www.wipro.com

SOA Value Realization – Fact or Fiction?

Hitarshi Buch & Varun Mathur Architecture & Consulting Group, Connected Enterprise Services, Wipro Technologies

ABSTRACT Adoption of Service Oriented Architecture (SOA) caught

paper will provide insights into the future initiatives planned

momentum several years ago in the IT industry. With

by these organizations in the integration space such as

organizations

multi-channel enablement, extended enterprise and process

increasingly

investing

in

technology,

governance process and delivery aspects of SOA, the overall

integration.

maturity levels have increased. But has the same resulted in

Based on the existing trends & pain-points, as well as the

proportionate gains and benefits for the organizations?

SOA maturity levels, a set of recommendations and best

This paper analyzes the current trends and practices of

practices are provided to achieve the NextGen SOA / SOA

various organizations, across industry domains in the SOA &

2.0. This includes scenario-based problem statement and

Integration landscape, and attempts to understand its linkage

possible solutions covering technology, processes and

to value realization as well as challenges encountered. The

delivery aspects of SOA.

KEY FINDINGS  40% of all organizations surveyed fall in the “high SOA

 80% of respondents rate increased reusability and

maturity quadrant” which indicates the effectiveness and

reduction in point-to-point interfaces as the top-ranked

efficiency of their SOA journey

benefits resulting from SOA initiatives

 Organizations are twice more likely to realize their

 Widespread interest to use Agile methodology (80-90%)

platform objectives than others in engagements with

but organizations lack the maturity to operationalize it

effective Central Governance and/or Center of

 Adoption of Cloud platforms is uniformly split across

Excellence (CoE)

capabilities like CRM & HCM but iPaaS adoption (< 10%)

 Multi-channel adoption is the top-most ranked future

is minimal

initiative by 60% of the respondents

RECOMMENDATIONS  A 'Pragmatic' integration capability towards multi-channel programs, and a roadmap towards the target state  Governance

2

and

technology

refresh

should

 Delivery automation is an opportunity than can be piloted at small engagements, and matured into an offering

be

 Scope of open source adoption in low complexity

recommended at large engagements fairing low on

engagements which can be combined with delivery

value realization

automation to make an efficient and cost-effective solution

TABLE OF CONTENTS Introduction

5

Current Trends & Practices

6

Platform Capability – Integration Patterns & Monitoring

7

Process Capability – SOA Governance

8

Process Capability – Data Model Adoption

9

Execution Capability – Delivery Model & Accelerators

9

Integration Pain-points

10

Challenges in SOA Journey

10

Value Realization

11

Recommendations

12

Middleware as a factor in Omni-Channel/E-Commerce programs

12

Opportunity for Delivery Industrialization

16

Governance as a Factor in Delivering Integration Goals

17

Case for Open Source Middleware Adoption

18

Methodology

18

About the Authors

19

3

TABLE OF FIGURES Figure 1: SOA Investment – Value Realization Trends

5

Figure 2: SOA Capabilities – Business Domain Heat Map

6

Figure 3: Integration Patterns & Monitoring Trends

7

Figure 4: SOA & Data Governance Adoption Trends

8

Figure 5: Data Model Adoption

9

Figure 6: Delivery Model & Accelerators Usage Trends

9

Figure 7: Integration Pain-points

10

Figure 8: Challenges in SOA Journey

10

Figure 9: SOA Tenets & Value Realization

11

Figure 10: Overall Value Realization Trends

11

Figure 11: Middleware & Omni-channel Adoption

12

Figure 12: Target Integration Architecture for Omni-Channel Oriented Programs

14

Figure 13: Delivery Accelerator Adoption Trends

16

Figure 14: SOA Governance Trends

17

4

INTRODUCTION While some organizations have chosen to focus on traditional Enterprise Application Integration (EAI) in the last decade or so, most of them have increasingly adopted SOA. It is predicted that organization’s spending on application integration will increase by 33% by year 2016*. Companies across industry domains are at different maturity levels and have achieved varied degree of success in adopting and implementing SOA. Whether this has resulted in proportionate benefits has always been an interesting conundrum. Figure 1 answers this by depicting a relation between the SOA investments made and benefits obtained. 8 7 High Maturity Cluster

