BriefingsDirect SOA Insights Analysts on Defining the New Role of 'SOA Architect'

Edited transcript of weekly BriefingsDirect[TM] SOA Insights Edition podcast, recorded March 23, 2007.

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Dana Gardner: Hello and welcome to the latest BriefingsDirect SOA Insights Edition, Vol. 15. This is a weekly discussion and dissection of service-oriented architecture (SOA) related news and events with a panel of industry analysts and guests. I'm your host and moderator, Dana Gardner, principal analyst at Interarbor Solutions, ZDNet software strategies blogger and Redmond Developer News Magazine columnist.

Our panel this week consists of Jim Kobielus. He’s a principal analyst at Current Analysis. Welcome to the show, Jim.

Jim Kobielus: Hi, Dana. Hi, everybody.

Gardner: Also joining us from the U.K., Neil Macehiter. He's a research director at Macehiter Ward-Dutton. Welcome, Neil.

Neil Macehiter: Hi, Dana. Hi, everyone.

Gardner: Also joining us today we have Steve Nunn. He's the vice president and COO of The Open Group. Welcome to the show, Steve.

Steve Nunn: Thanks very much, Dana, and good morning, everyone.

Gardner: Also joining us is John Bell, an enterprise architect at Marriott International. Hello, John.

John Bell: Hello.

Gardner: We're going to be discussing the role and concept of what’s becoming defined as the "SOA Architect." This is a different role, as we’re finding out, than the enterprise architect, but certainly seems to be part of an evolution of the role of architect within the enterprise and within IT in general.

We’ve invited a representative from The Open Group, in this case Steve Nunn, to join us, because The Open Group has taken some steps to try to define the role of the SOA architect, has created some certification around that role, and is trying to get in front of this role in terms of what will be required in the marketplace. That is, to try to encourage more people to step up and understand this role and to certify themselves, so that the progress and maturity of SOA practices can continue and not face a human resources crunch.

So, with that, why don’t we hand it off to you, Steve? Why don’t you tell us a little bit more about what The Open Group is doing and why?

Nunn: Thanks, Dana. The Open Group and its members have been working in the architecture space for over a decade now, primarily developing something called The Open Group Architecture Framework (TOGAF), but, as you’ve mentioned, we're running certification programs in two specific areas. One is in relation to TOGAF, but perhaps more relevant to this discussion is our IT Architect Certification (ITAC) program.

I guess that sets a caveat at the outset. The terminology around what type of architect it might be -- IT architect, enterprise architect, SOA architect -- is still very much settling down as a topic of debate in its own right, but our program that I can talk about is the IT Architect Certification Program, which is a broad skills- and experience-based program. It's aimed at creating a vendor-neutral program by which individuals can be certified. It provides them with a transferable qualification in the industry, and it enables employers to know that if they prefer recruiting certified individuals, they would be getting somebody who has been through an accreditation process.

Briefly, the process would be that a resume is compiled, which can be quite extensive, up to 52 pages in some cases.

Gardner: Wow!

Nunn: Yeah and then there’s a peer review by a panel of three certified architects themselves who would probe a little on the resume, ask questions of the candidate, and conclude whether or not that individual meets the conformance requirements.

Gardner: Is this process already up and running, or is it something you're still pulling together in terms of how you want to approach it?

Nunn: No, this is up and running. We launched this in July 2005, and as of today, we have just a shade under 2,000 individuals from all sorts of companies and all over the world who are certified under this program.

Gardner: This is the SOA Architect Certification?

Nunn: This is actually what we call ITAC, the IT Architect Certification.

Gardner: I see.

Nunn: It has several levels and covers various disciplines. The SOA-specific part of it is one that we are still working on. We have various horizontal levels under this program. The conformance requirements for meeting those levels have been agreed upon. There’s an entry level and a higher level. We are working on the highest level right now, but what’s also going on is work on the individual aspects of that certification, of which SOA is one. What we’re quite proud of in this program is the conformance requirements for the overall program, and what we're now focusing on are the conformance requirements for the individual disciplines.

Gardner: Perhaps this is a good time to go around the room, so to speak, and see if we’re in some agreement that an SOA architect is fundamentally different from an enterprise architect and why? Why don’t we start with you Jim Kobielus. Do you see these as significantly different roles?

Kobielus: Not really. You have to be an IT architect to be an SOA architect. It seems to me that an SOA architect, or that discipline, is a subset of the overall enterprise architect. I would like to know precisely what other disciplines or practices that one needs to be certified in to be a SOA architect, versus just an overall enterprise architect, I’m still unclear on that.

Gardner: When we hand it back to you, Steve, one of the helpful concepts for me in understanding this was the notion of the "city planner" or "town planner" role. The analogy is that an SOA architect needs to like a city planner, looking at all the resources and infrastructure and how the entire community comes together, managing constituencies and political relationships, whereas an IT architect might have a smaller role. Can you expand on that a little bit?

Bell: Actually, an enterprise architect from my perspective would have the view of the town planner. When they’re looking at the entire city, they're looking at how the various neighborhoods, how the various business zones, etc., fit into that city. The SOA architect, from my point of view, is really more interested in, "Hey, how does that underlying infrastructure allow different neighborhoods to communicate with each other and exchange messages? How are health services delivered across neighborhoods?"

So, it’s more interested in, "Okay, I’ve got a firehouse. Can the fire truck get to the house before it burns down?" The vision of the SOA architect is more associated with the communications pieces within the community.

Gardner: So, the hierarchy might be that the enterprise architect is in the town planner role, the more holistic, oversight uber-architect role, and then a subset of that is making sure that the communication channels between and among these different facets of resources and functionality are behaving well and conforming to what needs to happen.

Bell: Conforming to the standards so that they’ve got a consistent set of standards for exchanging information, those kinds of things.

Gardner: Okay. Neil Macehiter, what you make of this?

Macehiter: In that that classification of the difference between enterprise architecture and the SOA architect, it sounds to me that the premise is that the SOA architect is focused primarily on the plumbing. From a bottom-up perspective, the challenge that many SOA architects face is more around understanding what the services are that need to be delivered in a business-meaningful way, not just about communication and plumbing. It’s also about understanding the high-level, business-meaningful services.

There is a business strategy, there are business processes and priorities, and there are the services we need at a business level. Then, there's a handoff to what’s currently defined as the SOA architect, who will actually define how those services are deployed in technology terms. So, the distinction is quite blurred. A service-oriented approach is one of the methodologies and the approaches that you can utilize to deliver or to support an enterprise architecture initiative. So, I still find a distinction difficult.

Kobielus: I second what Neil’s saying. I’m uncomfortable with just reducing SOA to the plumbing. In the three-layer stack that I carry in my head, the plumbing level is the enterprise service bus, and then SOA refers to development and reuse practices within the development organization to enable maximum sharing and reuse. Then, there’s the layer above that, which is the applications, services and data -- the business processes.

I’ll put enterprise architecture at that very top layer, concerned with the end-to-end set of resources: app services, data, etc. The SOA architect would be the middle layer of the development and reusing. The layer below that, the enterprise service bus (ESB) or whatever, I call that "IT architect" in the sense that it's the infrastructure architect.

Bell: And to be fair, I didn’t mean to imply that the SOA was limited to the plumbing. My intent was saying that the enterprise architect has a much broader spectrum and scope that they have to deal with than your SOA architect has to deal with. Putting it into that city paradigm, you kind of limit it as to how to describe some of the roles. I try to clarify that by saying it’s not just how they communicate, it’s things like, "Hey, where’s the fire station? Do you have a fire station? Where’s your police station? Where are your schools? Where are all those pieces that are providing services to that community and are they adequate for providing the services to their community?" That’s a subset of what a city planner has to do but it’s still an important city-planning kind of function.

Gardner: John, you’re in the trenches, you’re an enterprise architect in a large global concern. How do you see this hierarchy and is this really the right discussion that we’re having?

Bell: My view is that the enterprise architect is at the top of the hierarchy, and at some place, working with the enterprise architect is an SOA architect, and their focus is on, "What are the services that are being delivered, how am I delivering them? What’s the infrastructure I am using to deliver it? Do I need – using that town model -- a police station? Do I need a fire station? Do I need a school? Do I need a museum? And, if I do, how do I get that service out to the community or to the entire city, not just an individual neighborhood?"

So, from my perspective, using a city planner paradigm, the role of the SOA architect, is identifying what are the services that need to be available to the city and how to deliver those services out to the city.

Gardner: Back to you, Steve Nunn. It seems to me that there needs to be a fair amount of flexibility, enterprise by enterprise, and circumstance by circumstance, as to how this SOA architect role pans out. How much standardization and methodological consistency can we bring to something that, in fact, will probably be dealing with huge variability from organization to organization?

Nunn: Something that we’ve had to address in putting the program together is that there are huge differences. Even taking the frameworks that might be used in implementing an enterprise architecture, there are huge differences among organizations. Some organizations are required to use a certain framework. Our approach is not to specify exactly how enterprise architecture or SOA architecture is done in the certification program, but more about the experience of the individual who's implementing it.

It doesn’t seek to define a particular way of implementing the architecture, but is more about the skills and experience of the individuals who are playing that role inside an organization. They could be part of a team in larger organizations, or could be one person in a much smaller organization who is playing this role. The whole idea of raising the value of the architects of various titles in the organization is what we are seeking to achieve with our efforts in the certification program. It’s about raising the standards of that role, and getting people to understand that it’s a valuable role and, apart from anything else, it should be compensated as such.

Macehiter: Dana, could I chip in with a quick question there?

Gardner: Certainly.

Macehiter: It’s about the approach and the experience, rather than framework, and I agree completely with that. Given that the SOA discipline is currently within the IT architect certification, to what extent do you look at the approach and experience in terms of the interface to the business, business understanding, or collaboration with the business? I think that key elements of the SOA architect role are skill and capability, as well as the more IT-oriented skills and capabilities.

Nunn: Well, that's not so different between SOA and enterprise architecture. I’d say exactly the same about the enterprise architect -- that ability to translate the business need into the systems underlying or delivering the needs of the business. It’s something the enterprise architect absolutely needs to have, and that’s why we think there’s a special set of individuals who play this role. So, there isn’t really a difference in that respect between the SOA architect and the enterprise architect.

