www.idc.com

David Senf and Warren ShiauIDC Canada

October 9, 2003

416.673.2271

The IT Legacy, Web Services, and Your Business Processes

Note: May not be reproduced or used in part or whole without permission from IDC Canada

AgendaAgenda

Continuous IT innovation… What’s the problem?

IT complexity and business processes The IT imperative

How does Web services help? What, why, when, where?

Managing IDs in a Web services context What can be gained?

Standards evolution When is it time to start?

Software Revenues and Computing ErasSoftware Revenues and Computing Eras

1.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4

2.6

1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

ComplexityFragmentation

GlobalSoftware Market

Log Worldwide Software Revenues ($)

Source: IDC Beacon III Software Forecastertm

Individual systems Technology solution Vertical integration

Software suites Business solution Bi-polar approach

Granular apps to solve business process problems

Process solution Alliances,

camps and coalitions

Continuous IT Innovation: What’s the Problem? Physical Fragmentation by PlatformContinuous IT Innovation: What’s the Problem? Physical Fragmentation by Platform

IMSVSAM

DB2IDMS

RDBVMS

OracleUnix

Ingres

SQL ServerWNT

S390VM

OS/2

Browser

Novell

W2K

Mac

WWW

Linux

Continuous IT Innovation: What’s the Problem? Logical Fragmentation by SystemContinuous IT Innovation: What’s the Problem? Logical Fragmentation by System

AgendaAgenda

Continuous IT innovation… What’s the problem?

IT complexity and business processes The IT imperative

How does Web services help? What, why, when, where?

Managing IDs in a Web services context What can be gained?

Standards evolution When is it time to start?

IT Complexity and Business ProcessesIT Complexity and Business Processes

• A Process* is:1. A series of actions, changes, or functions that bring

about a result

2. A series of operations performed in the making or treatment of a product

• What is Business Process Management (BPM)?1. Called process change, process execution, process

evolution, business process – BPM involves the human element of understanding the processes around business.

2. Some popular process methodologies: Reengineering, Knowledge Management, Supply Chain Management, Value Chains, Six Sigma…among others

* Source: American Heritage Dictionary.

IT Complexity and Business Processes: Technology Solutions Around BPMIT Complexity and Business Processes: Technology Solutions Around BPM

• IT has offered many technology solutions to the human challenge of business process management Business Process Automation, Business Process

Management, Business Process Modeling

• Challenge How to provide the changeable human element into

technology In the past, software code was difficult to change in

response to process New efforts with Web services languages, of which there

are many, seek to lessen the difficulty of changing process rules without cutting new software code

IT Complexity and Business ProcessesIT Complexity and Business Processes

• Standards created (BPML/BPMS) as the next step in the management of business processes, working to bridge the gap between technology and the business process

• Many languages and systems are being introduced that may fulfill similar functions as the BPML/BPMS

Business Process Manufacturing resource planning

Enterprise resource planning

Business process management

Platform Mainframe Operating System Web services

Language DL/1 SQL Business process management languages

System HDBMS RDBMS Business process management systems

Source: CSC and IDC 2003

Time

Theoretically

FRAGMENTATION

IT Complexity and Business Processes: Integration and ConsolidationIT Complexity and Business Processes: Integration and Consolidation

To address fragmentation…

Point-to-Point Integration Legacy of historical integration models Heavily project-driven

Enterprise Integration Currently dominated by EAI and integration broker

Application Integration Data, Interface, AND Process integration Additive, NOT exclusive Total platform as infrastructure

IT Complexity and Business Processes: Integration and Consolidation - The Business ContextIT Complexity and Business Processes: Integration and Consolidation - The Business Context

Technically Speaking ... The goal of integration is to achieve the unification of two

or more applications, data sets, or interfaces by connecting elements that were not originally designed to inter-operate.

But From a Business Standpoint it Needs to Do More... The goal of application and enterprise integration is to

conduct business in an flexible, timely and intelligent manner.

The drive to automate for quality, competitiveness, and/or profitability

Beyond connectivity

IT Complexity and Business Processes: Integration and Consolidation – Key Components of the Business Vision

IT Complexity and Business Processes: Integration and Consolidation – Key Components of the Business Vision

• Ensuring that each contact is greeted with appropriate information… Rich CRM system, linked with call centres, web site logins, etc.

• Real-time information exchange with the field CRM; secure wireless infrastructure; procedural information repositories;

effective integration with financial systems, MRP/inventory information…

• Linking to third party business partners Participation in/management of extranets; effective use of web services and

data interchange technologies such as XML and WS/XML extensions

• Capitalizing on the data BI systems linked seamlessly/automatically to internal and external information

sources (again, requires WS/XML technology)

• Seamless integration of new business lines Robust and standard core technology and IT processes, data definitions, etc.