6

BFSI ENU Telecom Healthcare Manufacturing Retail Linear (BFSI) Linear (Telecom) Linear (Healthcare) Linear (Manufacturing) Linear (Retail)

Value Realization

5 4 3 2 1 0

0

1

2

3

4

5

6

7

8

9

-1 SOA Investment Figure 1: SOA Investment – Value Realization Trends This survey was conducted on Wipro’s 40 key integration accounts across business domains. SOA investment was determined based on the level of maturity observed in the following foundational capabilities: • Technology capabilities describes the integration middleware platform, patterns, monitoring as well as Cloud Integration and open source adoption in the SOA landscape (Weightage: 5) • Process capabilities describe the SOA Governance structure and processes operationalized to ensure that integration projects follow standards and best practices

(Weightage: 10). Higher weightage is provided as this is perceived as a key differentiator in SOA engagements • Delivery capabilities describes the development model and accelerators used for successful execution of integration projects (Weightage: 5) The observed integration capabilities were then linked to the reported realized benefits to plot the graph above (Figure 1). The realized benefits are detailed in the section for ‘Value Realization’. This maturity analysis will form the basis of the inferences and recommendations in the subsequent sections of this paper.

* Gartner - 2013 Strategic Road Map for Integration 5

Key Observations • 40% of the organizations fall in the “high maturity quadrant” and their success rate is found to be proportional to the platform, governance, and delivery capabilities that were adopted/enhanced • Organizations in BFSI and Retail business domains consistently depicted higher levels of SOA maturity majorly because they embarked early on the SOA journey • Accounts considered for Energy & Utilities (ENU) domain are in nascent stage of SOA adoption and hence have not realized the benefits yet

CURRENT TRENDS & PRACTICES Current state of customers in the integration landscape was ascertained by capturing attributes related to Technology, Process & Delivery capabilities (Existing & Planned) as depicted in the Heat Map in Figure 2: Capability / Business Domain Heat map

Technology

Process

Energy & Utilities

BFSI

Telecom

Healthcare

Manufacturing

Retail

Services in ESB

93.33%

20.00%

46.67%

63.33%

93.33%

20.00%

45.00%

0.00%

60.00%

0.00%

80.00%

32.50%

Platform Capability

54.76%

20.48%

35.71%

21.90%

38.10%

36.19%

46.43%

29.29%

38.10%

51.43%

44.64%

13.57%

Monitoring Capability

52.78%

30.36%

38.89%

26.19%

33.33%

61.90%

50.00%

0.00%

33.33%

28.57%

45.83%

33.04%

Cloud Integration

10.42%

29.76%

20.83%

13.10%

0.00%

0.00%

37.50%

25.00%

33.33%

33.33%

21.88%

12.50%

Open Source Adoption

10.00%

TBD

6.67%

TBD

6.67%

TBD

5.00%

TBD

0.00%

TBD

2.50%

TBD

Design-time Governance

44.44%

17.38%

27.78%

33.33%

33.33%

24.76%

33.33%

17.14%

55.56%

40.95%

58.33%

39.64%

Service Re-use as a structured process

75.00%

16.67%

8.33%

33.33%

66.67%

0.00%

75.00%

25.00%

50.00%

16.67%

68.75%

6.25%

Data Governance

63.66%

TBD

62.50%

TBD

41.67%

TBD

59.03%

TBD

22.22%

TBD

70.83%

TBD

Governance Tools Usage

47.22%

28.65%

16.67%

32.29%

22.22%

50.00%

8.33%

21.88%

22.22%

54.17%

33.33%

40.63%

Deliver Model Maturity

36.11%

6.67%

45.56%

16.67%

31.11%

0.00%

13.33%

5.00%

53.33%

60.00%

33.33%

32.50%

Delivery Accelerators Usage

40.00%

25.00%

50.00%

35.19%

26.67%

18.52%

60.00%

27.78%

46.67%

33.33%

42.50%

13.89%

Delivery

Figure 2: SOA Capabilities – Business Domain Heat Map Key observations: • Adoption for Cloud platforms is uniformly split across capabilities like CRM & HCM so far, but iPaaS adoption (< 10%) is not yet a reality • Multi-channel adoption is a key business driver across business domains such as Banking/Healthcare/Retail and a top-ranked future initiative across the respondents. Roadblocks have been observed when this is not matched by integration agility • Need for 'pragmatic' integration capability tuned towards multi-channel programs, and a realistic roadmap to grow it • Organizations with security and regulatory considerations (such as BFSI) are still reluctant to invest in Open source products (< 10%) in their integration landscape • Increased reusability & reduction in point-to-point interfaces (approx. 80%) are the top-ranked benefits resulting from SOA initiatives across business domains 6

