Processes in the Networked Economies: Portal, Vortex, and Dynamic Trading Processes


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Amit Sheth, Keynote at the Software Architectures for Business Process Management (SABPM'99) Workshop at CAiSE *99, Heidelberg, June 1999.

Processes will be chief differentiating and the competitive force in doing business in the networked economy. They will be deeply integrated with the way of doing business, and that they will be
critical components of almost all types of systems supporting enterprise-level and business critical activities.

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Processes in the Networked Economies: Portal, Vortex, and Dynamic Trading Processes

  1. 1. The 11th Conference on Advanced Information Systems Engineering Heidelberg, Germany June 14-18, 1999 Processes in the Networked Economy: Protal, Vortex & Dynamic Trading Amit Sheth in collaboration with Wil van der Aalst I. Budak Arpinar T. Lima and METEOR team Large Scale Distributed Information Systems Lab. University of Georgia Athens, GA, USA SABPM Workshop Keynote
  2. 2. Introduction <ul><li>Challenges and Opportunities </li></ul><ul><li>Current Status: what do we lack now? </li></ul><ul><li>Architectural approaches </li></ul><ul><li>Technical challenges </li></ul><ul><li>Wrap-up </li></ul>
  3. 3. Challenges and Opportunities <ul><li>New Millennium: Technical Perspective </li></ul><ul><ul><li>Speed of work and technical developments </li></ul></ul><ul><ul><li>Distribution – everything and everyone is connected, logical distance is unrelated to physical distance </li></ul></ul><ul><ul><li>Process – increasing ability to cooperate (coordinate and collaborate) </li></ul></ul>Acknowledgement: T. Malone/MIT Study, WACC Conference
  4. 4. Challenges and Opportunities <ul><li>New Millennium: Market Perspective </li></ul><ul><ul><li>Silicon Economics is changing many industries </li></ul></ul><ul><ul><ul><li>Telecommunications </li></ul></ul></ul><ul><ul><ul><li>Energy Utilities </li></ul></ul></ul><ul><ul><ul><li>Retailing </li></ul></ul></ul><ul><ul><ul><li>Manufacturing </li></ul></ul></ul><ul><ul><ul><li>. . . </li></ul></ul></ul>Resources and innovations will come from those providing solutions to specific markets/industries
  5. 5. Challenges and Opportunities <ul><li>Telecommunications... </li></ul>
  6. 6. Challenges and Opportunities <ul><li>Prelude to the networked economy: Telecommunications … </li></ul><ul><li>The high valuations that the Wall Street has afforded to new entrants, exceeding $20 billion in valuation in just two to three years for companies such as Global Crossing, Level 3 Communications and Qwest Communications, have fueled entirely new business models, creating a new breed of global corporations, that in turn have provided opportunities for applying information technology to solve the challenges. </li></ul>
  7. 7. Analyst Briefing by Level 3 Communications, © Level 3 Communications Just do it
  8. 8. Analyst Briefing by Level 3 Communications, © Level 3 Communications
  9. 9. Analyst Briefing by Level 3 Communications, © Level 3 Communications
  10. 10. Convergence or Next Generation Networks
  11. 11. A Critical Role Process Technology Can Play <ul><li>Two of the most critical success factors </li></ul><ul><ul><li>customer acquisition and retention, </li></ul></ul><ul><ul><li>providing value added features and bundled services. </li></ul></ul>Solutions support these two compelling needs invariably lead to the need for interorganizational workflow processes because customers prefer to deal with a single service provider, and most high-value services require integration of what different types of providers have to offer. Today’s data-centric solutions are inadequate and inappropriate.