Kobielus: I like what you do. Thinking about the whole notion of certification, there are two ways to go about it. One approach that you can easily take -- and this is the way it’s usually perceived -- is when you are certifying a CPA, you’re certifying somebody as a skilled in an established and knowledgeful body of practice, be it law, medicine, whatever. But when there’s no consensus body of practice that everybody agrees upon -- for example SOA, which is still evolving -- a certification in that regard is more like when somebody is applying to college. You’ve got to send in your transcripts, write essays, and you also might have to go and do an interview in the admissions office. They look you over and say, "Oh, this is a smart person. Yeah."

So, they consider the sum total of everything you’ve done and who you are in certifying that. They say, "Yes, you’re good enough to be admitted into this college," and then proceed from there. That’s sounds like what you’re doing. You’re certifying the competency of a particular individual in this general field called a enterprise architect (EA) or a SOA architecture.

Nunn: That’s right, Jim, and it’s not a bad analogy at all. It's about assessing the individual. It’s a relatively young discipline in its own right. One of the things that we look at in a conformance requirement is the role that those individuals have played in the projects that they have been involved in, and whether they had been in a lead role or support role, or a combination of the two, but it certainly is about the individual, rather than the specific approach that they take or any particular body of knowledge.

Macehiter: Just one other quick comment on this, if I may. The other dimension for this, I think, is rather than thinking about the role, thinking about SOA as an approach. Then, thinking about how that approach applies to different types of architect. What I mean by this is that a lot of the emphasis and focus on SOA today has been around application development and integration, when, in fact, there’s a broader perspective that really extends across more traditional IT architecture and other disciplines, for example, a service-oriented approach to infrastructure architecture and the service-oriented approach to the operations and operational management of IT.

So, there are two dimensions that a body such as The Open Group might want to think about. One is the role of a service-oriented architect, and the second is how service orientation impacts other architecture disciplines and other IT functions or operation capabilities. If we don’t do that, we risk driving SOA into a particular stovepipe focused on application development and integration, and aren't thinking about it more broadly as an approach that it is an enabler of whatever the enterprise architects are driving out.

Gardner: Thanks, Neil. I suppose, too, that the role of the SOA architect will shift, as the maturity of SOA principles and methods evolves inside of an organization. They might have to start out a bit more focused on application development and deployment issues, move up toward being mindful of the business issues, and then move up more toward being the communications conduit between the fire house and the police station, for example. Does that make sense?

Macehiter: Absolutely. It’s about gradually extending through the life cycle.

Gardner: One of the reasons we are discussing this is that we’ve seen some warnings from analysts and others saying that we are moving toward SOA, but we really might find ourselves without the people with the background and abilities to move this. So, we’re worried a little bit about a dearth of qualified people, which might, in fact, stifle the progress here for SOA.

Do you see that is the case, Steve Nunn? Do you have any sense of numbers and what the demand is going to be? The second part of the question is, if there aren’t enough people, aren’t these roles going to fall upon the enterprise architect anyway?

Nunn: Dana, what we’re hearing is there aren’t enough enterprise architects to start with. So, I think it’s a given, therefore, that the SOA specialists are in short supply too. We’re hearing from our members that if they spot a good enterprise architect or somebody they think has potential for that, then they try and grab them. They’re pretty few and far between right now in terms of folks with experience.

Obviously, there are other folks that we just talked about with the college analogy who might well be groomed into that role in the future. So, certainly there is a shortage right now. That's what we are hearing from our membership. I don’t have specifics on numbers, but the message we hear is that demand is out-stripping supply right now.

Macehiter: This is not new. We’ve been through this with every major technology advance or discipline advance. You used the word "potential" there. I think there are individuals within organizations that have the potential to fulfill that role. Part of the benefit of this certification approach, providing conformance and definitions of what constitutes the role, is that it will help organizations identify the individuals within that company that have that potential, even if they don’t have the 50-page resume that demonstrates that they have been there and done it, because the key element in a service-oriented approach, and an enterprise architect more broadly, is an understanding of the business.

If you’ve got individuals within the organization that understand how the business works, have been around, and know the right individuals to talk to, that that can be of much benefit in terms of enabling effective EA and SOA, as can be going outside, finding someone from a different vertical market or different industry, and bringing them in because they’ve done six SOA projects elsewhere.

Gardner: Thanks Neil. Let’s take that point back to John Bell. Now, as an enterprise architect with Marriott International, I assume that you’re going to be in the position of having to hire or find SOA architects in this climate of scarcity. Where do you think these people will come from and what kind of backgrounds would you look for?

Bell: I think what we are going to have to do -- fortunately or unfortunately, however you look at it -- is end up training our own people. A lot of it goes back to what was just said about having to have an understanding of the business. You have to know the people in the business. You have to understand what the business of the business is. You have to have a lot of domain knowledge in order to create an effective SOA environment.

Because of that, when you pull somebody from outside, they may understand the technology, but they have to come up and learn the business, which is harder to train than somebody who has a general technology background, but knows the business pretty well, because he has been working in the business. Marriott happens to be a company that retains employees for years and years on end. So, in our IT department we have people who may already have 5, 10, 15 years of experience working directly in the business. And we can’t afford to lose that.

Gardner: Do you find that a developer is a fast-track path to SOA architect or a business analyst, even though it makes great sense to have someone with longevity in your organization? Is there particular type of role that they would have played that seems to conform to this need for SOA process management and evangelism?

Bell: In our experience, we are finding developers, as they move through their technology career path, since they have been developing within the context of the business, if they take that broader view, they understand the basis for the SOA architecture that’s installed in this particular company. They tend to make a good SOA architects with the proper training, and sometimes that training isn’t the technology training; it’s the people training -- teaching them how to conduct interviews, how to talk to people, how to get information from people, particularly in a company like Marriott where the business is not technically oriented.

Kobielus: This is all very good, but it doesn’t address the need that many companies have which is, "Hey, we need to hire people straight out of college who have some background in architecture, and where are we going to find these people and how are they going to get certified?"

Everything I'm hearing says that, an EA or a SOA architect is somebody who has experience and, by definition, somebody right out of college doesn’t have experience. So, is this the kind of thing that we can actually train in school or does somebody have to be in their career for 5, 10, 15 years before they’ve been steeped enough in all of this architectural infrastructural development and integration stuff to the point where they can be certified?

Bell: I’m also an adjunct faculty member at Towson State University, and this is an issue that we’re dealing with at the university level so that the university can provide the skills that the local businesses in the Baltimore area need. So, at the graduate school level, we are looking at what we offer in the way of architecture courses that take architecture from an enterprise or SOA perspective, so that we can enable our students who are finishing graduate school to be more and better prepared as they enter their new job market.

Gardner: These are excellent points. Steve, you and I discussed, when we spoke about some of these issues a month or so ago, that you were also trying to encourage universities to create the curriculum and the definition of these jobs. Can you fill in our listeners a little bit on what you’ve seen?

Nunn: That’s right, Dana. Something The Open Group launched at the end of January this year was the Association of Open Group Enterprise Architects (AOGEA), which really is -- the analogy here is the one somebody used earlier with attorneys or CPAs -- to do for enterprise architects what the Bar Association, for example, would do for attorneys, all joking aside. I think one of the things that we’re trying to do is partner with various types of organization in creating this community and this professional association.

One of those groups is the academic community, so we are putting out feelers to various universities to explore the possibility of getting enterprise architecture on the curriculum. There is one university that we are aware of where there is actually a TOGAF module in some of their courses. Obviously, changing a curriculum is a multi-year project, or multi-year plan. It’s not going to happen overnight, but in the interim, one of the categories of membership for the association is students.

So, those who are on a course of some description inside the university or even working in a job and doing part-time study, can join the association, be part of the community, get the information that’s available there, be on the news groups, maybe take part in the local chapter, or whatever they want to do to start building up some experience.

I had somebody come up to me a couple of weeks ago, after a talk I gave, and said, "This is exactly what I’ve been looking for, because in my organization I’m quite junior and the people above me really aren’t that interested in enterprise architecture, and certainly not SOA, but they won’t listen to me because I’m too junior. So, I need to get some experience or immerse myself in this field. Some kind of virtual community that allows people to do that is going to be a great help to me."

So, that’s one of the thing we’re trying to do. There are various membership categories, and student is just one of those.

Gardner: Now, it does seem that we have a climate of opportunity here. There’s the track for developer to move above that role and embrace more business understanding in domain expertise, and that would be a track. We’re looking at more universities preparing people for these types of roles. We’re probably going to find, again, variety within organizations in terms of business analysts or non-tech people coming into this role, because it requires influencing and consensus building, and so forth.

Usually, in markets, when there’s opportunity and there’s scarcity -- and these are probably well-paying jobs -- we would expect for the supply and demand to even out at some point. For those in the field like yourself, John Bell, am I overly optimistic that this supply and demand is going to mesh, or are we looking at something a bit more serious in terms of the next three to five years where there’s going to be a serious deficit of talent?

Bell: I think that the supply and demand will eventually mesh, but there may be a gap in the next year or two. I don’t know if it will carry out for three to five years.

Gardner: Well, thank you very much. Let’s move on to our next subject of the day.

In March an announcement came from the consortium of large IT vendors including SAP, IBM, Oracle, BEA, and Cisco. They have formed a series of proposed standards, the Service Component Architecture (SCA) specification and the Service Data Objects (SDO) spec. We are not quite at the standards level, but that seems to be the goal, to take this approach through OASIS, which is the organization that’s overseeing the Web services specifications and standards, WSDL, UDDI and SOAP and so forth and all the WS-* specifications.

It seems that the vendors have stepped up and said, "Listen, we need a level of standardization. We are going to do some heavy lifting, create some specifications, and then we are going to hand them off to the standard organization." This strikes me as an important juncture in the maturity and real-world applicability of SOA, and I wanted to test that hypothesis on Jim Kobielus.

Kobielus: Yeah, it’s very important. It’s clear that the SOA paradigm requires ever more high-level abstractions to enable easy development of very complex, orchestrated, end-to-end services. The SCA and SDO specifications – the initiative has been being going on for a couple of years – have come a long way and they’ve got pretty significant support throughout the industry. Microsoft is one of the few important holdouts. It's not only the high-level abstraction for developing competence services, but also, especially, in my area, the SDO, the high-level abstraction for working with heterogeneous data. I see the SDO, in itself, becoming potentially the standard industry framework for what’s called the semantic layer for any data integration.

So, I’m very keen on the potential for SDO, for example, within the business intelligence space, the data warehousing, and the enterprise, information, integration space. The fact that now OASIS will be taking over ongoing development of SDO, puts it on a very important fast track. Hopefully, we’ll get some of the business intelligence (BI) vendors like Business Objects and Cognos behind it. That’s one of my fond hopes.

