SOA and Web 2.0: Putting It All Together

Case Study: Pacorini

Pacorini is an international company based in Trieste, Italy. It delivers coffee, metals, foods, and general cargo. The company processes these goods for quality control and schedules them to arrive just when they are needed in the customer's supply chain management (SCM) process. A highly regarded company, Pacorini has 22 locations and 550 full-time employees; it comprises several different companies across three continents and 11 countries. As a market leader in the delivery of green coffee, Pacorini has historically maintained its competitive position by offering timely customer service. Although it used advanced technologies and leading SCM software, the company's internal business processes were not integrated. It was a challenge to manage siloed information and to provide consistent customer service in a 24x7 world. Consequently, Pacorini was concerned about its ability to stay ahead of its competition.

Starting with an analysis of its current business processes to define priority tasks and link them using streamlined workflows, Pacorini built a framework of integrated online processes. The company put into place an SOA to construct information retrieval and work processes using repeatable information services customized to fit every task in a consistent manner. The company has implemented an order-enabled portal solution for both internal and external customers. It has also deployed a system-to-system order-management solution with its largest coffee customer in Italy. Pacorini is now in the process of applying the communications standards it developed with its largest customer to nine of its other top ten customers. In the future, it will extend this solution to customers in metals, freight forwarding, and distribution areas. Online ordering will enable the company to automate approximately 30,000 transactions this year, a projected savings equivalent to four full-time employees.

Case Study: BusinessMart AG

A second example of the people entry point is businessMart. businessMart AG was founded in February 2000 and currently employs a workforce of 28. businessMart conceives and realizes electronic marketplaces and e-business systems for commerce, industry, and handicraft in sectors with catalog-based articles. Measurable improvements and savings are achieved with consistent orientation to the sector processes of its customers and to the in-depth integration of the suppliers and customers' computer systems. The broad spectrum of businessMart's services ranges from conception through technology modules, all the way to the founding of independent, market-leading portal-operating companies. businessMart now carries out the ordering processes of more than 60 suppliers with nearly 3,000 customers and more than 25,000 orders per day. businessMart currently operates two sector portals and additional projects are in preparation.

Better Integration—but How?

The continuous growth of the portals gives businessMart AG increased transaction revenues and clear growth in subscribers. Accordingly, more outside systems need to constantly be connected to the portal. The decisive head start in technology—the far-reaching integration of the suppliers' and customers' computer systems into the portal—was to be expanded even further for a more economical conversion. businessMart went in search of a solution that would significantly simplify the interface management and provide a reliable, flexible, and easily controllable platform for the exchange of business process information.

Conversion of the Architecture

businessMart created an SOA and implemented it throughout the entire portal. Within that context, the technology components were connected in independent, individual modules, or "services." Using the modules, business processes no longer needed to be conducted through the bottleneck of a portal center, but instead could be processed in parallel in the allocated modules. The architecture connects the customer systems with the available applications, using a central interface for all the portal components. Using component architecture enables a significantly faster development. The computer systems of new clients can now be integrated just as quickly as separate modules. Efficient and reusable application modules are created, resulting in software maintenance and care that is significantly more economical. In addition, the consistent use of fallback rules ensures that the system stability is not threatened by the failure of a single (outside) component.

The Advantage of the New Solution

The decisive additional value arises for the customers of businessMart AG through the now unrestricted transferability of individual portal services to outside software systems. The most important portal functions can now also be used directly in the customers' usual software via web service interfaces. To call up product details with pictures, exploded diagrams, operating instructions, or even supplier searches, customers no longer need to exit their own merchandise information computer system. These portal services are seamlessly integrated into the software and passed online from the portal. The customers of businessMart profit from faster and more comprehensive possibilities for intervention: Time-consuming, manual information processes were digitized and have thus been made more economical.

For the integration of the customers' various back-end systems, businessMart uses IBM's SOA-enabled software to connect 16 different SAP systems. Now marketplace participants can simplify the flow of information as well as increase their sales and reduce their procurement costs.

In e-business, the contribution margin killers are unclear order positions that generate manual questions by telephone and annoyances through wasting time. This step can now be processed significantly more efficiently through the portal: If the system recognizes an obsolete article number, an unclear entry of a packing unit, or even a format error, the supplier or the customer is contacted in real time. The supplier or customer can immediately remedy the problem directly in the portal through a correction or by creating a conversion rule.

Well Equipped for the Future

With the transfer of the portal functions to the customers and suppliers' systems, the first step was taken in the expansion of the business model. In the future, companies will no longer exchange their order information only by means of contacts; they will instead allocate applications and have joint access directly to IT services. A portal will have to take over the role of the interface management to keep the complexity at an acceptable level for the market partner. While in search of a modern technology base, businessMart also found an engine for an evolutionary step.