  12. 12. <ul><li>Current Status: </li></ul><ul><li>what has been industry’s approach to providing workflow solutions? </li></ul><ul><li>what are researcher doing? </li></ul><ul><li>what do we lack now? </li></ul>
  13. 13. Key conclusion from Doculab’s workflow product comparison study <ul><li>Products that allow development of complex applications, provide flexibility and support integration are very hard to use, take too long and require experience programmers (and are still not quite comprehensive) </li></ul><ul><li>Easy to use products are too restrictive – and are useful for small or standard applications only </li></ul><ul><li>METEOR EAppS’s objective has been to avoid significant compromise . </li></ul>
  14. 14. Slightly oversimplified observation on state of the art in Workflow Technology <ul><li>Primarily centralized, client/server architectures </li></ul><ul><li>Difficulty in integrating with existing applications and databases, not meant for heterogeneous, multi-server environments </li></ul><ul><li>Static workflows that can be fully defined before enactment starts </li></ul><ul><li>Focus on repetitive processes </li></ul><ul><li>Most products are suitable for many office automation and other human oriented processes. But QoS for business- and mission-critical processes is lacking. </li></ul>
  15. 15. Vendor in sectors adding workflow
  16. 16. Message/Data Tools/Architecture of current EAI products/solutions Distributed Object Management (ORB) Enterprise Java Beans DCOM METEOR Component HOST 1 HOST 2 HOST 3 HOST 4 Application EDI User Task User Task METEOR Component METEOR Component METEOR Component METEOR Component Services and Business Objects Business Object/Process Tool/Architecture of the METEOR Enterprise Application Development & Integration Database Transaction
  17. 17. Emergent New Market for Solutions in the Networked Economy
  18. 18. Research Disciplines Contributing to Workflow Management
  19. 19. MENTOR WISE WASA CRYSTAL METEOR Patha Rei ETHZ Metuflow Etc…etc Research in DB/IS/DC communities WIDE
  20. 20. Central proposition <ul><li>So far, lion’s share of the attention in Information Systems has gone to data </li></ul><ul><li>This attention will increasingly shift to information and knowledge on the one hand, and processes on the other </li></ul><ul><li>We will see process as an organic part of doing a business-- with e-commerce as the business driver, processes will be the engine on high-octane fuel to allow the driver to reach ahead of the competition. </li></ul>
  21. 21. Processes will be chief differentiating and the competitive force in doing business in the networked economy. They will be deeply integrated with the way of doing business, and that they will be critical components of almost all types of systems supporting enterprise-level and business critical activities . Central proposition
  22. 22. Architectural Approaches
  23. 23. Evolution of Workflow System Architectures
  24. 24. Observations/Predictions <ul><li>Workflow process management functions and technology will be absorbed by other technologies. </li></ul><ul><li>The workflow capability will be built in critical enterprise application systems such as </li></ul><ul><ul><li>Enterprise Resource Planning (ERP), </li></ul></ul><ul><ul><li>Supply-chain management, </li></ul></ul><ul><ul><li>Future generation of Enterprise Application Integration (EAI), </li></ul></ul><ul><ul><li>E-commerce application builder, </li></ul></ul><ul><ul><li>Other middleware services. </li></ul></ul>
  25. 25. Observations/Predictions <ul><li>Adaptability will become one of the key requirements. </li></ul><ul><li>There will be a shift from data-centric to process- centric knowledge. </li></ul><ul><li>Outsourcing of workflow management will become an attractive option. </li></ul>Corporations already outsource some of the data related functions as well as their Web sites: Exodus ( manages Web sites for large corporations. Recently, new companies are targeting application outsourcing.
  26. 26. Outsourcing Process Management <ul><ul><li>Organizations desire to concentrate on core competencies will lead to outsourcing process management, especially to support inter-organizational processes. </li></ul></ul><ul><ul><li>Outsourcing of processes will have a considerable impact on the way organizations operate. </li></ul></ul>
  27. 27. Outsourcing of Data, Web, Application and Processes
  28. 28. Does workflow technology have future? <ul><li>The number of workflow products offered increased to 200-300 around 1996, and then started to decline. </li></ul><ul><li>The analysts projected an enormous growth, from $2 billion of the total workflow market to $7 billion in 2000: this potential does not seem to have been realized </li></ul>
  29. 29. Lack of Success <ul><li>There are several explanations for the lack of success of today's generation of workflow management systems: </li></ul><ul><ul><ul><li>Workflow management systems were positioned as the silver bullet solving all kinds of problems: they could not meet the expectations. </li></ul></ul></ul><ul><ul><ul><li>The lack of real standards on the one hand and many vendors on the other hand has created a scattered landscape were customers are reluctant to invest in workflow products. </li></ul></ul></ul>
  30. 30. New Market Segments <ul><li>Other market segments started to co-opt some of the workflow capabilities: </li></ul><ul><ul><li>Enterprise Resource Planning (ERP) started to increasingly support workflow capabilities. </li></ul></ul><ul><ul><li>Several Enterprise Application Integration (EAI) products currently support limited forms of workflow capabilities (e.g., Active Software, New Era of Networks, and CrossWorlds, and Vitria) . </li></ul></ul><ul><ul><li>Some of the workflow vendors are in the process of positioning their products in the E-commerce segment. </li></ul></ul>The average Fortune 2000 company relies on 49 enterprise-level applications to run its business and spends 25 to 33 percent of its IT budget just to get them talk to one another .