Gardner: Jim, you’re tracking the data management side on this quite deeply. Do you think that SDO has the potential to become the ODBC/JDBC of SOA in terms of what those things enabled and empowered for distributed architecture?

Kobielus: It’s quite likely, because it’s leveraging the whole WS-* stack and the whole notion of semantic web that’s been kicking around for long time. Tim Berners-Lee keeps this going. It’s really a utopia of interoperability, where the semantic layer is the resource description layer for describing metadata. If you look at the so called semantic web’s specifications like OWL, RDF and a few others, they have not achieved takeoff velocity in the data management world. I can count on one hand the number of the BI or data warehousing vendors that are implementing OWL, for example. The semantic web has not really gotten any traction with standards or specifications where it counts.

With SDO, I still don’t see significant traction yet in the whole BI space, but the fact is that every BI vendor is SOA-focused and enabled and getting ever more so. That’s one of the clear gaps I’ve been seeing in the whole enterprise information integration (EII) side of it all in terms of distributed master data management (MDM). Every vendor, including Business Objects and the others, have their own semantic layer. That’s what Business Objects calls it.

As yet, there is no federated semantic layer specifications, but customers are asking for federation of say, Business Objects, Teradata, Microsoft, Oracle, and I believe that at some point BI and EII will converge around a common set of standards. I’m getting further and deeper into SDO, and it really looks like this is a strong potential framework for them all to work together going forward.

Gardner: A framework for a common and federated metadata approach, is it not?

Kobielus: Yeah, exactly.

Gardner: Now, the politics here struck me as a little bit interesting. Ed Cobb of BEA, who was on the call describing the movement of these specifications to OASIS, said that he hopes that this does for SOA what J2EE did for n-tier in distributed computing, which is to create a climate of growth with application server vendors coming together and ISVs building applications that take advantage of these. That sort of exploded during the mid- and late-1990s into what is now a predominant architecture for enterprise applications, as well as large Web commerce and online commerce types of applications.

Neil Macehiter, what do you make of the politics here? If J2EE did for distributed computing what they hope this does for SOA, why aren't SDO and SCA going into the Java process?

Macehiter: You've hit the nail on the head there. I think there are a couple of issues here. First is, if it went into the Java Community Process (JCP), you’re talking about SOA based on purely Java. As my colleague put it at the time, it’s like a three-legged dog running in a race. If you’ve only got Java, then you’re not really addressing one of the core propositions of SOA -- that it is about heterogeneous interoperability, with services based on multiple languages.

Gardner: What happened to "write once, run anywhere?" Wasn’t that heterogeneity and interoperability?

Macehiter: One programming language, and that’s the distinction. The SCA and the SDO are multi-program, multi-language.

Gardner: So, an abstraction above Java their pointers will make sense?

Macehiter: Yeah. Actually, the second point is that, in part, the creation of SCA and SDO was motivated by the frustration with the J2EE process. Enterprise JavaBeans (EJBs) and things like that never really took off. Some of the lightweight programming frameworks, Spring and Hibernate, were just taking great chunks out of J2EE in terms of deployment.

Then there was a significant amount of discontent among the Java community around the support for Web services, which is clearly one of the key enablers of SOA. Those three things, plus what Microsoft was doing with the Windows Communication Foundation (WCF), and the work they’ve been doing around it, caused the big J2EE players to think, "Well, actually we need to do something different." That was the motivation.

Gardner: I suppose it’s water over the dam at this point, but perhaps if the J2EE and a variety of Java framework specifications had moved into a standards organization like OASIS five years ago or so, the SOA specifications and the Java specifications could find themselves in the same organization. That seems now not to be the case.

On the other hand, if Microsoft has been the holdout in terms of embracing SDO and SCA, and is focusing more on .NET Framework -- but OASIS was a place where Microsoft felt comfortable going when it came to working with folks like IBM on the Web services standards -- do you think that this might move the hearts and minds of Redmond, Washington toward a bit more SOA compatibility and the programmatic approach to SOA, rather than just the interoperability approach?

Macehiter: My gut feeling is "no." And the reason is that Microsoft has collaborated with the likes of IBM, BEA and others, its historical competitors, up to a certain level up the stack. But the level at which SCA and SDO are operating is at the level where Microsoft has a massive investment, and a significant proportion of its business has been driven out of this at the programming model level.

So, I think it would take a lot for Microsoft to move to support SCA and SDO within the composition framework that they have, which is fundamentally around Visual Studio. Whether we are talking about BizTalk or Sharepoint or Office, it’s all around that programming model, which is tied into WCF and Windows Workflow Foundation. So, I just think the battle line is drawn at that level.

Gardner: What we are facing is perhaps an important decision within enterprises and service providers, software-as-a-service (SaaS) providers, and ISVs as to which role you perceive for .NET playing in Microsoft’s tools and process runtimes. Are they a subset of SOA, or are they in fact the master -- and the rest of the SOA componentry is the slave?

That would be one way of looking at it. The other would be that .NET should be just another spoke in the hub of all SOAs. Jim Kobielus, do you think we are going to be facing this sort of a face-off between the role of Microsoft as the hub or the spoke?

Kobielus: I think Microsoft has gotten much more open to being just one spoke. But I wouldn't use the hub vs. spoke analogy here. They’ve become more comfortable with the notion that they’re just one node in a vast mesh on the Internet in terms of Web services and SOA. So I don’t see Microsoft in face-off mode in the SOA world, or where SCA or SDO are concerned. A couple of years ago it might have been different, but it has changed.

Gardner: How about in terms of the role of their communications, their ESB, WCF (the former Indigo) and the role of BizTalk? It seems as if they are happy to be a spoke on one level, but they’d also like to be where business process is coded and logic is instantiated, and therefore become "the place" where SOA is driven, the dashboard from which SOA is driven.

Kobielus: Well, pretty much every BPM vendor wants to be that hub, that business-process hub, and Microsoft is not alone. Companies like TIBCO with ActiveMatrix, are interesting, because basically what it is doing is it is virtualizing the app server or the integration server, so you can run your .NET logic and your J2EE logic, and so forth in different containers on the same platform. That kind of architecture is more where the industry is going. In that case, TIBCO necessarily isn’t trying to be the one and only integration and logic hub out there. It is simply trying to be the hub of all hubs, but one of the hub of many hubs federated to each other.

Gardner: Is it that you don’t agree with Neil then, that if Microsoft is a bit more ecumenical on this, would we expect them to embrace SCA and SDO? Is that what you expect?

Kobielus: It’s a relative thing -- getting ecumenical. They get ecumenical when they are good and ready, like they’re doing right now in the identity space, with this whole notion of user-centric identities. It’s taken them a couple of years of sitting back, watching things like OpenID and Higgins develop. And then finally they make a token offering that says, “Okay, we’ll implement OpenID in the next generation of the Vista Card Space."

And, once again, my sense is they’re going to wait quite a period of time, at least a year, before they make any public pronouncements on the extent to which they are going to work with OASIS on SCA and SDO. It’s just their nature, and they are going to pursue their proprietary approach, as long as it holds out, and as long anybody will implement it.

Macehiter: I’m not suggesting that this a face-off. What I am suggesting really is that it comes down to the point of control that an organization or vendor has. Microsoft does not want to be denigrated to the plumbing, even if that’s interoperable plumbing. The point you raised about TIBCO with ActiveMatrix is that it’s actually using the SCA programming model in order to provide this abstraction.

So, ultimately in that environment who’s controlling it? TIBCO is becoming the master, and it will be the same in an IBM environment. SCA may be under the hood, but ultimately there will be a point of control that IBM wants to wrest for its process server for its development tools, and that’s what Microsoft wants to do. The challenge is that SCA and SDO are trying to do the same thing as Windows Communication Foundation and Microsoft tooling around .NET and SOA.

Gardner: To wrap up, it seems that it's not a face-off, but perhaps there are, as Jim points out, a lot of vendors who would like to be that over uber-dashboard, point of control. Some are BPEL-focused and others are taking different tacks. SCA seems to be playing a role for many of them, and Microsoft would like to play that role as well -- but perhaps thinks that it has an advantage through the way it’s architected up to this point. The market will, I suppose, determine who the ultimate winner is.

Macehiter: I think a lot will depend how quickly the tooling comes out around SCA and SDO, as an alternative to Visual Studio.

Bell: The other piece too is, as Microsoft tends to build those kinds of capabilities in as part of the operating system, other vendors tend to create them as standalone products and infrastructure pieces. If you are a small company, having it built into the operating system is a value to you, but in large, heterogeneous environments that can be costly to you. So, that’s always been used by Microsoft. If you look at CORBA versus COM and DCOM, it’s the same story.

Macehiter: Absolutely.

Gardner: You’ve been listening to yet another BriefingsDirect SOA Insights Edition, Vol. 15, for the week of March 19, 2007. We’ve been joined by Jim Kobielus, principal analyst at Current Analysis. Neil Macehiter, a research director at Macehiter Ward-Dutton. Steve Nunn, the vice president and COO of The Open Group, and John Bell, enterprise architect at Marriott International.

I'm your host and moderator, Dana Gardner, principal analyst at Interarbor Solutions. Thanks everyone, and thanks for listening.

Listen to the podcast here. If any of our listeners are interested in learning more about BriefingsDirect B2B informational podcasts or to become a sponsor of this or other B2B podcasts, please fill free to contact Interarbor Solutions at 603-528-2435.

Transcript of Dana Gardner’s BriefingsDirect SOA Insights Edition, Vol. 15. Copyright Interarbor Solutions, LLC, 2005-2007. All rights reserved.

BriefingsDirect SOA Insights Analysts on the SOA Consortium's Formation and Goals with OMG CEO Richard Soley

Edited transcript of weekly BriefingsDirect[TM/SM] SOA Insights Edition, recorded March 9, 2007.

Listen to the podcast here. If you'd like to learn more about BriefingsDirect B2B informational podcasts, or to become a sponsor of this or other B2B podcasts, contact Interarbor Solutions at 603-528-2435.

Dana Gardner: Hello, and welcome to the latest BriefingsDirect SOA Insights Edition, Vol. 14. This is a weekly discussion and dissection of Service Oriented Architecture (SOA) related news and events with the panel of industry analysts and guests. I am your host and moderator, Dana Gardner, principal analyst at Interarbor Solutions, ZDNet software strategies blogger and Redmond Developer News Magazine columnist.

