process Innovation
SAP AG 2002, 1_Netweaver.ppt, Rolf Schumann 6
Minutes
Hours
Weeks
Months
1960s 1990s 2000s1940s1920s1900s 1980s
Days
Years
Processexecutiontime
BusinessProcessChange
ProductLifecycle
The Next Frontier: Reducing “Time to Change”
Source: Gartner
SAP AG 2002, 1_Netweaver.ppt, Rolf Schumann 7
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
SAP AG 2002, 1_Netweaver.ppt, Rolf Schumann 8
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
SAP AG 2002, 1_Netweaver.ppt, Rolf Schumann 9
INNOVATION MEANS CHANGE
SAP NetWeaver™ – Enabler of change
SAP AG 2002, 1_Netweaver.ppt, Rolf Schumann 10
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
SAP AG 2002, 1_Netweaver.ppt, Rolf Schumann 11
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
SAP AG 2002, 1_Netweaver.ppt, Rolf Schumann 12
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?
SAP AG 2002, 1_Netweaver.ppt, Rolf Schumann 13
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
SAP AG 2002, 1_Netweaver.ppt, Rolf Schumann 14
ARCHITECT FOR INNOVATION
Enterprise Services Architecture
SAP AG 2002, 1_Netweaver.ppt, Rolf Schumann 15
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
SAP AG 2002, 1_Netweaver.ppt, Rolf Schumann 16
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
SAP AG 2002, 1_Netweaver.ppt, Rolf Schumann 17
DIFFERENTIATION mySAPPOWERED BYNETWEAVER
Business Process lifecycle: Hitech Example
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
REINVENTING PLANNING AND MANUFACTURING PROCESS
SAP AG 2002, 1_Netweaver.ppt, Rolf Schumann 18
ERPERP
CR
MC
RM
PLMPLM
SRM
SRM
SCM
SCM
PRODUCTIVITYDIFFERENTIATION
Business Process lifecycle: Hitech Example
REUSE PROCESS STEPS AND ENTERPRISE SERVICES IN
CUSTOM PROCESSES
SAP NetWeaver
ENTERPRISESERVICES
SAP NetWeaver
Plan Manuf.
Auction
Source
REINVENTING PLANNING AND MANUFACTURING PROCESS
Procure
AvailabilityAvailability--toto--SaleSale
P2PP2P
O2CO2C
M2iM2i
EnterpriseServices
Repository
SAP AG 2002, 1_Netweaver.ppt, Rolf Schumann 19
• Model-based• Event-driven• Service-oriented
xApp Cost & Quotation Management
mySAP Adaptive Manufacturing
New Generation SAP Solutions
SAP AG 2002, 1_Netweaver.ppt, Rolf Schumann 20
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
SAP AG 2002, 1_Netweaver.ppt, Rolf Schumann 21
SUSTAINABLE INNOVATION
SAP NetWeaver at work
SAP AG 2002, 1_Netweaver.ppt, Rolf Schumann 22
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
SAP AG 2002, 1_Netweaver.ppt, Rolf Schumann 23
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
SAP AG 2002, 1_Netweaver.ppt, Rolf Schumann 24
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
Total cost ofownership =
Cost of integrating applications and platforms
SAP AG 2002, 1_Netweaver.ppt, Rolf Schumann 25
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
Total cost ofownership =
REDUCED cost of integrating apps and platforms
SAP AG 2002, 1_Netweaver.ppt, Rolf Schumann 26
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
$
SAP AG 2002, 1_Netweaver.ppt, Rolf Schumann 27
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
SAP AG 2002, 1_Netweaver.ppt, Rolf Schumann 28
THE VALUE DELIVERED WITH SAP NETWEAVER
TCO REDUCTION BY INTEGRATION
INNOVATION BY FLEXIBILITY
Diff
entia
tion
-CO
RE
Prod
uctiv
ity-C
ONT
EXT
SAP AG 2002, 1_Netweaver.ppt, Rolf Schumann 29
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
SAP AG 2002, 1_Netweaver.ppt, Rolf Schumann 30
HOW TO GET THERE?
Start your ESA Roadmaps today
SAP AG 2002, 1_Netweaver.ppt, Rolf Schumann 31
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 AG 2002, 1_Netweaver.ppt, Rolf Schumann 32
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
APPLICATION PLATFORM
Life
Cyc
le M
gmt
PROCESS INTEGRATIONPROCESS INTEGRATION
INFORMATION INTEGRATION
PEOPLE INTEGRATION
SAP NetWeaver™
APPLICATION PLATFORM
Com
posi
te A
ppli
catio
n F
ram
ew
ork
PEOPLE INTEGRATION
INFORMATION INTEGRATION
PROCESS INTEGRATION
Integration Broker
BusinessProcess Mgmt
APPLICATION PLATFORM
Life
Cyc
le M
gmt
PROCESS INTEGRATIONPROCESS INTEGRATION
INFORMATION INTEGRATION
PEOPLE INTEGRATION
SAP NetWeaver™
APPLICATION PLATFORMCom
posi
te A
pplic
atio
n F
ram
ew
ork
PEOPLE INTEGRATION
INFORMATION INTEGRATION
PROCESS INTEGRATION
Integration Broker
BusinessProcess Mgmt
APPLICATION PLATFORM
Life
Cyc
le M
gm
t
PROCESS INTEGRATIONPROCESS INTEGRATION
INFORMATION INTEGRATION
PEOPLE INTEGRATION
SAP AG 2002, 1_Netweaver.ppt, Rolf Schumann 33
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
SAP AG 2002, 1_Netweaver.ppt, Rolf Schumann 34
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)
SAP AG 2002, 1_Netweaver.ppt, Rolf Schumann 35
The ESA Adoption Program
SAP AG 2002, 1_Netweaver.ppt, Rolf Schumann 36
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
SAP AG 2002, 1_Netweaver.ppt, Rolf Schumann 37
SUMMARY
Time to change
SAP AG 2002, 1_Netweaver.ppt, Rolf Schumann 38
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
SAP AG 2002, 1_Netweaver.ppt, Rolf Schumann 39
sdn.sap.comMORE INFORMATION
SAP DEVELOPER NETWORK
SAP AG 2002, 1_Netweaver.ppt, Rolf Schumann 40