• Distinct co-relation has been observed between effective service portfolio management & governance with the value realization achieved • Canonical model adoption is high (> 60%) in most of the business units which indicates increased focus on standardization and interoperability • Lack of successful adoption of Agile methodology has been observed which has resulted in 60% of the accounts relying on the Waterfall/Iterative model • Delivery accelerators such as automated deployment and on-demand testing capabilities rank highest in customer’s wishlist In addition to the summarized view, subsequent sections will highlight comparison between high maturity & other (low/medium maturity) customers.

Platform Capability – Integration Patterns & Monitoring Customers with High SOA Maturity

Customers with Low SOA Maturity

83.33% 71.30%

68.70%

68.33% 60.87%

58.33% 46.09%

47.22%

38.33% 26.67% 27.83%

Point-to-point Interactions

24.64%

Process Integration Services Exposed File-based Transfer ETL Workflows Interface Monitoring (eg., BPEL) in ESB

Figure 3: Integration Patterns & Monitoring Trends • Even though “SOA services in ESB” pattern usage is high (e.g. > 80% in BFSI & RCTG), usage of point-to-point integrations is widespread (ranked 3rd highest by respondents)

• Interface monitoring is in place but lack of run-time governance to measure the success of SOA and perform optimization for better returns was observed

• Low usage of Process Integration (< 30%) cannot be attributed entirely to maturity and its adoption is dependent on the domain-specific requirements

7

Process Capability – SOA Governance Customers with Low SOA Maturity

Customers with High SOA Maturity 83.33%

83.33%

75.00% 66.67% 60.87% 47.83%

45.65%

39.13% 33.33%

30.43%

27.54%

8.33%

Common Enterprise-wide CoE-driven Governance Body Project Delivery

Service Modeling Methodology

Service Reuse as a Process

Canonical Model Adoption

Governance Tools Adoption

Figure 4: SOA & Data Governance Adoption Trends • Design-time governance has been adapted to high degree and proportionate service reuse has also been achieved

• Service modeling methodology has not gained traction and has minimal impact on overall benefits

• Service re-use as a process is prevalent with majority of organizations for both business and technology services • Common data model is a key enabler and has been adopted (83% for high maturity; 60% for others) across rganizations. Refer to split of overall data model usage patterns in Figure 5

• Several respondents reported that the central Governance body is similar to Enterprise Archit ecture group

• CoE-driven delivery of integration projects (75% for high maturity organizations) has been observed as the more effective and efficient means of obtaining high value realization

8

• Governance tooling adoption has been moderate with 32% usage of SOA Registry & Repository, while others are using tools like SharePoint or custom applications to manage the service catalog

Process Capability – Data Model Adoption Data Model Usage, by % respondents 0

10

20

30

40

50

60

70

80

Application-based data formats are used Application agnostic data models are used A mix of application-specfic & agnostic data structures are used An industry data model is used

Integration & Information data models are synchronized Customers with Low SOA Maturity

Customers with HIgh SOA Maturity

Figure 5: Data Model Adoption * The figures may not add up to 100% due to usage of multiple data-model approaches for a given respondent

Execution Capability – Delivery Model & Accelerators Customers with Low SOA Maturity Testing Automation

Customers with High SOA Maturity

8.70% 8.33%

Regression Test Suites

34.78%

Automated Deployment

50.00% 52.17%

83.33% 73.91%

Common Utilities and Frameworks Waterfall Model Usage

60.87% 58.33%

Agile Model Usage

60.87%

91.67%

108.33%

Figure 6: Delivery Model & Accelerators Usage Trends • Widespread interest to use Agile methodology (> 90%) but organizations lack the maturity to operationalize it and gain any significant benefits out of it