Our panel this week consists of show regular, Steve Garone. Steve is a former IDC group vice president, founder of the AlignIT Group, and an independent industry analyst. Welcome to the show again, Steve.

Steve Garone: Hi, Dana. Great to be here.

Gardner: Also joining us is Joe McKendrick. He is a research consultant, columnist at Database Trends and a blogger at ZDNet and ebizQ. Thanks for coming, Joe.

Joe McKendrick: Good morning, Dana.

Gardner: Also, we have Tony Baer. He is a principal at onStrategies, and blogger at Sandhill.com and ebizQ. Thanks for joining, Tony.

Tony Baer: Hi, Dana.

Gardner: Also joining us, Jim Kobielus. Jim is a principal analyst at Current Analysis. Welcome again to the show.

Jim Kobielus: Hi, everybody.

Gardner: Our guest this week is Dr. Richard Soley, the chairman and CEO of the Object Management Group (OMG). Welcome back to the show, Richard.

Richard Soley: Well, thanks for the invitation. I am happy to be here.

Gardner: We're going to be digging into a few items this week, principally to discuss the new SOA Consortium. We are going to learn more about what's going on with that. It’s an interesting approach, combining end-user organizations and enterprises along with vendors to promote adoption and, I suppose, further definition of the scope of SOA.

We’ll also be discussing some of the events at EclipseCon, wrapping up for the week of March 5, 2007.

Gardner: First for those of our listeners who are not familiar with the greater details of OMG, why don’t you give us the elevator pitch, Richard, on OMG, its mission, and where it’s headed?

Soley: Sure, the Object Management Group is an 18-year-old consortium of software users and vendors, academics, and a growing number of government institutions focused on delivering standards to make interoperability and portability a reality. We were founded in 1989 focused on object technology, later grew into distributed object technology, and were best known for the first few years for our Common Object Request Broker Architecture (CORBA).

In 1997, we moved in two new directions; one being the adoption of a unified modeling language with the clever name, Unified Modeling Language (UML), and also into vertical markets -- originally healthcare, finance, telecommunications, and manufacturing, although we are now in about 25 different markets, everything from robotics to regulatory compliance.

In 2000, we actually leveraged that modeling technology and made it the base technology for all of the efforts that we have under way. So, we defined business models and software models, and, in some cases, even hardware models and process models.

The next big leap came in 2005, when we merged with Business Process Management Initiative (BPMI.org), so that now all of the modeling languages from meta modeling languages like Meta-Object Facility (MOF), to business modeling languages like Business Process Modeling Notation (BPMN), to software modeling languages like UML, and systems engineering languages like SysML are all in one place. That’s been our focus, but looked at from another dimension, what my staff is really good at is getting competitors to agree on things.

We have been doing that at OMG for 18 years with, at this time, between 500 and 600 member companies. We were approached by a group of 11 companies to create a community around SOA, an advocacy group, not a standards group, which is why it’s separate from OMG. We strongly believe that SOA isn’t a technology at all, but rather an approach to achieve business agility. It’s not a technology, but rather a business strategy.

Gardner: Well, it certainly seems to fit in well with the heritage and the direction that OMG has taken. This is really an industry development that’s ready-made for many of the values that you bring to the table.

Soley: I appreciate that and I think that’s fair. But it’s important to understand that this is not a standards organization. There are plenty of organizations focused on SOA standards and, in fact, OMG is one of them. Let’s get this straight upfront -- we are going to pronounce it SOA (So-wah) from now on, because, otherwise you can’t say, "SOA what?"

Our SOA group at OMG has been focused on modeling SOA, modeling for software assurance, and modeling for software producibility, and so forth. At the other end of the spectrum, you have organizations like W3C and OASIS that are doing a great job designing the protocols and languages at the pipe level -- how do we connect the systems together?

That hasn’t been our primary focus in over a decade, so we are not in that space, but the advocacy group is exactly that. It’s an advocacy group. How do we help the CIO? And, we call this "Corner Office SOA." How do we help the CIO get the news across to the rest of the C-suite that this is not a technology but a business strategy, and a business strategy that can deliver agility and a better bottom line?

Second, "Ground Floor SOA." How do we help the enterprise architect, the domain architect, the data architect get the word across to his alter ego in the line of business that this is a business strategy and not a technology and it’s something he needs to pay attention to?

Gardner: Back on Feb. 12, the SOA Consortium announced its formation of this advocacy group, and it’s quite a nice mix of organizations. You’ve got such enterprises as Avis, Bank of America, CellExchange, WebEx -- I suppose WebEx [now part of Cisco] is a vendor, but probably could be both -- and then we’ve also got some very large influential vendors, BEA, Cisco, IBM, SAP and HP.

Tell us a little bit about what the goal of this organization is -- combining, I guess, the constituencies of the end-user issues and vendor issues. You’ve had some of these closed-door summits over the last several weeks to come up with a charter. Tell us what you can about what took place at these events and what is shaping up as the charter, given you’re straddling the fence between the user and vendor organizations.

Soley: It’s important first of all to note the mix of users and vendors. We are currently running 3-to-1 end-users to vendors, and that’s because the focus is on this advocacy activity. It’s not on whose SOA infrastructure we should buy and "Our Web service is cool," or any of those questions. I am guessing that we are actually going to be more like 5-to-1 or 10-to-1 end-users to vendors eventually, but, as you can see, on Feb. 12 four vendors stepped up to the plate to fund it and get it off the ground. They were BEA, Cisco, IBM, and SAP. As an old consortium hand, I listed those in alphabetical order.

You also saw, as you said, some very dedicated end-users who have ideas about how to get the idea across to the lines of business that this is not a technology play, but a business agility play. Some you didn’t mention, for example Wells Fargo, and, of course, Object Management Group ourselves are a member, as well as the Integration Consortium. So, that’s another differentiator from OMG, which is about half end-users and half vendors. We expect that the SOA Consortium is going to weighted toward end-users, although there will be a couple of sponsors joining.

Gardner: So, with this predominance of users, what do they say? What do they want your organization do for them?

Soley: Number one, they want to be truly vendor neutral. Over the last two years, there have been various alliances of vendors saying, "We have created this" – their usual common phrase is -- "SOA alliance to help our customers understand the products in the SOA space." That’s wonderful. That’s all well and good. That’s how the industry works.

But you notice that there are always one or two vendors and one or two of their top customers. This is four major vendor-sponsors, a couple of more that are participating and might be sponsors later, and a lot more end-users, because what they are looking for is understanding the business strategy, not trying to decide which product to buy to "SOAfy" their infrastructure. That’s a very important differentiator.

They are not building reference models. They are sharing case studies. For example, our enterprise architects and our community of practice is showing case studies of success stories and, more importantly, failure stories, best practices, what works, what doesn’t work? We have even had sessions on how to influence project managers and product managers in the line of business to understand business strategies in general, rather than think of us as “the guy who fixes my Treo.”

We received a lot of feedback from CIOs and CTOs during the [early] summits that said this is very important. We had a Fortune 100 CIO who came into the New York summit. This person is CIO of a multi-billion dollar travel organization, and the opening gambit that we heard was, “Look, this is just a technology play, and if one of my technology guys hadn’t told me I had to be here, I wouldn’t be here. I’ve already told the CEO that SOA is a technical thing, and we’ll take care of it.”

At the end of the summit, this particular CIO stayed an extra half hour and said, “The most important thing I learned is that I can now understand how I can position this as -- rather than a technology play -- a business agility play. That will support the efforts that I am making to make our business processes understood, to write them down in a way that’s reusable and discoverable, and in a way that I can make them more efficient. And, I am going to go back to the CEO and say it’s not a technology play.”

[Editor's note: More news has come from the SOA Consortium since this podcast recording.]

Gardner: Well, this gentleman obviously had not been listening to our podcast series. Let’s go to the panel.

Steve Garone, we’ve talked about advocacy and evangelism, and the intersection of the business and technology values around it for quite sometime now, and we’ve mentioned that politics is an important aspect of this cultural shift. Do you think an advocacy group like this is a good thing for the politics, in terms of getting people on the same page? And, what would you pose as some of the necessary ingredients for success for an activity like this?

Garone: It’s a great question, Dana. First of all, Richard, that sounded like a great case study, and certainly makes the case that this group is going in the right direction. The issues that seem to surface come from two directions. One, and I know, Richard, from some of the information I’ve seen in this alliance, that you guys have considered this, is that many organizations that have gone through some SOA activities up to this point. These have focused primarily, and in some cases exclusively, on cost saving and not business agility. Getting that message across I think is a very important issue, in terms of getting acceleration around SOA adoption.

Obviously, it's very important to convince the higher-ups within an organization that this is something that they can benefit from, from a business standpoint. One of the key issues also is that there tends to be sort of a push-pull, or a lack of communication and understanding, between the business functions within an organization, and that, from the line of business standpoint, can certainly benefit business agility and the IT folks. Of course, there's been a lot of activity around tools, standards, and technologies to help bridge that gap, but I think it’s still a pretty important issue. So, those are the major areas that I would look at, and it sounds like you guys are addressing them to some extent.

Soley: The first is a very important issue for us, and second is a really tough one to get past. IT has traditionally focused in most organizations on what are the right tools to achieve what lines of business are telling us we need to achieve. Sure, there are going to be tools and there are going to be technologies and there are going to be frameworks to help you implement the SOA strategy, but it’s the other way around. It’s "What is it we need to achieve?" And, what we need to achieve is fairly easy to explain, right? What we need to achieve is capturing business processes, so that we can find them, so that we can make them more efficient, and so that we can reuse them -- and this is nothing new.

What’s new here is the message that we are not just talking about workflow. We are not just talking about processes that can be automated. We are talking about any of the processes, especially customer-facing, but any value-chain processes within the organization that we might want to reuse.

Gardner: I'd like to encourage any of the analysts to kick in with their questions. I'd just like to start off with a quick one. Richard, one of the things we come up against a lot, when we talk to our guests and we examine some of the events that are unfolding, is complexity.

People are baffled in that there’s just so much, and the more you dig down, it seems daunting. It seems difficult to manage things horizontally, and therefore you relegate it to projects and pilot types of affairs. Is there anything that you expect to be doing through an advocacy role, inasmuch as you understand and are participating in this, that can deal with helping people manage the complexity issues for SOA?

Soley: You know, that’s a great point. I would like to answer in two different dimensions. First, as you can see, we are making top-down advocacy the core of what we do. If you start with your developers and try to work your way up, you are not going to change the way that company thinks about business process, and you are not going to have an effect on business agility. So, that’s why we're having the CIO Summits. And we will be continuing to do those.

