Strategic Management of Information Technology Term Paper

Pages: 10 (3785 words)  ·  Style: Harvard  ·  Bibliography Sources: 30  ·  File: .docx  ·  Topic: Business

Strategic Management of Information Technology

The evolution and current practice of IS/it Strategy: A Critical Review

Service Oriented Architectures (SOA) in Manufacturing

SOA in Manufacturing: A Theoretical Overview

The Relationship of Web Services and XML

Current Practices: SOA in Manufacturing

Evaluation of SOA in Manufacturing

Quantifying the Impact of Web Services on Quote-to-Order Workflows

Best Practices in Measuring the Financial Impact of SOA

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Global manufacturers are often caught in the dilemma of on the one hand needing to pursue a continual low-price strategy to attain profitability, yet on the other being called upon to increase their agility to respond quickly and accurately to increasingly unique customer requests. Needing to maintain profitability yet also be agile enough in production processes to meet unique customers' requirements forces many manufacturers into a paradox of how to align their Information technologies (it) initiatives and programs to support both objectives. Manufacturers are resolving this dilemma through the use of SOA architectures and strategies, relying on Business Process Execution Language (BPEL), Web Services, XML and its many variants, Business Process Management, and Workflow Management (W3C XML Working group, 2004). Manufacturers are synchronizing these many components into strategies that pervade every aspect of their operations, hence the need for a robust and scalable Service-Oriented Architecture (Fu, Xiang and Bultan, Tevfik and Su, Jianwen, 2004). Jutras (2006) states that SOA process redefinition in manufacturing is less about cost reduction and more about BPR to re-align it systems to support key objectives by making processes more efficient. This paper evaluates SOA in manufacturing and concentrates on the streamlining of customer-facing processes.

Introduction

Term Paper on Strategic Management of Information Technology Assignment

The role of it departments has become increasingly strategic from the standpoint of redefining business processes that give companies a competitive advantage in execution of their strategies and initiatives. Far from being the custodians of a company's information systems the role of the it department today is that of strategy enabler and supporter, and as a result is in the midst of a transition from being simply a collection of cost centers to a hub of business centers. The intent of This paper is to show how Service Oriented Architectures (SOA) is redefining how it drives business process change throughout manufacturing companies. SOA is by definition inclusive of Web Services, Business Process Management (BPM) modeling languages including BPEL, in addition to support for Event Driven Architectures (EDA) that provide for constraint- and event-based logic that makes it possible to complete process and scenario automated responses within an SOA architecture, according to Masson, Smith & Gaughan (2006). The use of SOA architectures has become more commonplace as manufacturers have had to contend with continual price erosion in their core markets while customers increasingly ask for tailored and configured-to-order products specific to their own needs. The quote-to-order process is the predominant one that manufacturers specifically focus on to attain both cost efficiencies in addition to product customization globally. This specific process area will be the focus of the SOA discussions in the context of this paper, with both theoretical research and practical examples underscoring how SOA's most major contributions to streamlining this process are making the Return on Investment (ROI) in SOA technologies measurable and significant, according to Study in Contrasts (2006). SOA delivers competitive advantages by synchronizing supply chains, manufacturing systems, fulfillment, pricing and services to align manufacturers' processes to the needs of customer demands.

SOA in Manufacturing: Theoretical Review

SOA frameworks successful in manufacturing today rely on the integration of Web Services, BPEL-based programming and development languages, and the development of Web Services for specific processes in the manufacturer. Integrating all of these components together is XML, which acts as the integration technology across SOA frameworks (Usdin 2006). More precisely, XML and its many commands and sub-languages form the foundation for how Web Services communicate and execute commands across applications and systems (Vasudevan, 2001). XML forms the messaging and communications platform, while Web Services are the actual shared applications. XML further makes data integration possible in Web Services, enriching applications by making data available from many different types of systems as is shown by research completed by Barry & Associates, (2005). XML has formed the basis of Web Services and according to the latest standard definitions from W3C, is the "backplane" of the Web Services architecture itself according to Walsh (1998). There are additional standards including SOAP, a standard on which Microsoft has built much of its.Net architecture, or WSDL (Barry & Associates, 2005). Compared to these two standards however, XML is more aligned with the communications needs of users who want to share data and applications pervasively through networks and over the Internet. XML is the basis of the growth of Web Services in many organizations today.