• Continuous integration aspects such as automated deployment and testing are key contributors to efficient delivery and cost reduction

9

Integration Pain-points Fragmented Platforms Platform Stability & Scalability

32

47

Proliferation of Interfaces with Duplicated Functionality

46

30

Long Delivery Cycles

12

Code Quality

35

Integrations with Legacy Platforms

62

Supporting Multiple Channels

35

Availability of Real-time Information Response Times & Throughput

64 59

Process Integration

23

Point-to-point Interfaces

Figure 7: Integration Pain-points • Interface proliferation and long delivery cycles are inter-related pain-points, mentioned by 60% of respondents, which indicates lack of SOA Governance

• 56% respondents have marked legacy integration as a major challenge which indicates that legacy modernization initiatives and cloud adoption needs to be explored

Challenges in SOA Journey Customers with High SOA Maturity

Customers with Low SOA Maturity

63.48% 46.96% 40.00% 31.67%

Integration projects are driven by LoBs hence no focus-shared service model

33.33%

38.26% 26.67%

32.17%

26.67%

32.17%

Lack of ownership Difficulty in onboarding Lack of skilled resources Governance body lacks sufficient power to from Business and/or business users for to implement the SOA charter enforce standards Enterprise Architecture adopting SOA when and best practices initiated bottom-up by IT

Figure 8: Challenges in SOA Journey • Emphasis on a Shared Service Model, instead of Line of Business (LoB) driven integration, is a key success factor • SOA Governance body in conjunction with CoE-enforced best practices is required for achieving true service orientation 10

• Ownership and funding model from business stakeholders is a key characteristic of successful SOA initiative

VALUE REALIZATION As was depicted in Figure 1, the benefits obtained from SOA are proportionate to the investments done. Another aspect of value realization is the degree to which the fundamental tenets of SOA are fulfilled. Customers with High SOA Maturity

Customers with Low SOA Maturity 95.83%

94.44%

61.11% 52.08%

45.65% 34.78% 21.74%

15.22% Agility

Cost Reduction

Reuse

Interoperability

Figure 9: SOA Tenets & Value Realization • Agility is a combination of responses indicating improved delivery times, increase in frequency of B2B transactions, multi-channel enablement and BPM rollout/Process integration achieved • Cost Reduction has been derived from responses indicating reduction in point-to-point interfaces, delivery efficiency and reduction in cost of developing and maintaining interfaces • Reuse is derived as a factor of reusability of business/technical services & the resultant cost efficiency, as per the respondents Customers with High SOA Maturity Enterprise BPM Rollout/Process Integration

• Interoperability is combination of responses indicating increase in coverage of B2B transactions, multi-channel enablement and ease of integration with legacy systems within the enterprise Organizations in high maturity quadrant have performed significantly better in all aspects which are vindicated by overall value realization trends created by capturing responses across customer accounts.

Customers with Low SOA Maturity 4.35%

25.00%

Increased Interoperability with Legacy Systems Multi-channel/Mobile rollout

8.70%

33.33%

Increased in reusability of Business/Technical Services

56.52%

Reduction in cost of developing and maintaining interfaces Increase in frequency and/or volume of B2B transactions Improvement in delivery times Reduction in point-to-point interactions

91.67%

34.78%

100.00% 91.67%

34.78% 58.33%

21.74%

91.67%

26.09% 43.48%

100.00%

Figure 10: Overall Value Realization Trends 11

RECOMMENDATIONS Given below are key recommendations and best practices which have been derived from the current trends and initiatives as well its impact on the value realization.

Middleware as a factor in Omni-Channel/E-Commerce programs 57% of respondents who reported existing or planned omni-channel programs are posing new capability challenges for middleware platforms. The respondents were queried whether the middleware platform has acted as an enabler for these programs to which close to 25% respondents said the middleware is a

pain-point for such programs, to an extent that middleware refactoring programs are required as part of the overall omni-channel program. Around 15% responded that middleware has been an enabler for omni-channel adoption. The results of the investigation into middleware capabilities of these respondents are below:

Middleware capabilities enabling Omni-channel Adoption, by % respondents Middleware cited as a constraint

Middleware cited as an enabler 45.45

Accounts using canonical data models

100

Accounts where SOA services rank 1 or 2 as the prevalent integration pattern

45.45

Accounts with established centralized governance

45.45

100

83 63.64

Accounts with shared services integration project teams Accounts reporting effective governance mechanisms (compared to the average for the group) Accounts using agile as a delivery method

50 18.18 33 27.27 67

Figure 11: Middleware & Omni-channel Adoption Based on the observations in Figure 11, and studying the middleware refactoring projects cited earlier, following is presented as a “pragmatic” middleware capability refresh plan for omni-channel adoption.