  31. 31. Has workflow technology failed? <ul><li>Looking to the future, we discern two trends: </li></ul><ul><ul><li>First, vendors are targeting vertical sectors or industry specific solutions, e.g., telecommunication, healthcare. </li></ul></ul><ul><ul><li>EAI, and E-commerce, especially in the context of vanishing corporate boundaries in the networked economy, a new breed of products will appear to dynamically create and support virtual communities of commerce partners. </li></ul></ul>If we narrowly focus on workflow market segment and predominant vendors of a few years ago: perhaps yes. However, we see processes as an organic component of any EAI and E-commerce solution.
  32. 32. Architecture for Interorganizational Workflows <ul><li>Internet: the source of value moves from physical products to digital products. </li></ul><ul><li>Custom point-to-point integration between every buyer and supplier is impractical: transform supply chains into open and interoperable marketplaces. </li></ul>Most of the available marketplaces do not have enough facilities to automate complex business processes. In this respect, workflow systems should be exploited to model buying and/or selling processes.
  33. 33. Architecture for Managing Business Processes <ul><li>Depending on how various stake holders – the consumers, the intermediaries, and the suppliers interact, and how the capability of managing business processes is realized, we offer architectures for managing business processes </li></ul><ul><ul><ul><li>process portal , </li></ul></ul></ul><ul><ul><ul><li>process vortex , </li></ul></ul></ul><ul><ul><ul><li>dynamically trading processes . </li></ul></ul></ul>
  34. 34. Process Portal
  35. 35. Process Portal <ul><li>One-stop shopping for products or information </li></ul><ul><li>Peer-to-peer interactions </li></ul><ul><li>A portal is responsible for carrying out a majority of activities using the data it has and the transactions it supports. </li></ul><ul><li>Predefined, (relatively) static business processes </li></ul>A key characteristic of a portal is to own or manage much of the data and information it needs to meet its customers needs.
  36. 36. Process Vortex
  37. 37. Process Vortex <ul><li>Interactions among buyers and sellers occur through governed marketplaces </li></ul><ul><li>They focus on very specific product lines </li></ul><ul><li>Predefined business processes </li></ul><ul><li>Single interface to catalogues and supplier aggregation </li></ul>Telecommunications industry: service provider needs to support different classes of customers (e.g., individual residences, small businesses, and large businesses) and require flexibility to deal with a limited set of partners. For example, a CLEC may need flexibility in leasing network capacities for long distance services from QWEST communications or Level 3 communications.
  38. 38. Virtual Business Processes <ul><li>A virtual business process of a virtual enterprise, also referred as interorganizational workflow, goes beyond a single enterprise boundary and it is constructed by combining the services provided by different companies which are collectively called a trading community . </li></ul><ul><li>Some of the fundamental issues that need to be addressed to implement a virtual enterprise are: </li></ul><ul><ul><ul><li>How to provide a mechanism whereby companies can advertise their services, other companies can look at them and, finally, incorporate these services into their own business process? </li></ul></ul></ul><ul><ul><ul><li>How to execute a virtual process spawning several enterprises without being managed by one physical enterprise? </li></ul></ul></ul>
  39. 39. Dynamically Trading Processes
  40. 40. Dynamically Trading Processes <ul><li>Many complex interactions among enterprises </li></ul><ul><li>Business processes are highly dynamic </li></ul><ul><li>Based on the needs and preferences of a customer, a virtual process is constructed on the fly to meet this very particular demand of the customer. </li></ul><ul><li>Participants are a group of semi-autonomous or autonomous organizations that need to cooperate. </li></ul>Telecommunications industry: one of the visions of the future networks includes the facility to allow consumer devices to interact with other devices and humans on the network in an integrated fashion. The device may be able to specify a need for a specific type and quality of network services required and the network dynamically composes a customized process to allow processing of the request.