Case Study: COSCON

COSCON is China's largest shipping container company. As a leader in the shipping and logistics services market, COSCON has 127 container vessels and has shipped more than 320,000 containers to date. Its ships are regularly deployed to ports across the globe, each with its own regulations. To support these diverse requirements, COSCON had an electronic data interchange (EDI) system that consisted of 21 different applications, with a variety of architectures and development languages supported on multiple servers. As COSCON's business continued to grow, its complex IT system hampered the company's ability to respond quickly to its ports of call and its external and internal customers.

To become more competitive, COSCON integrated its existing EDI applications by deploying an SOA. The open standards–based technology approach enabled COSCON to connect its silos of data and software applications to allow its internal business to better interoperate with its customers, partners, and suppliers. This solution leveraged the existing resources within COSCON and augmented it with a solution that improved productivity, allowing for more efficient communication and enabling COSCON to quickly react to changing market conditions.

With countries constantly changing their customs requirements, with a change occurring every two to three days and almost one month per change required in the current system, the need for flexibility—becoming flex-pon-sive*—was critical to deployment. Because of these demands, COSCON chose to implement process integration using SOA. The process entry point was chosen to improve the communication between IT and business as well. Some of the processes COSCON chose to focus on were adding ports and reports that the business side needed. By using the process to create business services of the key tasks, COSCON was able to meet government (customs) regulations and to integrate with many applications in different languages. COSCON deployed an SOA approach to consolidate multiple EDI systems and processes.

COSCON has experienced a dramatic increase in internal efficiency and has achieved higher levels of customer satisfaction. COSCON can now respond more quickly to the changing regulations set by foreign ports. In addition, COSCON has reduced the time it takes to configure and modify its IT system, from two to three months to just two to three days. This time savings and greater development efficiency has resulted in higher customer satisfaction levels and has offered sizable cost savings. In addition, it allows COSCON's business personnel to communicate with IT staff and better understand the IT system, and the IT people can also better understand business operations. As we discussed earlier, this alignment of IT and business is crucial for business flexibility.

"Over the past few years, we have witnessed an increase in demand for our shipping services," said Mr. Ma Tao, Deputy General Manager of Information Technology at COSCON. "This increased interest has placed additional pressure on our business, helping us realize that we needed to revamp and invest in our internal technology infrastructure to position our business for future growth."

Case Study: Automobile Club of Italy

Whether navigating the crowded streets of Rome or maneuvering the narrow roads that hug Italy's coastline along the Adriatic Sea, drivers count on the Automobile Club of Italy (ACI) to deliver emergency roadside assistance.

As the nationwide provider of roadside services, ACI relies on technical support from ACI Global, which maintains a call center that provides 24x7 assistance. ACI Global has agreements with automotive manufacturers, fleet and car rental agencies, tour operators, banks, and insurance companies to provide multiple products and services via its call center. Center operators handle approximately six million contacts annually, using advanced technologies to provide customers with timely and effective service.

The complete ACI operational network includes 3,000 assistance vehicles, 1,000 operating centers, and 5,000 operators.

ACI Global strives to develop, implement, and maintain value-added services that simplify the operations of its customer companies. The firm had been generating such improvements primarily through continually offering customers new and innovative services that encouraged increasingly rapid response times to roadside emergencies. Unfortunately, isolated business processes and outdated software-design efforts limited ACI Global's ability to redefine its business offerings, frequently delaying the delivery of new products and services.

To satisfy customer expectations for new and innovative services and speedy response times, ACI Global wanted to implement a standardized, flexible design infrastructure that would encourage the rapid creation and delivery of new business functions, in turn streamlining several call center processes and shortening service delivery.

ACI Global worked to design and implement an automated call center called "Centrale Operativa" built on an SOA. Now ACI Global staff members can leverage the SOA's open standards capabilities to easily design new support services for customer operators, including automated call-routing systems and improved call tracking and management. The SOA also encourages the reuse of code and processes to further streamline the creation of new services.

ACI Global expects automation and integration to lead to a 20% improvement in customer call response times and a 30% increase in call center operator productivity.

These lessons were learned:

• It was very important up front to involve all the stakeholders.
• Focusing on the business needs made for a smoother production rollout.

Case Study: Pep Boys

In 1921, four young neighborhood entrepreneurs in Philadelphia, Pennsylvania, pooled $200 each to start what has become the largest automotive aftermarket retailer in the United States. Today Pep Boys Auto employs more than 22,000 people at its 593 stores in 36 states and Puerto Rico, and reported more than $2.2 billion in sales in 2004. Pep Boys differentiates itself from competitors by being the value alternative to car dealerships, providing exceptional customer service, and being the only retailer that serves all four segments of the automotive aftermarket—do-it-yourself, do-it-for-me, buy-for-resale, and replacement tires.

