Executive Briefings

SOA Has Potential to Drive Supply Chain Innovation

The evolution of service oriented architecture has enabled significant opportunities for companies to expand their existing solutions without making large-scale upgrades and re-implementations. However, these solutions tend to be more suitable only for larger companies rather than mid-sized ones due to the initial investment needed to enable these solutions.

Aberdeen benchmarked the priorities of various infrastructure areas within supply chain as part of the benchmark report titled Supply Chain Innovator's Technology Footprint 2008. Companies are focused on leveraging the following capabilities in their supply chain technology road maps: business process management, supply chain event management (and alerting platforms), and master data management (internal).

Compared to 2007, SOA and composite applications saw enhanced interest in the marketplace in 2008. The general market is becoming more aware of the underlying technology used by BPM and SCEM solutions. There are proof-of-concept implementations under way in the IT organizations of Fortune 500 companies with oversight by the supply chain line-of-business organizations.

SOA for Enabling SCM Applications

These are the characteristics of SOA enablement of SCM applications:

• Configuration templates. These allow enterprises to reduce deployment time by subscribing to common global business processes. These customers can log in, collaborate with their partners, load master data, and then on-board suppliers. After the system or process has been set up, then their customers can execute processes (both transactional as well as decision support processes).

• Ease of integration. In order to help customers leverage existing back-end systems, SaaS solutions need to make their business process libraries available as part of an SOA application programming interface (API). The intention is to allow this API to be leveraged by customers and third-party solution providers as a supply chain platform.

• Business process library. In order to feed the configuration templates and also to allow extension through the SOA API, there needs to be a set of process solutions and functional enhancements such as self-service reporting. These process libraries must be continuously enhanced and maintained by the solution provider and must allow innovators to keep their IP separate from the "core" solutions.

The Outlook

If your company has a complex multi-enterprise supply chain, look into SOA and BPM approaches. Partners for BPM and the underlying SOA architecture need to be chosen carefully because these implementations could add additional complexity and risk increasing the TCO if done incorrectly:

• Choose specialized BPM providers only if there are adequate supply chain domain experts in the organization and also if there is a need for enabling composite applications on top of existing ERP/best-of-breed solutions.

• Choose ERP providers if there is an easy upgrade path available to the version that supports a BPM platform and if there are applications available in the platform that support extending business processes.

• Choose best-of-breed suite providers if yours is  a leading-edge company that wants to create innovative workflows and business processes using a supply chain BPM platform.

Aberdeen benchmarked the priorities of various infrastructure areas within supply chain as part of the benchmark report titled Supply Chain Innovator's Technology Footprint 2008. Companies are focused on leveraging the following capabilities in their supply chain technology road maps: business process management, supply chain event management (and alerting platforms), and master data management (internal).

Compared to 2007, SOA and composite applications saw enhanced interest in the marketplace in 2008. The general market is becoming more aware of the underlying technology used by BPM and SCEM solutions. There are proof-of-concept implementations under way in the IT organizations of Fortune 500 companies with oversight by the supply chain line-of-business organizations.

SOA for Enabling SCM Applications

These are the characteristics of SOA enablement of SCM applications:

• Configuration templates. These allow enterprises to reduce deployment time by subscribing to common global business processes. These customers can log in, collaborate with their partners, load master data, and then on-board suppliers. After the system or process has been set up, then their customers can execute processes (both transactional as well as decision support processes).

• Ease of integration. In order to help customers leverage existing back-end systems, SaaS solutions need to make their business process libraries available as part of an SOA application programming interface (API). The intention is to allow this API to be leveraged by customers and third-party solution providers as a supply chain platform.

• Business process library. In order to feed the configuration templates and also to allow extension through the SOA API, there needs to be a set of process solutions and functional enhancements such as self-service reporting. These process libraries must be continuously enhanced and maintained by the solution provider and must allow innovators to keep their IP separate from the "core" solutions.

The Outlook

If your company has a complex multi-enterprise supply chain, look into SOA and BPM approaches. Partners for BPM and the underlying SOA architecture need to be chosen carefully because these implementations could add additional complexity and risk increasing the TCO if done incorrectly:

• Choose specialized BPM providers only if there are adequate supply chain domain experts in the organization and also if there is a need for enabling composite applications on top of existing ERP/best-of-breed solutions.

• Choose ERP providers if there is an easy upgrade path available to the version that supports a BPM platform and if there are applications available in the platform that support extending business processes.

• Choose best-of-breed suite providers if yours is  a leading-edge company that wants to create innovative workflows and business processes using a supply chain BPM platform.