November 17, 2008

Great Expectations
Can SOA Deliver?
Bart Narter
Orlando, Florida

A member of the Oliver Wyman Group CONFIDENTIAL | www.oliverwyman.com

Document number
Great Expectations: Can SOA Deliver?

Agenda
 What is SOA?
 Technical details
 What does it do for me?
 How do I deploy it?

© 2008 Oliver Wyman  www.oliverwyman.com Document number 2

What is SOA?

 Loosely coupled modular services to support both

business and IT requirements.

So what does that mean?

© 2008 Oliver Wyman  www.oliverwyman.com Document number 3

Loosely coupled

 Services are independent. They don’t know or care whether the service is:
– Running on Windows, J2EE or a Mainframe
– Written in assembler, C, Java, or COBOL.
– Running on a machine in the U.S., India, or China
– Being served by a CRM system, a DDA system, or a database
 So what does that do for me?
– Enables a myriad of different (legacy) systems to supply information in a consistent
way using SOA.

© 2008 Oliver Wyman  www.oliverwyman.com Document number 4

Modular

 Services are no longer monolithic applications, but broken into compound and
granular services.
 Example: Initiating a transfer is a compound service, that might comprise the
following granular services:
– Find customer
– Authenticate customer
– Find all accounts and balances (for display)
– Find account (the funding account)
– Get account balance (to verify availability of funds)
– Find account (the receiving account)
– Debit account (the funding account)
– Credit account (the receiving account)
– Find all accounts and balances (for re-display)

© 2008 Oliver Wyman  www.oliverwyman.com Document number 5

So what does modular do for me?

 Note that in the previous example we reused a number of services within the
compound service.
 Other compound services will reuse these services as well, driving consistency (=
lower risk), lower cost, and flexibility.

© 2008 Oliver Wyman  www.oliverwyman.com Document number 6

 SOA is an IT architecture consisting of loosely coupled modular services to
support both business and IT requirements.

 Loosely coupled: runs on a myriad of applications, systems, platforms and locations

to tie together new and legacy systems
 Modular: broken into compound and granular services to enable reuse
 Business and IT: across the entire organization.

© 2008 Oliver Wyman  www.oliverwyman.com Document number 7

SOA from a technical viewpoint

 Today SOA is used to broadly define a set of products and services that range from data
conversion services, to portal tools, which is why it is very difficult to answer the question, “Do
you use SOA?” A map of SOA components on the next slide should clarify.

© 2008 Oliver Wyman  www.oliverwyman.com Document number 8

Great Expectations: Can SOA Deliver?

Agenda
 What is SOA?
 Technical details
 What does it do for me?
 How do I deploy it?

© 2008 Oliver Wyman  www.oliverwyman.com Document number 9

 A Map of SOA Components

Web Portals
Registry and Repository
Manage and monitor

Human Business Process Management (BPM)

Security

Enterprise Service Bus (ESB)

Data Services Process Services

Business Logic Orchestration
System BPM

Databases Systems of Record

© 2008 Oliver Wyman  www.oliverwyman.com Document number 10

 Design SOA

Portal Design tool

Registry and Repository
Manage and monitor

BPM Modeling and Simulation Tool for

business analyst
Security

Connection, routing tool for architect

Data Mapping Process Services

and Conversion
Business Logic Low level Service
Tool
written in Java, Orchestration Tool
C, C++, etc. for developer

Databases Systems of Record

© 2008 Oliver Wyman  www.oliverwyman.com Document number 11
 Banking Examples of SOA

Internet Banking
Stop Payment Service, Charge
Registry and Repository: Find
Security: Authenticate user
Manage and monitor

Business Process: Stop Payment

Fee service

ESB: Routes to appropriate core system

Data Services Process Services

Business Logic: If Orchestration:
Customer_Status = Gold
Service_Fee = $8 else
Service_Fee = $20

Fee database DDA / Current Account

© 2008 Oliver Wyman  www.oliverwyman.com Document number 12

 Web Portals

A Map of SOA Components

 Web Portals provide a single user interface to multiple back end systems via a service oriented architecture and
HTML.
 Portals can hold multiple service requests and display them in portlets.
– An example would be with internet banking displaying a customers
- banking products
- Investments
- credit card balance (from another LOB or monoline)
- mortgage information (from another LOB or monoline)

© 2008 Oliver Wyman  www.oliverwyman.com Document number 13

Portal Example

Portlet to credit card company

© 2008 Oliver Wyman  www.oliverwyman.com Document number 14

Business Process Management can be broken into three parts

 Design: Usually with graphical eclipse based tools

 Execute:
 Monitor: Make sure that SLAs are met.

© 2008 Oliver Wyman  www.oliverwyman.com Document number 15

Example of BPM: Open New Checking Account

Human Business Process Management (BPM)

Existing No Scan KYC Run Result

Customer? Information ChexSystem OK?

Yes

 Features of Human BPM:

– It involves human interaction (such as scanning KYC information)
– It uses external processes such as Chex System.
– It can be used to standardize business processes and reduce operational risk.

© 2008 Oliver Wyman  www.oliverwyman.com Document number 16

Enterprise Service Bus (ESB) is the communication backbone of SOA.