  41. 41. Technical Challenges
  42. 42. Technical Challenges <ul><li>Modeling and Design </li></ul><ul><li>Analysis </li></ul><ul><li>Enactment Services </li></ul><ul><li>Interoperability </li></ul><ul><li>Adaptability </li></ul>
  43. 43. Open Issues for modeling interorganizational workflows <ul><li>Integration of </li></ul><ul><li>Organization modeling (e.g., in the networked economy, workflow processes will cross organizational boundaries and these boundaries will become fluid and subject to continuous change) </li></ul><ul><li>Security Modeling </li></ul><ul><li>Data Modeling </li></ul>
  44. 44. Open Issues for Analysis of Workflows <ul><li>None of the commercially available WFMSs offers verification capabilities, which go beyond trivial checks such as the absence of an initial task or input condition. </li></ul><ul><li>In most WFMSs it is possible to model the synchronization (i.e., AND-join) of two alternative paths (i.e., two paths starting with an OR-split) without any warning at design time: at run-time such a construct will inevitably result in deadlocks. </li></ul><ul><li>Research efforts should aim at simulation facilities. </li></ul>
  45. 45. Open Issues for Workflow Enactment <ul><li>Significant additional research and serious engineering efforts are needed to improve scalability, exception handling, automatic recovery, and other QoS criteria. </li></ul><ul><li>Building all the capabilities from scratch within a workflow system without using any state-of-the-art supporting tools is not an easy task: </li></ul><ul><ul><li>Iona Technology’s OrbixOTM 3.0 with Java and security support for E-commerce applications, </li></ul></ul><ul><ul><li>BEA’s M3 system. </li></ul></ul><ul><li>Agent-based workflow management systems still have a long path ahead before they will effectively address QoS issues. </li></ul>
  46. 46. Open Issues for Workflow Interoperability <ul><li>Only concrete implementations of standards (e.g., SWAP{, jFLOW) can provide real feedback for the improvement of such interoperability standards. </li></ul><ul><ul><li>Need to go beyond their capabilities (Sync nodes in METEOR). </li></ul></ul><ul><li>The interoperability solutions need to evolve towards multi-protocol and more heterogeneous middleware environments. </li></ul><ul><li>The current interoperability specifications do not support organizational aspects in any significant way. </li></ul>
  47. 47. Open Issues for Adaptability <ul><li>If cases need to be transferred from an existing process definition to a new process definition, the use of a replication or a versioning mechanism will not suffice. </li></ul><ul><li>The term ‘dynamic change’ refers to the problem of handling old cases in a new workflow process definition. </li></ul>How to transfer cases to a new version of the process? New concepts and techniques are needed to avoid anomalies caused by the dynamic change problem.
  48. 48. Summary <ul><li>In the networked economy characterized by speed and distribution of both technological progress and business activities, an organic process technology will provide an integration fabric as well as key differentiator. </li></ul><ul><li>Our view: </li></ul><ul><ul><li>Much of the future innovations as well as commercial activities will come about by the process technology as part of other key products and solutions, such as in EAI and E-commerce markets, that will power networked enterprises. </li></ul></ul><ul><ul><li>On technology side, coordination, collaboration and information systems will continued to come closer to develop a new class of technology. </li></ul></ul>
  49. 49. Additional Information RIDE’99 Proceedeings Dogac et al NATO ASI Proceedings A.P. Sheth, W.M.P. van der Aalst, and I.B. Arpinar Processes Driving the Networked Economy: Process Portals, Process Vortexes, and Dynamically Trading Processes