Pep Boys is leveraging SOA to drive its business goals. In 2003, Pep Boys started to analyze its point of service (POS) and Service Work Order System (for bay service) and realized it did not have the right architecture or applications. The first thing the company did was set up its foundational technical base for SOA with a focus on connectivity and reuse. In this phase of its SOA deployment, Pep Boys leveraged a wide array of existing systems, including IMS/CICS/Old Java. They used a standards-based approach, making approximately 45 calls to back-end systems using web services (WSDL interfaces). They built roughly 200 functional services, with no migration of data required.

For the next phase, Pep Boys extended its deployment to include choreography of several retail processes, including returns and invoicing/billing. They choreographed processes/workflow consisting of 15–20 services. This put the key pieces in place to push new and enhanced functions to its employees in the store. The capabilities enabled by its SOA allowed sales reps to have enhanced, more productive customer interactions. The sales reps were able to turn POS screens around so that they could up-sell and cross-sell using new functionality. At the same time, Pep Boys created and was able to use a single view of the customer for various in-store activities. This is where they focused on the information entry point. The initial pilot was completed in four months at 12 stores, and the total rollout to 590+ stores was completed in April 2005.

Pep Boys started its IT transformation by replacing its outdated POS environment with an IBM Open–POS solution—a next-generation POS configuration built on Java technology–based 360Commerce software running on IBM Store Integration Framework, a specialized instance of an SOA architecture for retail customers, comprising hardware, an operating system, and services from IBM.

The business benefits of this SOA entry point of information in combination with other SOA entry points were that Pep Boys experienced faster checkout and increased responsiveness to customer needs, and enhanced employee productivity and efficiency. "Now we can take debit cards, which have a lower fee rate than credit transactions," explains Pep Boys' Bob Berckman, Assistant Vice President.

Case Study: U.S. Open

The U.S. Open is a tennis event sponsored by the United States Tennis Association (USTA) that is a not-for-profit organization supporting over 665,000 members. It devotes 100% of its proceeds to the advancement of tennis. The USTA leverages SOA to support its business goals and has partnered with IBM since 1990 as its technology supplier. More than 4.5 million online viewers tuned into the United States Tennis Association's (USTA) U.S. Open held in 2006.

The USTA created an integrated scoring system for the U.S. Open. This scoring system helps collect data from all courts and then stores and distributes the information to USOpen.org, the official website of the U.S. Open. The ability to immediately and simultaneously distribute scoring information—with IBM supporting more than 156 million scoring updates for the US Open in 2005—is illustrative of the value and capabilities of a larger technology industry trend known as SOA. The technology supporting the U.S. Open is an example of how SOA can help an organization use its existing computing systems to become more responsive and more closely aligned with the needs of its customers and partners.

For example, umpires officiating at each of the U.S. Open matches hold a device they use to keep score. These devices feed into a database that holds the collective tournament scores. From there, the constantly changing scoring information is fed to numerous servers that can be accessed through the U.S. Open website. When visitors go to USOpen.org and click the "Live Scores" link, they see the scoreboards for all 18 courts that are updated before the visitors' eyes. This is then used to present visitors with instantly updated scoring information that is presented on the site's On Demand Scoreboards and the "matches in progress" pages.

More specifically, the U.S. Open's scoring system relies on an integration middleware that is a critical part of an SOA. Software acts as an Enterprise Service Bus to transform the messages in-flight from the courts to the devices and to the U.S. Open Web site. A database is also used to support the distribution of the scores and statistics.

Scores and statistics can also be instantly viewed on the Web site and compared with past U.S. Open events and similar competitions. Additionally, IBM technology is helping support the integration of information and statistics related to the tournament, such as individual scores and how they compare with current and past performance of the players and competitors.

When you consider the speed at which these matches are played, you quickly understand how the technology that supports the U.S. Open needs to keep pace as play-by-play results are accurately shared all over the world. The USTA's selection of SOA ensures that fans around the world have a virtual seat to the U.S. Open, with scoring information delivered as it happens on the court.

Linking all of the tournament's information and delivering scores in real time requires a sophisticated information technology (IT) infrastructure that can be easily accessed and understood by USTA subscribers, many of whom are not IT professionals. The USTA is at the beginning stages of an SOA, and the USOpen.org site will be able to accommodate a growing audience of tennis fans worldwide.