Enterprise Service Bus (ESB)

 It generally supports the following functionality:

– Message transmission, routing, queuing, and monitoring
– Synchronous, asynchronous, point-to-point, and publish/subscribe messages
– XML and SOAP messages
– Adapters to legacy systems
 It also supports services which are called out in other modules:
– Data Services
– Process Services

© 2008 Oliver Wyman  www.oliverwyman.com Document number 17

 Put all the pieces together to get a Services Oriented Architecture

Web Portals
Registry and Repository
Manage and monitor

Human Business Process Management (BPM)

Security

Enterprise Service Bus (ESB)

Data Services Process Services

Business Logic Orchestration
System BPM

Databases Systems of Record

© 2008 Oliver Wyman  www.oliverwyman.com Document number 18

Great Expectations: Can SOA Deliver?

Agenda
 What is SOA?
 Technical details
 What does it do for me?
 How do I deploy it?

© 2008 Oliver Wyman  www.oliverwyman.com Document number 19

What does SOA do for me?

 Enables abstraction of core systems for isolation and potential replacement.

 Enables efficient messaging and business processes from the front end channels.
 Enables reuse of common business processes for greater efficiency.

© 2008 Oliver Wyman  www.oliverwyman.com Document number 20

 Enables abstraction of core systems for isolation and potential replacement.

Web Portals
Registry and Repository
Manage and monitor

Human Business Process Management (BPM)

Security

Enterprise Service Bus (ESB)

Data Services Process Services

Business Logic Orchestration
System BPM

Databases Systems of Record

Isolate this system by accessing only
via data services and process services.
© 2008 Oliver Wyman  www.oliverwyman.com Document number 21
 Enables efficient messaging and business processes from the front end
channels.

.
Web Web IVR Web Web
Portal: Portal: Portal: Portals:
Internet Teller Call Sales
Banking Center Platform
Registry and Repository
Manage and monitor
Security

Enterprise Service Bus (ESB)

Data Services Process Services

Business Logic Orchestration
System BPM

© 2008 Oliver Wyman  www.oliverwyman.com Databases Systems of Record Document number 22

 Enables reuse of common business processes for greater efficiency.

Web Portals
Registry and Repository

.
Manage and monitor

Human Business Process Management (BPM)

Security

Enterprise Service Bus (ESB)

Data Services Process Services

Business Logic Orchestration
System BPM

Databases Systems of Record

© 2008 Oliver Wyman  www.oliverwyman.com Document number 23

Great Expectations: Can SOA Deliver?

Agenda
 What is SOA?
 Technical details
 What does it do for me?
 How do I deploy it?

© 2008 Oliver Wyman  www.oliverwyman.com Document number 24

How do I deploy it?

 Channel driven
 LOB driven
 IT driven

© 2008 Oliver Wyman  www.oliverwyman.com Document number 25

Channel driven SOA is the most common

 A single channel can create an SOA for itself and then share it later….or not.
 Wide adoption across the bank isn’t guaranteed.

© 2008 Oliver Wyman  www.oliverwyman.com Document number 26

LOB driven SOA

 An LOB might need functionality that isn’t available without integrating multiple systems or
creating a new system to assist in a business goal.

© 2008 Oliver Wyman  www.oliverwyman.com Document number 27

IT driven SOA

 This is a pure plumbing play and is difficult to drive across the bank.
 Who pays for these projects?

© 2008 Oliver Wyman  www.oliverwyman.com Document number 28

National City Business Drivers

 Single view of the customer

 Customer Management Objectives (CMO) drive customer experience
– Call center
– ATM
– Statement messaging
– Branch

© 2008 Oliver Wyman  www.oliverwyman.com Document number 29

 From old architecture…

Channels

Integration Layer

CIF
Analytics

StmtsPosting LedgersPricing
StmtsPosting LedgersPricing

Notcs Posting LedgersPricing

Bills Posting LedgersPricing

Later

Data
Warehouse
..
. Campaigns

Later

General Ledger © 2007 Celent LLC 30

© 2008 Oliver Wyman  www.oliverwyman.com Document number 30
 To new.

Channels

Service Enabled Integration

Integration Layer Layer Analytics

B Bi
Contain CIF
– Leverage

us ll
in ing
Pricing

Pricing

Pricing

Pricing

es
s
CIF

Correspondence
Data
Stms Posting Ledgers

Notcs Posting Ledgers

Bills Posting Ledgers

StmtsPosting Ledgers
Near Data
.. Real Time IDH
Warehouse

. Warehouse

g r
in e
R

ic um
ew

Contain – Leverage

Pr ns
ar

Co
d s

General Ledger Campaigns

© 2007 Celent LLC 31

© 2008 Oliver Wyman  www.oliverwyman.com Document number 31
Additional Questions?

Read the Celent Reports

 A Tale of One City: Core Renewal via SOA at National City Bank
- http://www.celent.com/PressReleases/200712122/CoreRenewalNatCity.asp
 A Christmas Carol: Wells Fargo Sings the Praises of SOA
- http://www.celent.com/PressReleases/20071221/WellsFargoSOA.asp
 Great Expectations: Can SOA Deliver? Part I: Core-Driven SOA (Non-US)
- http://www.celent.com/PressReleases/20080516/GreatSOAPartI.asp
 Great Expectations: Can SOA Deliver? Part II: Core-Driven SOA (US)
- http://www.celent.com/PressReleases/200805xx/GreatSOAPartII.asp
 Great Expectations: Can SOA Deliver? Part III: Front End SOA
 Great Expectations: Can SOA Deliver? Part IV: Platform SOA
 To ESB or not To ESB

Or Contact
 Bart Narter (bnarter@celent.com) San Francisco

© 2008 Oliver Wyman  www.oliverwyman.com Document number 32