XML's role in the growth of shared, hosted and Software-as-a-Service applications continues to be proven with every new application launched in these specific areas (Walsh 1998). The growth of XML is also attributable to its flexibility in providing a backbone for Web Services, specifically due to XLinks and XPointers adaptability to connecting with and using content, commands, and data from other XML-based documents. The future of XML is in the further development of this standard as the basis of object-oriented programming and the integration with more complex data sets including databases, ERP, CRM, supply chain, and analytics data and ultimately the development of entire SOA architectures and platforms (Vasudevan 2001).

Current Practices: SOA in Manufacturing

Historically manufacturers are conservative with regard to spending on it in general and on process redefinition specifically. Globalization, increasing cost pressures, and the need to increase the speed at which new products are introduced are all factors changing the conservative mindset of manufacturers to adopt newer technologies more readily than they had in the past. The role of the SOA frameworks in manufacturers is to increase the accuracy, efficiency, integration, and synchronization of these processes company-wide, resulting in greater performance in the market. As a result of the impact of these macroeconomic factors manufacturing spending has been predominantly focused on the efficiencies of manufacturing processes, leaving customer-facing processes to sales and marketing, SOA Success (2005).To get an understanding of how manufacturing companies are adopting SOA, it's best to look at the results SAP AG is making globally with their NetWeaver platform.

The following key results of SOA adoption into manufacturing companies worldwide are exemplified by the SAP NetWeaver early adopters (LWC Research, 2005). In accessing the adoption of SOA platforms into manufacturing companies, using SAP's NetWeaver as the barometer of early adopter success, the emerging role of SOAs as a point of key differentiation over and above just being a strategy for ERP systems consolidation is beginning to emerge. SOAs form the foundation of Web Services and Event Driven Architectures (EDAs) throughout the manufacturing companies who have already passed through the experimentation with Web Services as part of their SOA architectural plans and moved directly to piloting Web Services for such mission critical tasks as order capture, order management, return material authorization, special pricing request management, and quote-to-order process workflows. This view is substantiated by much of the research completed in this area including Jackson (2006). Of these, the Web Services that are revolutionizing manufacturing the most effectively today is the streamlining of the quote-to-order process. This is the process by which manufacturers work with both their direct and indirect channels to have each respective sales force create accurate quotes for customized products. Both business-to-business (B2B) and business-to-consumer (B2C) companies rely on quote-to-order strategies in conjunction with product configurators to accurately quote the pricing and availability for complex products. Figure 1, Manual Quote-to-Order Workflow in Manufacturing, shows an example of the typical quote-to-order workflow in a manufacturing company that relies heavily on manually-based processes to manage integration.

Figure 1: Manual Quote-to-Order Process Workflow Based on Analysis and sources from AMR Research (2003); LWC Research (2005)

Figure 1 quantifies the performance (over 20 days) and shows the highly manual series of steps required by most manufacturers to complete the process. Using an SOA framework that includes BPEL-based applications that can create streamlined workflows, a significant cost and time savings can be achieved. Figure 2: SOA Enables Business Process Management through Re-Engineering graphically illustrates the areas of improvement made possible when an SOA framework is applied to this specific manufacturing process.

Figure 2: Quote-to-Order Process Workflow with an SOA framework used to streamline specific processes

Based on Analysis and sources from AMR Research (2003); LWC Research (2005); Quote-to-Order Process; Siemens NEMA Quote-to-Cash Process

Event Driven Architectures (EDA) and Business Process Management (BPM) in conjunction with Web Services as operational structure of SOA in manufacturing is beginning to take shape in targeting the processes with the complexity of quote-to-order, supported by the research of Saia (2005). The majority of manufacturers also have become accustomed to measuring their progress according to specific key performance indicators (KPIs). SOA early adopters including Trane, United Technologies and Siemens AG use the combination of KPIs shown in Table 1, SOA Framework Results by Area of KPI Measurement. These KPIs are consistent with… [END OF PREVIEW] . . . READ MORE

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