12

Category

Middleware Capability Refresh: Iteration 1 • Finalize a canonical model for channel interaction • Ensure all channels interact via the canonical model • Govern interaction patterns usage

Governance

Middleware Capability Refresh: Iteration 2 • Catalog existing/planned cross-channel interactions • Enforce centralized governance – typically constituted with key program architects • Setup formal integration technology and process governance • Query services are prone to variations across projects & devices, and should only be subjected to pattern governance • Update services, in contrast, need harmonization across geos and products via effective governance

• Catalog cross-channel interaction • Secure edge traffic via gateway products

• Add caching preferably via distributed caches • Surface master data, catalogs, campaigns, customer/account data to the cache from SORs/MDM-Hubs in the canonical format • Support device dependent ad-hoc entity querying via the cache • Update services typically need a robust orchestration/BPM engine

Technology

• Add monitoring & policy enforcement to the edge gateway

• Align to the wider omni-channel projects, which typically run agile

• Consolidate Integration projects as a shared service – run as agile if supported by previous success

Delivery

13

Figure 12 represents the learnings from leading organizations pursuing multi-channel programs and refactoring the integration tier to support it. This is an architectural view of the key components in a target state multi-channel solution:

CHANNELS & DEVICES

Query APIs

Enterprise XML/API Gateway

Enterprise Cache

Analytics & Rules

Update APIs

BPM

Data Virtualization Layer

Social Connectors

Data Query Services

Content Engine

Business Services

Partnered Content

Orchestration Services

ESB

Data Hubs (MDM)

Figure 12: Target Integration Architecture for Omni-Channel Oriented Programs

14

SaaS/PaaS/In-Prem Apps

Category

Query Services & APIs

• Enterprise/MDM data is exposed off ESB or via direct application APIs • Social/External data is stored in NoSQL/SQL tables, grids or accessed in real-time

Architectural Elements

Update/Long Running Services & APIs

• Services are mapped to enterprise capability models • Realized via BPM & ESB orchestrations • Provide harmonized entity change behaviors across LoBs • Supported by composable & atomic ESB services

• An aggregated view of the entity is represented in the data virtualization layer. This can selectively be cached • Channel APIs are ad-hoc & query virtualized data - can be channel specific • Real-time analytics provide content suggestions by matching entity data to context

• Key enterprise entities are modelled formally, and governed on the data virtualization layer

Governance

• Typically, the traditional enterprise SOA Governance is apt here. • Alignment of Information & Integration Governance is recommended

• Rest of the entities and layers are governed for exceptions

15

Opportunity for Delivery Industrialization 40% respondents have cited addressing costs as an urgent IT & middleware goal. A similar number mentioned long middleware delivery cycles as a pain area. This perception is more pronounced in high maturity organizations, with 64% respondents citing these reasons. As this trend is only likely to accelerate, the current state of delivery automation across respondents were captured.

Delivery Accelerator Adoption, % respondents

4% 3%

21%

40%

Common Auditing/Logging/Exception handling Automated Project Deployment Regression test suites & automation Continuous Integration End-to-end model-driven approach

32%

Figure 13: Delivery Accelerator Adoption Trends Based on these observations, a middleware industrialization offering can be created with open-source tools covering: • Test-oriented development via Continuous Integration – effectively collapse the build, unit and system test phases • Regression & Performance Test automation – increase reliability of the iterative multi-channel delivery process

16

• Delivery process modelling via a workflow Such an offering can be co-developed with a stable engagement with a small middleware footprint. The resultant framework can subsequently be leveraged in solutions offered to prospective customers.