Starting in June we are planning on doing them quarterly with a small number of CIOs and CTOs, government agencies, large corporations, as well as non-governmental organizations (NGOs). We actually had an NGO participate in our San Francisco event. We'll use those events not only to make sure we stay on track, but also to get the word out about what we are trying to do here, which is a top-down focus on business process and business agility.

By the way, that’s working. The participants at the events we had were very enthusiastic about the consortium. There was active participation throughout the sessions. In fact there was so much interaction that the round table discussion, which was supposed to be after the presentation, was embedded within SOA Consortium presentation at every stop. So, that’s one, and I’ve lost the thread for the second. I should have written it down.

Gardner: That it was kind of complex.

Soley: Yes, there is complexity involved in capturing the business processes in a way that makes them reusable and discoverable and to make them more efficient, but you always are going to have that complexity, and the question is, "Where is the complexity best spent? Is it best spent upfront, so that I’ve got a description of the process that I can reuse, find, and make more efficient, or is it best spent by the people trying to implement the process, looking at an ambiguous description of a process, in, at best English, and trying to figure out every single time, what in the world it means?"

I would rather do that once, capture it upfront in a rigorous fashion, rigorous both from the standpoint of how it’s captured a formal language, but also the way that it’s captured, having the methodology in place -- spend that extra money upfront and have the savings every time the process is carried out and reused.

Gardner: Anyone else out there have some questions for Richard?

Kobielus: There’s definitely a value for an advocacy organization like this to spread best practices regarding SOA and SOA deployment and management. You mentioned that one of the functions of these – for lack of better term, dog and pony shows -- meetings in various cities is for the CIOs to share both the success stories and the failure stories regarding SOA deployment. How eager are CIOs to share their failures and their screw ups in implementing SOA?

Soley: You saw how carefully I didn’t mention even the gender of the CIO who made that comment in New York. I will admit there was one time we had to turn off the tape recorder, which we were using just to have notes so we can get the quotes right later on. They are willing to share. We find this at the level of CIOs and CTOs, as well as at the level of enterprise architects. They are willing to share failure studies, if they have the safety and security of knowing they are not going to be quoted, it’s not going to be on their performance reviews, and they know that others in the room are going to do the same.

Listening to one of these stories, actually it was in San Francisco, gave me an instant flash to my kids high school in Lexington, Mass. It blew me away the first time I saw this. There's an enormous board in one of the major cafeterias. It’s labeled "The Board of Rejection," and all the kids post their rejection letters up there, and I thought, "My God. I never could have done that 30 years ago, when I was graduating high school."

But kids write notes on them and say, "They don’t know what they missed," and "You’ll get accepted somewhere else." And, they really help each other out. I think they all understand that failure stories are just as important as success stories. In fact, more important, because it’s very difficult to justify cost savings. It’s far easier to justify increased revenue. So, they do it and I will admit that the enterprise architect level folks do it more readily.

Kobielus: Which leads me to another question, I am looking at the initial membership of the SOA Consortium and I don’t see any consultants or a professional services firms.

Soley: Yes, systems integrators (SIs).

Kobielus: Those are the folks who see the broadest range of SOA implementations, successes and failures and they themselves quite often are a key component of those successes and failures. Why don’t you have the SIs involved in the consortium?

Soley: That’s a great question. In the three weeks since we’ve been live; you are only the second person to think of that. So, well done. In fact, amazingly, the entire idea for these summits was from one of the big four, a very active person who has been participating in all of the meetings. Unfortunately, their entire management restructured the day the membership agreement was supposed to be signed. So, we are talking to all of them obviously, and, in fact, unsurprisingly, IBM is participating from two different parts of the house, and one of them being, whatever IBM Global Services is called -- today is Friday, so it must have a new name.

I expect to be able to make an announcement about another major one in the next couple of weeks. We are talking to all of them. Come along to a meeting. Maybe you will see the one that I am talking about, but I really shouldn’t mention them until they can get their own processes back in order and get involved. It was really depressing to have this gentleman come to all the meetings, actually lay out the entire structure, idea, and plan for the CIO Summits and then not be able to participate in them.

Kobielus: I'll bet it was frustrating.

Soley: It was very extremely frustrating for me and I think intensely frustrating for him.

Gardner: Seeing these individuals participating in the sharing back and forth of stories, methodologies, and lessons learned, sounds a little bit conceptually like an open-source project. I didn’t see in the initial release any mention of some of these SOA open-source projects involved, whether it’s SOA Tools Project within Eclipse, or Tuscany within Apache, or some of the success in the field, such as ServiceMix. Is there a role for open-source projects within this consortium?

Soley: I'm going to go out on a limb here. Didn’t I say SOA is not a technology? When I hear "SOA tool," or "SOA development tool," or "SOA testing tool," I have to wrap my mind around that, because SOA is not a technology. It’s a business strategy.

So, I think what you really mean is "tools for implementing processes that are defined using the SOA approach." These are tools for testing implementations of processes that are defined using a SOA approach. If what we're talking about is business strategy, then software is an implementation technology. It’s not the strategy, right?

Gardner: Well, they still have a relationship?

Soley: Yes. So, let’s look at any of those. Commercial products, by the way, are no different. They implement processes that are defined by a methodology that’s part of your SOA strategy, or maybe they help you implement the methodology itself. There are tools to do that as well, and some of those are going to be open source and some are going to be commercial. There is definitely room for participation, and these vendors that have put money into the creation of the SOA Consortium obviously want to sell products and services. The good news, however, from the point of view of the end-users is that the purpose of the organization is not to help them decide what product to buy.

I will tell you, sitting around the table, enterprise architects share experiences of which products have worked for them and which haven’t, and I have seen marketing reps from our vendor participants scribbling down notes, because they want to sell more product -- and more power to them. I'm a capitalist. But whether it’s open source or commercial, software is an enabler, software is an implementation technology, but it’s not a business strategy.

Garone: I wanted to follow up on Dana’s question, because I was thinking in the background as you were talking about what the Consortium is actually doing and who is participating. Given its charter, what's in it for the vendors and how they are participating, if, in fact, this is not about generating standards that all the vendors can leverage, and it’s not about selling product, which of course it shouldn’t be and it isn’t?

I am sure that they get value out of being there, out of being in front of CIO’s and other end-users, out of taking notes, as you said, learning where their products are selling and where they aren’t. But I'm interested in the mechanics of how they participate, what they bring to the table, and how they interact with the CIOs in a way that brings them benefit?

Soley: First of all, I should mention that at the summits none of the vendors were allowed. In fact, none of the members were allowed. They were run as focus groups, because we wanted the CIO-level executives to be able to talk completely openly about their case studies, their success stories and failure studies as well. And, we wanted their honest feedback on the organization. So, no one else was in the room, except for the executives that were able to come and two OMG staffers, including me and Brenda Michelson from Elemental Links, who is the consultant who put together the vision-mission strategy goals and tactics document. She then presented that to these executives and then ran focus groups to get results and is now finalizing those documents, which we call the core documents about the organization.

The vendors have been in the room at all the other meetings, of course, and they have their own SOA strategies to implement and their own business processes that interest them, but there’s money coming from marketing departments and they want to get out in front of these users and say, "Look. We are leaders in this field, we understand how to implement an SOA, we have tools to help you with the implementation of your architecture, and we have run-time executables to manage the implementation."

Those go from anything such business-process description languages as BPMN to capture business processes, SOA governance product for keeping track of what processes you have, and making sure they follow the corporate rules and implementation of technologies.

It's no surprise that IBM mentions WebSphere, and that BEA mentions WebLogic and AquaLogic, and so forth. The group from Cisco, for example, the AON group, is all about capturing SOA and implementing it on your network. The group from SAP is changing completely the way that they implement their own products and integrate them with the other products they find in their customers, to be able to say to their customer base, "Look, we are leaders in SOA and one of the proof points is that we took sponsorship positions in the consortium."

Gardner: You know, Richard, one of the problems that we have encountered in the field around SOA is that it’s hard to measure success. There are long-term and soft-types of implications, and I suppose that the same could be said for something like this consortium. How do you measure the success of what you’re doing and have you put any milestones out there for what you'd like to attain?

Soley: That's an extremely good point, and actually one that came up at every single one of the executive summit events. We worked on that for a long time and came up with the loosey-goosey measure of self‑identification.

So, the overall goal, which you see on our Website, is 75 percent of the global 1,000 self identify SOA successes by 2010. There is an asterisk that mentions that we are also talking 50 percent of medium‑sized businesses and 50 percent of major government agencies. Because we couldn’t pull some measure of success off the shelf, we went with self identification, and at every single one of the summits we were told, "No, you are going to have to try harder. You’re going to have to deliver some metrics of success."

I don’t have any for you today, but I can tell you that that is something that we got very clear direction on from the CIOs and CTOs who participated in the summits. Also, they wanted us to look specifically, for example, at connections between SOA and Lean, Six Sigma, and ITIL best practices, all of which have metrics of maturity and success.

Gardner: Any other questions?

Kobielus: I think the industry is looking at the SOA Consortium or OMG to be a third-party certifier -- maybe that’s overstating your mission -- of enterprises' success or lack thereof in implementing SOA. So, it’s the extent to which you are going to be mapping these SOA best practices back to such recognized frameworks as ITIL, Six Sigma, and so forth that would be essentially what the industry is looking for you guys to do -- to catalyze that kind of mapping.

Soley: Yes, that’s a very good point, and, Dana, I thought you said that I wasn’t going to be get any hard questions.

Gardner: Sorry.

Soley: The SOA Consortium is looking to not only OMG, but other standards consortia, to deliver standards, mappings, and validation endorsement certifications where appropriate. In fact, it’s in the mission statement that the SOA Consortium is not a standards organization, but it will deliver requirements to standards organizations and where we were talking about modeling things, those requirements would be handed to OMG.

One of the 10 largest banks in the world sent an executive to one of our meetings, and this person said, that all they care about in terms of metrics of success are Lean and Six Sigma, so we're going to need to connect SOA to that world in order to be successful at that bank. I think that’s part of it, but there’s more than that. There are going to be metrics that are not yet in the stack when you fly through the ITIL, Six Sigma and Lean documents.

OMG, as it happens is moving into the direction of maturity models anyway. We are just starting work on a business-process maturity model. You may have read about it. It’s not a standard yet, but it was just starting. What were talking about is a maturity model for business process adoption that measures organizations and their ability to capture business processes. That’s very strongly related to SOA, but again, that’s a standard and belongs in OMG and not in the SOA Consortium.

Kobielus: One last question. Are you developing a maturity model for master data management (MDM)?

Soley: First of all, the SOA Consortium wouldn’t be delivering any maturity models at all. OMG has never delivered maturity models before, although we’ve expanded many times over our history, which is frankly why I am still there. This is a new area for us. We have to learn not only how to deliver the standard that specifies business process maturity, but how to deliver that, which means how to certify people, so that they can certify organizations at the five different maturity model levels that we are contemplating. So, no, we have never delivered any other maturity models and although there are lots on the books as potentials, let’s wait for 2008 to see what develops.

McKendrick: You talk about the SOA Consortium, and there’s a lot of discussion about business process management (BPM) and SOA. Obviously, these two areas need to converge as we go forward. As I have heard and seen, though, over the years, especially in recent years, that the BPM professionals and the IT or the SOA professionals tend to be in two different camps and kind of follow their own separate sets of disciplines. It would seem a challenge from the perspective of the SOA Consortium in bringing these two camps together. Do you see that as a challenge?

Soley: You bet, but that’s one of the results that we learned during the events. We are very worried about that. Obviously, I strongly believe that BPM -- and now I am not talking about technology, just managing business processes -- is a key part of the SOA business agility message. I also believe that BPM technology, like our own BPMN standard, implemented by 40 some vendors, is a great way to capture business processes. But, we have been worried since day one that you’ve got your business process owners, your Six Sigma experts, and business process offices in companies, and they seem to be different from the IT definition of BPM.

One of the things that we heard in every event from all the participants is that the CIO and CTO participants did not artificially separate SOA and BPM by the underlying technology. They see business processes and services tied to a cohesive enterprise architecture foundation as a major message of SOA. That message has been received at the high level, and what we have to do is help the C-suite, get the message down into the lines of business and down into the IT organization, that a business process viewed as a methodology by business process improvement office and business process viewed as a business process notation in the IT departments are the same thing, and they ought to be working together more closely.

Gardner: Great. Well, thank you, Richard. Obviously, there are so many constituencies involved inside of organizations, and then also involving their communities, and there are vendors that are herding the cats, as it were, toward SOA as a worthwhile, important, and difficult activity.

Soley: Yeah, no problem, though. These are cool cats.

Gardner: I wish you well. Moving on to our second subject, I just came back from EclipseCon in Santa Clara, Calif. [in March] and there were few announcements there I would like to go over quickly. Tony, you wrote about the Oracle move with its Java Persistence API. Tell us very quickly about that.

Baer: Well, it’s been an interesting strategy, because the fact is that Eclipse was initially known for IDEs, and Oracle with JDeveloper is one of the few major Java players, outside of Sun, who is not migrating its IDE to Eclipse.

In the past year or so, Oracle has been involved in a number of Eclipse projects. I think putting its feet in the water. What’s interesting is that they are now ramping up to board level by saying, "No, we are not going to IDE. We are going to instead work on Java persistence and essentially they are trying to coalesce it around top tier, which is their implementation of the Java Persistence API.

It’s actually the update of what is essentially about a 10-year-old product, and what the interesting thing is not so much what Oracle is doing, but it’s more reflection of Eclipse saying, "We’re more than about IDEs."

Gardner: This is runtime material, right?

Baer: Exactly, and that begs the question that I have asked the Eclipse folks as well. If you’re not just IDEs, which is what we’ve associated you with, what are you? What is your mission, and where do you draw the bounds on it? Their answer to that was, "Well, we didn’t initially form ourselves to develop an IDE. It was the idea of trying to be a proof of concept to show that you can have an extensible framework to this plug-in model."

Gardner: Around OSGi?

Baer: Well, OSGi came later. They initially tried their own plug-in model and realized, "Why are we re-inventing wheel?" OSGi just happens to work. The whole rest of the field just discovered OSGi, kind of by chance, in the same way that all the AJAX folks discovered you can use Java Script, XML and a whole bunch of other stuff together and get rich clients on the Web.

That was not the original intent of OSGi. It was supposed to be basically a home box, which would essentially Java-enable your toaster or refrigerator, and we can see how far that’s gone. But, what we have found is that it’s actually a very effective, hot-swappable component model. So, that’s what Eclipse has really capitalized on, and they are seeing that as being some of their proofs of concept to say, "Now, let’s see how far we can take this."

Gardner: I had two take-a-ways, one was that this seems like mission creep for Eclipse, that they are getting more into runtime, and not just on the client with their rich-client platform, but now, increasingly on the server. The second thing was this. Oracle, as a major vendor is going to be driving a lot of the innovation around this project. The proposed project under Eclipse has moved the project in the sense out of GlassFish and around the Java community, and they will keep it as a Java reference implementation. But the innovation will be happening at Eclipse. And then any of the changes will only then move downstream into Java.

So, my take-a-way was: one, mission creep for Eclipse into runtime, but secondarily some diminishment of the role of the Java environment for innovation. Anybody have reaction to that?

Kobielus: Actually before everybody else jumps in, I just want to top that. You have mission-creep for Eclipse, and it sounds like you could also say "mission accomplished" for IBM, because I think one of the original goals in getting Eclipse going was to essentially move the center of gravity in the Java world away from Sun.

Gardner: That seems to be happening, doesn’t it? Richard, what do you think of that?

Soley: This goes back to the conversation we were informally having at the beginning of the call, about mission creep and expansion of Eclipse goals, and where the organization goes. I think there’s sufficient demand in all of these areas, that some organization has got to get their arms around it and deliver. As long as that delivery happens, I think it’s the right thing for the user base.

Gardner: I'm not sure I understand.

Soley: Whether it’s commercial or open source -- and you hear me say "whether it’s commercial or open source" a lot -- you need product that delivers against a user requirement. My response in this was something I was saying earlier to Tony’s note this morning about results of EclipseCon is that expansion of mission is perfectly fine as long as you continue to deliver on each of the elements of that mission.

Gardner: Well, one thing I can tell you as an observation is that this is a very energetic environment. A lot of developers that had the feel of what Java 1.0 was about seven or eight years ago, and many, many vendors that I speak to, recognize that the Eclipse community is a force to go with and not to ignore. Many of them are creating plug-ins -- be they commercial or open source -- in order to ride the marketing machine that the Eclipse involvement has become. So, this is something that’s got a lot of momentum, and at a time, as I think Tony pointed, out that Java is losing momentum?

Soley: You can’t have both of those at the same time, right? A big message of Eclipse is the Java message. Eclipse supports other programming languages as well, but the success of Eclipse is the continued success of Java. So, let’s be fair.

Kobielus: One thing we have to distinguish is Java versus the Java community process. I think that’s really what they’ve meant.

Soley: Okay, fair enough.

Gardner: Where did the innovation take place? Is that kind of the point?

Soley: The open-source model has proven to be a very successful one in the Java community.

Gardner: Well thank you everyone for joining, we’ve had an interesting discussion, and again I want to wish the SOA Consortium well, and OMG as a participant in that. I guess you’re taking a leadership role in this Consortium. Is that fair?

Soley: I am the executive director of the consortium, yes.

Gardner: Well, thanks everyone. We’ve been talking again about SOA, your SOA Insights Edition, Volume 14; our guest has been Dr. Richard Soley, chairman and CEO of OMG. Thanks for coming, Richard.

Soley: No, thank you for arranging. It was a pleasure, Dana.

Gardner: Also joining have been Steve Garone, Joe McKendrick, Tony Baer, Jim Kobielus -- thanks everyone for joining. I am your host and moderator, Dana Gardner. Thanks for listening.

Listen to the podcast here. If any of our listeners are interested in learning more about BriefingsDirect B2B informational podcasts or to become a sponsor of this or other B2B podcasts, please fill free to contact Interarbor Solutions at 603-528-2435.

Transcript of Dana Gardner’s BriefingsDirect SOA Insights Edition, Vol. 14. Copyright Interarbor Solutions, LLC, 2005-2007. All rights reserved.

Transcript of BriefingsDirect Podcast on UPS's Solutions for Supply Chain Visibility

Edited transcript of BriefingsDirect[TM/SM] podcast with Dana Gardner, recorded April 17, 2007.

Listen to the podcast here. Sponsor: UPS.

Dana Gardner: Hi, this is Dana Gardner, principal analyst at Interarbor Solutions, and you're listening to BriefingsDirect. Today, a sponsored podcast discussion about visibility into supply chains and distribution networks. It’s about effective information-sharing across the spectrum of transportation options and during the distribution of goods.

"Do you know where your stuff is?" is the big question and, most importantly, "Do your customers know where their stuff is?"

Helping us to sort through this important area for ecommerce and for small- and medium-sized businesses (SMBs) and their retail operations, we have an expert in the area of supply chain management. We are joined today by Jim Rice, director of the Integrated Supply Chain Management Program at MIT. Thanks for joining us, Jim.

Jim Rice: My pleasure.

Gardner: We also have Stephanie Callaway, director of customer technology marketing at UPS in Atlanta. Hello, Stephanie.

Stephanie Callaway: Hello, Dana.

Gardner: We also have users and practitioners of this emerging art. Frank Deen is the shipping manager at Rackmount Solutions in Garland, Texas. Hello, Frank.

Frank Deen: Hello, Dana.

Gardner: And lastly, joining us from Saline, Michigan is John Schaffer, president of TrueWave, the distributor and creator of the Wadia line of high-end audio products. Thanks for joining us, John.

John Schaffer: Glad to be here, Dana.

Gardner: As I mentioned, this visibility issue is a part of the information revolution and the knowledge economy, whereby at some point either folks who are end-users buying goods or folks in the distribution channel are looking for reductions in cost, efficiency improvements, and reduced time to distribution -- all of which can substantially reduce the total cost of an overall production and distribution activity.

I want to go first to Jim Rice. Jim, help us understand the state of the art here today. What are we talking about in terms of business drivers and technology drivers in this search for higher efficiency and distribution?

Rice: Thanks, Dana. Let me start by talking about the business drivers. If we were to ask companies and leaders what their concern was, they would be talking about a number of things. They'd be talking about continuity -- business continuity. We saw that destructions like Hurricane Katrina and 9/11 caused a lot of companies to start recognizing that their supply chains are genuinely at risk.

A lot of vulnerabilities were always there, but weren’t very apparent or evident. So, there's a fair amount of recognition about this vulnerability. Right now, there is some work going on in that some companies are planning to make their supply chains more resilient and trying to actively manage risks.

Similarly, companies are aware of security as an issue, although many are talking about it, but aren't taking much action. In part, that's because it’s very difficult to show a return on investment from security investments. The trick question is, "What happens when supply chain security investment is successful?" Of course, the answer is "nothing," because it prevents something from happening.

The companies are concerned with optimal supply chain design, and this takes in the aspect of outsourcing. How much outsourcing do we use? How much of that do we even think of putting offshore, trying to reduce cycle time, cost, and uncertainty in the system? That will ultimately enable them to be much more responsive to spikes and drops in demand.

Companies continue to squeeze their supply chain to lean it out, and make it more efficient and more effective. There are a lot of drivers in the industry right now that affect the price of sundry industries differently.

Gardner: We want to have this clarity in the best of times and also in the worst of times. Is this essentially a data integration and availability exercise? What are the core issues to enable folks to get the information they need about supply-chain activities?

Rice: It’s not just about data, but certainly data is a central and a critical issue.

A lot of it comes down to having relationships with customers and suppliers. They would be open and free to share the information that ultimately will help both organizations to make better decisions, reduce uncertainty in the system, and take out some of the cost and uncertainty. That makes the system potentially much more efficient.

Gardner: I suppose this has to do with levels of trust. There are interdependencies -- "You help me, and I help you" -- in terms of making the customer at the end of the process happy. How has that gone? Has there been trust? Have people recognized a quid pro quo and have they been willing to share?

Rice: Yes. I go back to that quote by Ronald Reagan: “Trust, but verify.” There’s certainly some inherent trust that exists between individual parties, and there maybe some trust that exists over the long term between organizations, but ultimately the trust is backed up by systems or processes that enable regular engagement coordination. They are backed up by contractual agreements, or at least agreements in principle, whereby one party is going to make the other party whole in the event of some disruption or some eventuality that they hadn’t planned for.

Gardner: Before we go to UPS to learn about some of the things they are doing, what should we expect in the future? Is this a mature and fully baked technology and business approach, or are there more efficiency, visibility, and innovation to come?

Rice: I think we are just on the cusp of lots of great potential. I can’t tell you whether the potential will be realized tomorrow, next year, or in five years, but I think we are getting really close. Probably as far back as 10 or 15 years ago, you had some pundits who were saying, "Oh, in the future our systems will be fully integrated and completely synchronized." It hasn’t happened yet to a large extent. There are isolated instances. Some individual companies have demonstrated the capability of being synchronized, organized, and coordinated.

Some of these capabilities are becoming more readily available for large companies, and hopefully in the near term, to small- and medium-sized enterprises. The challenges aren't simple, but I think there are some tools and processes emerging that are going to make this much more possible in the future, and therefore get us a little closer to that Nirvana of the synchronized supply chain.

Gardner: Thanks. Let’s go to Stephanie Callaway at UPS. Stephanie, you’ve heard about the need and desire for looking for data and visibility in the best of times and the worst of times. UPS sits in a very advantageous position between all these players. Tell us a little bit about what’s been going on for the last several years to try to improve on this activity?

Callaway: Okay, Dana, thanks for having me. UPS started with tracking on the Web in the early '90s and since then we have evolved our portfolio to include a broad set of visibility solutions that address the very diverse needs of our customers.

Today, we support tracking in 63 countries, and that serves the basic visibility needs of our shippers, receivers, importers, and exporters -- both residential and commercial. Our emphasis today is on more than our traditional U.S. small package business. That's available outside of the U.S., but we also provide visibility through tracking to our UPS Freight, Air, and Ocean Freight Services.

Gardner: Jim mentioned about this trust issue for verification? Have you been playing a larger role in trying to broker these relationships or get people to shake hands and agree on visibility?

Callaway: From the perspective of our relationship with our customers, we provide full visibility of shipment status from the time they tender their package to us to the time it is delivered to their customer. We have other visibility solutions, such as Quantum View, that provide proactive information, even when the package encounters trouble along the way. Whether it’s a weather delay or an incorrect address, we can provide that information proactively to our customers, so that they can provide that information to their customers and improve customer satisfaction.

Gardner: So, you are the picks and shovels, and your customers are out there mining these relationships. Tell us a little bit about small- to medium-sized businesses in particular. Is this a high-growth area for your goods and services? Where in the whole business spectrum are these things being used the most? Then, secondarily, where do you think the larger uptake is in the future?

Callaway: Customers of all sizes take advantage of our visibility portfolio. I mentioned tracking on the Web. Even with tracking, some of our customers prefer to integrate that information into their own Web sites. We have XML tools that customers of any size who have an IT organization can take advantage of to integrate information about package status into their Web sites.

We also have this suite of Quantum View solutions that can be used by customers of all sizes. Typically, smaller customers who don’t have large information technology (IT) functions or large IT budgets would take advantage of our ready-to-go solutions, like Quantum View Notify, which is an email notification. Customers can select that at the time of shipping, and proactively notify their own customers about important shipping events, such as exceptions and deliveries. That helps them save time and increase customer satisfaction by reducing the number of calls that they receive.

We also have Quantum View Manage, which is a visibility dashboard that customers of all sizes can use to see where their packages are in transit. That would be any packages they are shipping out, any that are coming into them, or any that they’ve paid for, along with some special capabilities to help importers with compliance.

Gardner: Without going too far into the weeds on application development and integration, Web services and APIs, and that sort of thing, it sounds like you’ve got a spectrum of approaches for those who aren't interested in getting into too much of the technology, perhaps using the email alerts approach. I imagine you also will allow for those who do have application developers at their disposal to bring in the visibility benefits, and mash-up your tracking, information, and data services right into their portals for self-help and for customers to track what’s going on with their retail purchases. Is that right?

Callaway: Exactly. As I was saying earlier, we believe we have to address a broad set of diverse customer needs. I mentioned the online tools for tracking, but we also have Quantum View Data, which lets data about package status information flow proactively from UPS to customers. They can integrate that however they see fit into their own internal applications, whether it’s for their own use within their customer-service department, or whether they want to proactively share that with their customers.

Gardner: I suppose as a customer or a partner, you’re elevating yourselves to an information-sharing value, not just the logistical and transportation value?

Callaway: That’s true, and our customers expect that of us.

Gardner: Okay, let’s talk to some customers. Let’s go to Frank Deen at Rackmount Solutions. First, Frank, tell us a little bit about Rackmount, the history of the company and what you do.

Deen: Dana, we started out about five years ago as strictly an Internet company. We sell racks for IT solutions, file servers, and different types of peripheral equipment that goes into IT rooms. We ship those all around the country. Our business has grown to the point where we have a warehouse here and stock quite a number of the items ourselves, but because of the magnitude of the type of things we sell, we ship from probably a dozen locations around the country, depending upon what the item is.

If the quantity someone is purchasing makes it impossible for us to ship it from here, we have to have it drop shipped. That, in itself, has been a challenge, because our shipments are going from so many different locations. We are usually selling to people who come in over the Internet or call us direct, so everything we have does get shipped out. Being able to track and know where our packages are is very, very important to us.

Gardner: So, you have been managing fast growth. People have been building out data centers and modernizing their infrastructure for their IT departments. You’ve also been dealing with complexity in terms of the number of points that you are distributing from and the number of points that you are trying to get your things to. Specifically, what sorts of visibility services have you been using to manage this high growth and complexity?

Deen: Initially, when we started doing this, because we were shipping from so many locations, even though it was being shipped on our account, we would have to contact each one of those shipping points, each warehouse, each manufacturer to get tracking numbers to send to our customers. Of course, now we are able to have that information sent directly to the customer when the product ships. They get an email with that information.

Plus, on Quantum View, we are able to pull up a report every day that shows everything that has been shipped out on our account, whether from our local warehouse or any of those other locations. We're able to have that tracking number and see the exact progress of that package -- when it was picked up, where it’s at currently, when it’s expected to be delivered, and the address that it’s expected to be delivered to. When a customer calls and asks a question about it, we are able to go to that and immediately give them an answer that provides a comfort level that we are keeping track of their merchandise that they are waiting to get.

Gardner: So, using some of the UPS services, you're giving your call-center folks visibility. When they've got hopping-mad customers saying, "Where are my goods? I've got to build out this data center. I need these racks," you’ve given visibility to your call center, but do you take it to the next step? Do you have a Web site where these people can track their own goods? How does that work, when you face too much cost and too much traffic into your call center?

Deen: That really hasn’t been a problem for us. The fact that they have the information themselves, the tracking numbers, all customers can go in and do the tracking and look at it themselves. That has reduced the amount of calls that come into us, because people are able to see that.

The other issue is that with Quantum View, we are able to find out quite often if there is a problem with the outgoing package, and whether it’s been delayed for some reason. We get that information before the customer calls and complains about it. The call center will be proactive in dealing with the customer, and letting him know that we are out there serving his needs. That’s very big, because sometimes in the past, we didn’t know if there was a problem until the customer called, asking "Hey, where’s my package? It should have been here already." Being proactive helps us provide better customer service.

My feeling is that there is a lot of competition out there for what we do. There's a lot of competition for every business out there. Customer service makes the difference whether that customer is going to come back to see you or not, because there’s only so much difference in price that businesses can generally give. When we can do these things to show customer that we care about when they get their product and that we are going to be right there with them all the way through, until they’ve got it and it’s being used by them, that makes them want to come back to us.

Gardner: I want to check in with Jim Rice. Is there anything you heard from Frank Deen that illustrates some of the trends that we talked about, or perhaps some of them we didn’t? It seems that customer service and the trust element is pretty prominent.

Rice: I was biting my tongue here, because I wanted to ask Frank a bunch of questions. I think the example illustrates, in great part, dealing with uncertainty. Because Frank now has pretty good understanding where his materials are, he’s able to make commitments to his customers that will then allow them to be more sure of when they can expect to get their materials. That means they can take out a lot of uncertainty in their planning process.

The question I have -- and maybe it’s for another time -- but when someone has less uncertainty in their supply chain, does it make it possible then to take inventory out of the system, because inventory is basically there as a buffer to deal with uncertainties?

Maybe Frank has chosen to keep his inventory levels the same and ensure higher customer-service levels, or possibly he has reduced inventory based on the ability to have a much higher level of certainty. I think it’s a really good example, and I think it illustrates something that I didn’t mention -- the importance of maintaining high service for your customers to maintain those customers.

Gardner: How about it Frank? Have you been able to whittle down your inventory as a result, and is there some cost savings there for you?

Deen: Jim’s right in the fact that we have a comfort level, so when we need a product for a customer, we can have it directly drop-shipped to that customer and know that it’s going to get there. That means we don’t have to keep a large amount of each kind of item. We keep enough for when someone calls and wants one, two, or three of something, but when they need 20 of it we don’t have to be worried, because we know that we can go right to our supplier and have that drop-shipped and serve that customer’s need. We know it’s going to happen.

Gardner: I have a sneaking suspicion that customer satisfaction is important to John Schaffer, as well. John, tell us about TrueWave and the Wadia products. Then let’s get into how this ability to satisfy customers throughout the transportation phase of a purchase works.

Schaffer: Sure, Dana, you hit the nail on the head there. Customer service is everything to us, as well. One of the great things about the tools that UPS has provided for companies like ours is the ability to offer a higher level of customer service through the visibility that Frank was discussing.

TrueWave manufactures a product under the Wadia brand, basically high-end consumer electronics, and specifically what most people would think of as CD players and high-end stereo equipment. We have the enviable position of a brand that is very well received throughout the world. Our challenge with shipping and satisfying our customers has to do with not just the United States, but satisfying countries overseas, working with distributors throughout Asia and Europe, and North America as well.

Our challenges are a little bit different. What UPS has been able to provide for us has really given us advantages. Previously, we would work with freight forwarders quite often. They are pretty good at handling the customs side of things, but the visibility was very poor, and we would have significant delays in getting packages from point A to point B. What we have enjoyed in our relationship with UPS is the ability to have the packages transported across borders seamlessly, and have visibility throughout the process.

Gardner: So, you’ve been able to enter and then satisfy markets that you probably wouldn’t have been able to get to?

Schaffer: No, we could get to the markets, but we couldn’t do in a way that allowed our customers to have visibility into the process. There’s a lot of uncertainty when you are shipping internationally. When you have visibility into the process from point A to point B, it really changes the dynamic quite a bit. One of the tools that Stephanie was discussing, Quantum View Manage, allows us to see if there are problems along the way. Then we can communicate with our customers in such a way that we can set the proper expectations.

Communication is the secret to customer success, and visibility into all aspects of the supply chain has really changed the way that we’ve operated our business. I think for the better. Our customers are very satisfied with how we are able to offer them now a clear expectation of what they’ll get and when they’ll get it, thanks, in large part, to the tools that UPS has been able to develop and offer to us. As a small company, that’s really valuable.

Gardner: I suppose the whole notion of customer satisfaction also involves exception management, or even returns, if someone decides that it wasn’t exactly the right fit for them. Does this visibility and these tools help you in terms of managing, "I’d like another one right away," or "This one didn’t work out for me." This is working in reverse -- getting stuff from the customer back to you.

Schaffer: Oh, yeah. It does help us when packages have to come in for service, an upgrade, an exchange, or for whatever reason. It allows us to again control the situation and set the proper expectations for our customers.

It’s very helpful for us in planning for things. For example, if we have a product coming in for an update, now we can track the product back to us, have an understanding of when that will hit our dock, prepare the service department, make sure that our inventory of the parts that are needed to updated are available, and just really control the whole process in a better way. It’s really created a great benefit.

Similarly, with incoming components for manufacturing, sometimes we’ll have a supplier send products to us cash-on-delivery (COD). If we have visibility into the shipping process, we can have finance prepare the payment in advance, so that we are efficient in how we manage the process at the dock. That’s been really valuable.

The new Quantum View tools -- Quantum View Notify -- has allowed our customers to have a good understanding of when their product has shipped and how it's proceeding to their destination. Then, the Quantum View Manage has helped us quite bit with giving us visibility into both outgoing and incoming parts and products. It has really benefited us, and we are happy that, to have been able to partner with UPS and take advantage of such powerful tools.

Gardner: Let’s bounce that again off of Jim Rice, the expert. It sounds like when you’re receiving goods and you can plan for payments and schedules and manage your own manufacturing processes, that's another opportunity to reduce risk, improve efficiency, and cut your total cost.

Rice: What we just heard from John is another example of how getting additional visibility into the system gives the company a lot of power. It gives them the power to decide whether to increase the amount of service they are going to provide. They can provide products and materials on a shorter cycle time and possibly take cost out of the system, because there is much less uncertainty. In the pervious example, when Frank Deen was talking about being able to ship direct with the knowledge of where the materials were, this just allows the company to say, "All right, here’s where we need to put our capital."

Now, the confidence that they have, knowing that they are going to have this information that tells them where their products are, is very powerful for the company. It gives the companies lot of tools and lot of power to say, "Here is how we are going to chart our own destiny, and we are going to squeeze some efficiencies out of that. We are going to reduce the uncertainty and the cycle time." This is good news.

As I suggested in the beginning, companies are trying to reduce the uncertainty. They are looking for ways to take cost out of the system, and these are pretty good examples of that. I want to underscore that this is not easy. It’s hard work, and it takes working very closely with customer and supplier and really leveraging whatever systems and processes you have, so that you have a robust solution. It sounds like they’ve been able to create that.

Gardner: Even relatively smaller companies without a whole lot of resources?

Rice: That’s the beauty of some of the technologies. It doesn’t necessarily require a huge fixed-cost. That’s where this big advantage is now, as we see in many companies, outsourcing some of the capabilities, because of the firms who are providing outsourcing services. In this particular case, UPS has made huge investments to develop these very competent and capable systems that, for a piece price, individuals and small- and medium-sized enterprises can take advantage of.

Gardner: Let’s go back to Stephanie Callaway. Stephanie, how do companies get started with this? We heard that it requires a lot of work. How do companies get started to enjoy some of these benefits?

Callaway: On www.ups.com, if anyone is interested in more information on Quantum View, they can search for Quantum View. There's an online demo that describes the various Quantum View products and their benefits to help customers recognize their own business process pain points and identify the solution that will work best for them.

We also have a sales force, so customers who have an account executive can speak with their account executive about their specific business process pain points to be registered for something like Quantum View Manage or Quantum View Data. The things that are more sophisticated, such as the online tools that I mentioned for tracking, are available on our Website, and customers just need to login and register to access those tools.

Gardner: Jim mentioned earlier that we are perhaps just scratching the surface on what’s going to be possible. I’d like to throw this out to the entire group. If you have a wish list, if you like to see some things down the pike a little bit, what would they be? Where can we go next with this? How about one of our users John Schaffer or Frank Deen? What’s on your wish list for the next stage?

Schaffer: I think UPS has done a good job of anticipating the needs. In some cases, they have changed the way that we’ve thought about supply chain visibility and have really done a great job of leading the way there. One of the things that I think would be interesting -- and I know UPS has begun to explore this -- is in fostering relationships.

This goes back to the trust issue, but in fostering better business relationships with offshore manufacturers and suppliers, there’s a financial component that goes along with that, and UPS has set up some programs to address that. But, I think there are some additional programs that could be built to allow the issues that arise from language barriers, etc. to be broken down more. They could have financial control of the situation to go along with the control of the shipping, the movement of parts. I think that’s something that UPS has begun to explore but it’s something that we would like to see more of.

Gardner: How do you react to that Jim? Is that along your lines of what the next stages will be?

Rice: I think that the next stages are going to have lots of different pathways. What we’ve just heard from John is one example. We just don’t know what’s going to be coming, and this is one of the exciting things. We try to predict and expect these things, and we always get surprised. I think it’s through innovation in small- and medium-sized enterprise, because these are organizations that are not rich with resources, but they are very deep in innovative approaches to solutions. This is one good example, and there probably would be plenty of others.

Gardner: Are there any gee-whiz technologies still to come? We’ve heard about GPS and RFID chips. Are we going to take this a step further in terms of what the technology can provide?

Rice: I think that the gee-whiz technology that is often talked about -- and you just made a brief reference to it, Dana -- is RFID technology. In many ways, this has been oversold. It has great power in a limited number of instances and environments. Potentially, this has lots of broader application, but there is an awful lot of standardization development that needs to be done in order to make this more broadly and widely acceptable and usable.

The future is really bright, but it’s a little way off for that. The synchronized supply chain is going to come as a result of organizations working closely together using technologies like radio frequency or cobbling together a variety of different technologies. Whether it’s GPS or more sensors for security applications and containers, to software packages that allow deep analysis of rich data from RFID tags, it’s going to require a lot of hard work to pull these things together, but the potential I think is significant.

So, that’s why a lot of people continue to make investments in those areas. But I do think it’s a ways off, before the capability of those technologies to work network-wide comes to fruition.

Gardner: So, perhaps the future will have more data and more data points for us, and the ability to analyze it, but it’s the relationships and the efficiency and innovation of companies in the field that is where the biggest payoff is, at least the short term.

Rice: There’s going to be a tsunami of data that’s going to be available, and the challenge is going to be how we actually analyze all this and then do something with it. Even if you can’t do something with that data, current systems are not fully capable of responding in ways that you otherwise would like them to respond. But, by using technologies like the visibility systems we’ve been talking about today, as well as designing systems to be more resilient, it will increase the ability of supply chains and company supply chains to be more responsive. Then, when the tsunami of data does come and tells us, "Hey, here’s a forecast. We know it’s going to happen tomorrow," it will allow the company’s system to actually respond in time for tomorrow.

I remember talking with a manufacturer not long ago who sells to Wal-Mart. Their folks said, "Well, we get an 80 percent accurate forecast 10 days out from a shipping due date, but we can’t do anything with that because we need six weeks in advance to be able to respond to that." So, that's going to require some responsive systems in order to be able to utilize all that data.

Gardner: Well, great. I want to thank our panel. This has been an interesting discussion. I’ve certainly learned more about what’s possible and what’s going to be probable.

We have been talking with Jim Rice, director of the Integrated Supply Chain Management Program at MIT. Thanks Jim.

Also Stephanie Callaway, director of customer technology marketing at UPS. And Frank Deen, shipping manager of Rackmount Solutions, as well as John Schaffer, president of TrueWave/Wadia. Thanks again.

This is Dana Gardner, principal analyst at Interarbor Solutions. You have been listening to a sponsored BriefingsDirect podcast.

Listen to the podcast here. Sponsor: UPS.

Transcript of Dana Gardner’s BriefingsDirect podcast on UPS's solutions for supply chain visibility. Copyright Interarbor Solutions, LLC, 2005-2007. All rights reserved.