• Cost-effective operations Efficient use of capital resources; effective management/reduction of

maintenance costs

IT Complexity and Business Processes: Integration and Consolidation – The Internal SellIT Complexity and Business Processes: Integration and Consolidation – The Internal Sell

Standardization – reduce management complexity (and cost) in the IT environment by deploying interoperable, uniform technologies at the client and server levels

Manageability – reduce the costs associated with…Managing disparate systems through standardization

and consolidationMaintaining links between applications

Consolidation – aggregate resources into a consistent, manageable architectural framework

Utility – develop the ability to deploy resources flexibly, across consolidated platform resources

AgendaAgenda

Continuous IT innovation… What’s the problem?

IT complexity and business processes The IT imperative

How does Web services help? What, why, when, where?

Managing IDs in a Web services context What can be gained?

Standards evolution When is it time to start?

Investment Priorities• Addressing LOB requirements

for business support• Creating a robust and flexible

infrastructureTiming Priorities

• Delivering incremental, tangible near-term benefit

• Staying focused on long-term system benefit

System Priorities

The CIO’s Delicate BalanceThe CIO’s Delicate Balance

• Development/deployment of new systems

• Maintenance/enhancement of existing systems

Services-Oriented ImpactServices-Oriented Impact

Secure

Leveragability

Adaptable

Flexibility

Agility

“Plug & Play”

People Process

FinancialTechnology

Business IT

Partners/Partners/SuppliersSuppliers

CustomersCustomers

LOBsLOBs

EmployeesEmployees

N=200; D01A. Which of the following do you see as business advantages to using Web Services?Source: IDC Canada, 2002

Business Process Efficiencies Top Business RationaleBusiness Process Efficiencies Top Business Rationale

43.5

62

61.5

70.5

78

82

83

86.5

0 20 40 60 80 100

Enable compliance of industry/regulatory requirement

Free up resources for other projects

Create new revenue opportunities

Provide return on investment

Reduces costs

Address a specific business function

Improve our company's customer service

Drives more efficient business processes

Percentage

N=200; D01B. Which of the following do you see as a technical advantage to using Web Services?Source: IDC Canada, 2002

Augmenting Current Technology Top Tech RationaleAugmenting Current Technology Top Tech Rationale

48.5

65.5

66.5

71

73

78

83

0 20 40 60 80 100

Frees up IT resources

Solve internal application integration issues

Deploy applications faster

Reduces costs

Enables an open, multi-platform enviroment

Solve integration issues with partners, suppliers orcustomers

Augment capabilities of current technology

Percentage

AgendaAgenda

Continuous IT innovation… What’s the problem?

IT complexity and business processes The IT imperative

How does Web services help? What, why, when, where?

Managing IDs in a Web services context What can be gained?

Standards evolution When is it time to start?

Standardized Identity FederationStandardized Identity Federation

Organization A Organization BL

egac

y D

irec

tori

es

RA

CF

, N

DS

, A

CF

2…

LDAP/XML

Leg

acy D

irectories

RA

CF

, ND

S, A

CF

2…

LDAP/XML

Metadirectory Metadirectory

SOAP

WS-SecurityLiberty Alliance

SAML

Attributes/AssertionsAuthentication

Authorization/PoliciesPrivacy Preferences

InternetInternet

Standardized Identity FederationStandardized Identity Federation

Organization A Organization BL

egac

y D

irec

tori

es

RA

CF

, N

DS

, A

CF

2…

LDAP/XML

Leg

acy D

irectories

RA

CF

, ND

S, A

CF

2…

LDAP/XML

Metadirectory Metadirectory

SOAP

WS-SecurityLiberty Alliance

SAML

Attributes/AssertionsAuthentication

Authorization/PoliciesPrivacy Preferences

InternetInternet

Drivers

Process integrationPortalsB2B eCommerceWeb servicesComplianceMobilityM&A

ROI

Reduced complexityLeverage IT investmentsReduced churn costReduced helpdesk costSeamless accessPersonalizationScalable/flexibleHigher security/privacy

AgendaAgenda

Continuous IT innovation… What’s the problem?

IT complexity and business processes The IT imperative

How does Web services help? What, why, when, where?

Managing IDs in a Web services context What can be gained?

Standards evolution When is it time to start?

Web Services Standards/SpecificationsWeb Services Standards/Specifications

Source: Who’s Behind the Standards Behind Web Services? (IDC #28563, December 2002)

BPEL4WS, BPML, Tentative Hold Protocol, WS-Transaction, WS-Coordination

XML Digital Signature, XML Encryption W3C, SAML, WS-Security Oasis, WS-Trust, WS-Federation, Liberty

ebXML, WS-Reliable Messaging Oasis, HTTP-R, WS-Reliability

WSDL W3C, UDDI OASIS, WS-Addressing, WS-Policy, WS-Inspection

SOAP,W3C

XMLW3C

Other servicesand protocols

TCP/IP, HTTP, etc. … IETF

Function:Process,

Management,Transactions

Quality of Service

Description,Discovery,Publication

Messaging

Transport

Intranet

Extranet

Internet

Can’t plan in isolation: