ERP and SOA
ERP Scenario: Death by SOA?
Doc.Ing.Vlasta Svatá
Prague University of Economics
Informatics’07
22.6.07
ERP Systems Evolution
YEAR SYSTEM CHARACTERISTICS
60s – MRP Material Resource Planning systems, focus on balancing
70s business plan, inventory and bill of material
80s MRPII Manufacturing Resource Planning, focus on balancing
business plan with capacity
1972 ERP: End-to-end application ERP as an end-to-end application
1978 ERP: mainframe architecture Monolitic architecture, platform specific
1992 ERP: C/S architecture Layered architecture, verticalization of functionality,
SME solutions, support of e-business, platform specific
2000 ERP II System integration, collaborative commerce, object
oriented, platform specific
2004 ERP – integration platform TCO reduction, BI – Business intelligence
2005 ERP - composite platform Component architecture, new application logic based on
integration of different application component
2006 Enterprise SOA – process Service oriented architecture, technology neutral
platform : ERP III or death????
ERP – conclusion:
ERP systems didn't meet our expectations:
Disagreement between the standard functionality of
systems and the need of end-users ( using on average
27.6% of ERP functionality 1)
Problematic support of innovation (treasury management,
performance management, planning and budgeting,
R&D)
Costly maintenance (average SW&Service costs per user
are around $4,000 1 )
Great dependence on external supplier (provider) and
system itself
Difficulties in integration with other systems and keeping
it up-to-date in case of changing ERP system version
(1) Report:The Total Cost of ERP Ownership, Aberdeen 2006
SOA – Service Oriented
Architecture
Gartner, November 2006:
SOA is a style of software topology
(architecture) that is modular,
distributable and loosely coupled
IBM, 2006:
SOA is an architectural style, design
style, and a design principle for
application development and integration
Flexibility Architecture Evolution and Standards
Web services
(WSDL, SOAP, Dynamic
WSBPEL, ESB) Reconfiguration
Architecture
Distributed object
technology Service
(CORBA, DCOM, Oriented
MOM)
Architecture
Object
Component
oriented Oriented
programming Architecture
Structured Client-Server
programming
Architecture
Monolithic
Architecture
Time
1980 1990 2000 Today Future
SOA Benefits (IT Evergreens)
Agility/Flexibility/Faster time to market
Cost reduction
Easy integration
Improved reuse
Better scalability
Leveraging of existing applications
Reduced risk – incremental implementation
SOA has become overestimated – umbrella
solution for all Enterprise IT problems (same
story as ERP systems did)
SOA Evolution/Layers
SOA Governance
E-U INVOLVEMENT
SOA Management
WS Management
COMPLEXITY
Relation ERP - SOA
Around 67 percent of enterprises with more than
40,000 employees are planning to implement service-
oriented architecture (SOA) this year (Forrester
Research)
ERP vendors (SAP, Oracle) are investing billions to
their products in order to be SOA compatible
Three scenarios how ERP/SOA can cooperate:
SOA products will replace ERP system; only its data and
infrastructure will be available to SOA
SOA can be the next layer above the ERP system:
defined services of ERP system will be available to SOA
tools (Enterprise SOA)
ERP systems will be consolidated to support SOA
architecture and BPM activities (ERP SOA)
ERP Before and After SOA
SOA (integration backbones)
vendors
Market leaders (Gartner Magic Qudrant 2006):
Original integration specialists; they use integration
suites: SeeBeyond, Tibco Software and
webMethods
Software generalist; they use mostly APS
(application platform suites): BEA Systems, Fujitsu,
IBM, Microsoft, Oracle, SAP)
Other middleware products vendors (e.g. Sterling
Commerce – strong in B2B products)
“Which three vendors will you most likely turn to for
an SOA application/middleware platform?”
IBM 28
SAP 24
Oracle 21
Microsoft 12
SSA Global 11
Lawson-Intentia 9
Don't Know 45
Source: Forrester- ongoing surveys of 53 enterprises from September 2005 to April 2006 from inquiries,
client one-on-ones, vendor events, and customer references
SOA: the End of ERP - YES
ERP wasn't built with the Internet in mind
starting 2010 ERP customers can stop buy
applications, they will contract low-cost
integrators to build custom composite apps that
sit on the top of their ERP backbone
2012: customers
will replace ERP bacbone with another cheaper
business process platform
will apply „SaaSOA“ (SaaS: SW as a service: SW
vendor develops and operates web-native appl.
over the Internet)
SOA: the End of ERP - NO
ERP vendors are in the inflation point similar to mainframe
- C/S change
It may take decade before a new company (SOA
intergrators) can touch the big ERP vendors (SAP, Oracle)
ERP vendors are developing innovation centters around
SOA together with SOA integrators (Accenture, IBM)
New upgrades of ERP systems as a result of SOA projects
(e.g.SAP: Enterprise SOA -formely ESA project and
mySAP ERP 2007)
SOA seems to be inefficient for larger companies whose
application infrastructure comes mostly from a single
vendor (60 percent or more)
SOA can be as bad, or maybe even more painful, than
ERP
Thank you for your
attention!