Governance as a Factor in Delivering Integration Goals The survey compared the adoption and results of integration governance, from respondents reporting higher value realization from the platform and overall maturity (Figure 14: SOA Governance Trends) Integration (Anti) Pattern Trends, by % respondents Customers with Low SOA Maturity Existence of centralized integration governance

Customers with High SOA Maturity 39.13

66.67 47.83

Existence of shared services integration project teams

75.00 56.52

Canonical Model Adoption LoBs dominate projects & funding

86.96

66.67

Governance lacks sufficient enforcement capability

58.33

73.91

52.17 50.00

Lack of Business/EA ownership

60.87

Lack of SoA skills Proliferation of interfaces with duplicated functionality

83.33

33.33

75.00

43.48

Figure 14: SOA Governance Trends

There is a demonstrated linkage between adoption of effective centralized governance & shared services CoE setups, and value realization from middleware i.e. agility, cost reduction, reuse & interoperability (high maturity is defined with a strong linkage to value realization). The existence of governance does not, by itself, change the challenges faced by foundational platforms like middleware – LoB-oriented project structures and focus or lack of Enterprise Architecture (EA) / business sponsorship. However, effective governance establishes the requisite balance between LoB / delivery orientation and the shared-service aspects of the middleware platform. 1. 65% of the middleware organizations (< 10-15 member teams) achieve higher maturity with stable, shared services teams without a specialized integration governance structure. The survey further recommends that periodic reference architecture and best-practice reviews should be conducted to allow for course corrections.

2. For handling integration complexity in the front (channels) or back (enterprise applications), canonical model usage is a clear differentiator between high and low maturity organizations (80% v/s 30% adoption). The leader organizations are driving canonical usage for all new initiatives in channels and back-end systems as well. 3. All run-time monitoring & enforcement capability reported to us was directly linked to non-functional business requirements, and were not tied to collecting SOA metrics or planning. Overall, 70% respondents said they possess monitoring/alerting capability, 10% have or will plan end-to-end transaction monitoring, and 45% have policy enforcement enabled/planned.

17

Case for Open Source Middleware Adoption There is overall 17% adoption for open-sourced ESBs and messaging, and at the moment confined to non-critical functionality. Most early adopters are typically large organizations (90%) piloting the capabilities. However, there is a significant cluster of smaller organizations (50% of non-BFSI organizations outside the

‘high maturity’ quadrant in the survey were classified as ‘small’), that can be targeted for open source adoption. The most important drivers are likely to be cost efficiency and relative ease of the migration. This can be more compelling when clubbed with the recommendation for delivery process automation described earlier.

METHODOLOGY The survey was completed via interviews with Wipro Integration & Enterprise Architects assigned to 40 client organizations across business units. The possibility of introduction of a perception bias in the report was mitigated by gathering view-points from different respondents from each organization. The respondent split by domain is: • BFSI – 33% • ENU – 17% • Telecom – 8%

18

• Healthcare – 11% • Manufacturing - 8% • Retail – 23%

ABOUT THE AUTHORS Hitarshi Meenketu Buch Hitarshi has over 14 years of IT experience in architecture, design and implementation using SOA, BPM and Java/J2EE technologies. He has experience in IT transformation & modernization initiatives and has provided enterprise-wide SOA-based solutions. Hitarshi is currently working as a Senior SOA Architect in Architecture & Consulting Group which is part of Connected Enterprise Services at Wipro Technologies. He can be reached at [email protected]

Varun Mathur Varun has 13 years of IT services & consulting experience in enterprise technologies & integration platforms. He has architected SOA, Integration & BPM projects across business domains. Varun has also helped customers setup technology and delivery processes for their integration & BPM platforms. Varun is currently working as a Senior Architect with Architecture Consulting Group in Connected Enterprise Services at Wipro Technologies. He can be reached at [email protected]

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About Wipro Ltd. Wipro Ltd. (NYSE:WIT) is a leading Information Technology, Consulting and Business Process Services company that delivers solutions to enable its clients do business better. Wipro delivers winning business outcomes through its deep industry experience and a 360 degree view of "Business through Technology" - helping clients create successful and adaptive businesses. A company recognized globally for its comprehensive portfolio of services, a practitioner's approach to delivering innovation, and an organization wide commitment to sustainability, Wipro has a workforce of over 140,000, serving clients in 175+ cities across 6 continents. For more information, please visit www.wipro.com

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