In fact, nearly 660,000 fans attended the 2005 U.S. Open, making it the world's largest annually attended sporting event. Also, USOpen.org is among the top five most-trafficked sports event Web sites. The site has seen a 62% year-over-year traffic increase, with 4.5 million unique users, 27 million visits, and 79,000 concurrent real-time scoreboards in 2005. Additionally, since SOAs are scalable and flexible, they can easily meet the demands of the constantly changing USOpen.org Web site and the anticipated heavy site traffic produced by 27 million visits—with each visitor spending nearly an hour and a half per visit.

Case Study: Sprint

In 1899, Cleyson L. Brown sensed the need for a viable alternative to the Bell telephone company and launched the Brown Telephone Company in Abilene, Kansas. In doing so, he began what would become one of the most successful and innovative telecommunications companies in the world: Sprint (www.sprint.com).

After over a century of visionary leadership, Sprint has firmly cemented its reputation in the industry. The company has been first to market with nearly all the telecommunications technologies that inform how Americans communicate today. From the first fiberoptic cable and first digital switch implementations, to the first transatlantic fiberoptic phone call, to the only nationwide Personal Communications Service (PCS) network, Sprint has consistently proven that it is a leader in the telecommunications marketplace.

Sprint now counts over 26 million customers in more than 100 countries, offering them products and services that span traditional phone service, data solutions and Internet services. Sprint's Business Mobility Framework (SBMF) is the most recent extension of the company's innovative heritage and its commitment to providing products and services that help customers find new, more efficient and more profitable ways to do business. The SBMF—a combination of network capabilities, a business approach and a development philosophy—aims to reduce both the cycle times and costs associated with enterprises that want to improve operational efficiency while offering new, mobile-oriented products and services to customers. It enables enterprise developers to extend their applications to mobile workers without having to be experts in mobile technology or the corporate IT environment. As it turns out, the SBMF has opened even more doors than Sprint anticipated.

Focusing on Core Competencies to Tap New Markets

Sprint is adept at serving its customers. For years, the company has rightfully prided itself on exceptional service delivery and support. What the company's management realized, however, according to Rodney Nelson, senior product manager at Sprint, was that the enterprise market was underserved.

"We realized there was a lot of untapped value," says Nelson. "Within our carrier network, we had a lot of services that people wanted." Services, in this case, meant application functions developed internally that could be extended to other companies for inclusion in their applications.

For example, Sprint developed a locator application in response to recent U.S. 9-1-1 emergency regulations that makes cell phone location information available to emergency personnel, who can then use that information to track people in need of assistance.

Sprint realized that this service—the location piece of its application—would be very valuable to customers who manage truck fleets or need to track delivery drivers, or to any company presently using Global Positioning System (GPS) technology.

However, in order to get that value into the hands of the people—the enterprise customers—who could use it, Sprint had to envision and create a gateway whereby enterprise users, regardless of the platforms on which their applications are written, could have access to the service.

Other services include cell phone presence (indicating whether a cell phone is on or off), text messaging and sending voice extensible markup language (Voice XML) messages directly to mobile or wireline phones—integrating voice and data alerts. For example, an airline might broadcast a Voice XML message regarding a delayed flight to everyone on the flight list—to the most appropriate device.

A Standards-Based Path to Success

Since Web services employ standards, anyone, regardless of their technology environment, can make use of the services Sprint has extended. Literally millions of IT developers can include Sprint services within their applications, and can do so easily.

In most enterprises, at least half of the applications are legacy applications, and the other half typically is made up of commercial off-the-shelf (COTS) applications. To integrate new services into these applications would be time-consuming, complicated and expensive. With Web services and Sprint, however, that manual integration is no longer necessary. Developers need only to integrate the Web Services Description Language (WDSL) into the code and connect to Sprint, where the service is run.

The Benefits Are Much More Than the Sum of Their Parts

Sprint has gained numerous new business opportunities, become a leader in the field of mobility workforce enablement and firmly positioned itself to remain a visionary in telecommunications.

Sprint customers that have implemented Sprint's services have seen exceptional cost savings. Developers report that implementation time and effort have been reduced between 40 and 50 percent compared with, most notably, traditional GPS application development. In addition, the time to acquire a location from a cell phone is 30 seconds with Sprint; traditional GPS devices can take up to six minutes. The location information is more accurate, and instead of implementing GPS systems—which can range in cost from US$1,000 to US$3,000—drivers simply need to carry a cell phone, which in some cases is free.

Sprint didn't have to build a whole new IT structure to support this new service. Through its SOA, Sprint just had to unlock and expose capabilities it already had embedded in other processes and applications. This is another great example where SOA is enabling market innovation advantage.