SAP NetWeaver influence on development of
      further SAP business solutions
                           Master thesis pr...
Abstract
Thesis work presented in this report is a joint work of two students of Royal Institute of
Technology (KTH) over ...
Table of contents
Abstract...................................................................................................
1. Introduction
There is no certain information about how many people are really coding SAP software, but
there is no doub...
•   Literature study was used in order to analyze SAP as a company and system
    background, SOA concepts and NetWeaver c...
2. Introduction to SAP solutions
SAP is the world’s leading enterprise resource planning (ERP) and other business solution...
Second year was twice as successful as SAP earned two more customers – the tobacco
and cigarette manufacturer Roth-Händle ...
Walldorf. In 1980, the centre was complete and united all developers of SAP in one premises.
The same year SAP added new f...
Figure 2.2. SAP R/3 version 1.0 and 1.1 screen [6]
     After successful launch of SAP R/3 version, in 1993 SAP gained the...
worldwide. [5] Moreover in 1995 new version of SAP R/3 was released. SAP R/3 3.0 had more
production planning functionalit...
SAP had a customer base of 15000 in approximately 120 countries and employed over 28000
people. [7] SAP did not stop the d...
processes and is implemented in large enterprises in cross-industries is a family of solutions
called mySAP Business Suite...
Complete on-demand business solution for midsize
 SAP Business ByDesign
                                            busine...
SAP Customer Services Network
                                                                                    mySAP PL...
•   sales order processing (inquiry, quotation, sales order creation and processing);
         •   shipping (creation of o...
(e.g. customer inquiry – inquiry document, movement of goods – stock transfer order, etc.).
The basic functionality of SD ...
for industry is based on customer needs. As a result, the companies would
             implement solutions much faster and...
3. SAP NetWeaver overview
In this section, SOA as the core of SAP NetWeaver and SAP NetWeaver itself would be
described in...
Windows were implemented using this kind of architecture. [12] Early initiatives to make this
more usable were breaking mo...
In general, SOA details and basic components are still debatable. However, the basic
concept and benefits of this type of ...
•   Service encapsulation, or usage of already created services (that were not
             intended to be used under SOA)...
businesses that implemented SOA were referring to these implementations as “not successful”.
There were no businesses that...
Business Innovation and Optimization Services
                         (Integrated environment for design and creation of ...
•   Interaction services are responsible for the presentation of the business design. In
             other words, these a...
IT and business worlds to communicate in a proper way. Services could be accessed and used
from within the organization wi...
Three main benefits of SAP NetWeaver for the company implementing SAP Business
Suite solutions, according to SAP are as fo...
•   Unified life-cycle management. Automate application management and
             processes to optimize an application l...
and a portal (EP component). Information integration consists of business intelligence (BI
component), master data managem...
data consistency. MDM, as XI, also helps to integrate business processes across
             the extended value chain. [29...
•    SAP NetWeaver Visual Composer. This tool simplifies the development of the
               portal content and analytic...
components and SAP NetWeaver architecture did not change. It was just presented from
another perspective.
     After descr...
IBM WebSphere platform is composed of these (and some others) software tools [34] that
comply with the SOA architecture pr...
intelligence, collaboration, and content management systems. [35] Many of the products
included under the Oracle Fusion Mi...
•   Integrated Service Environment (ISE) helps to develop and deploy services. [36]
     Despite Oracle claims that Fusion...
•   BEA AquaLogic User Interaction is a set of tools that facilitates the creation of
             portals, collaborative ...
•   System Center. Center solutions are tuned to simplify management of the
             systems and applications the comp...
4. SAP NetWeaver impact on development of SAP solutions
After description of SOA architecture and SAP NetWeaver, it is cru...
In the next generation SAP R/3 as the name suggests, three-tier architecture is started to
be used. So the user is accessi...
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
Thesis Report: SAP NetWeaver influence on development of further SAP business solutions
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Thesis Report: SAP NetWeaver influence on development of further SAP business solutions

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Thesis Report: SAP NetWeaver influence on development of further SAP business solutions

  1. 1. SAP NetWeaver influence on development of further SAP business solutions Master thesis project Prepared by: Diana Gold Oguzhan Osman Erim Academic supervisor: Prof. Mark Smith KTH, 2008
  2. 2. Abstract Thesis work presented in this report is a joint work of two students of Royal Institute of Technology (KTH) over a period of twenty weeks under the supervision of Prof. Mark Smith. The main area of investigation is SAP NetWeaver and its influence on further development of SAP applications. In order to find out the impact of SAP NetWeaver on SAP as a company and as a system, SAP background and history as well as SAP NetWeaver background and components are analyzed. Moreover, as SAP NetWeaver is based on SOA principles, this framework is also presented in details. Lastly, SAP NetWeaver influence on architecture, development, integration and implementation of SAP solutions is studied and a survey is carried out in order to find out the impact of SAP NetWeaver on business actors (SAP customers, developers and consultants). In the conclusions part, all the results are analyzed and summed up. 2
  3. 3. Table of contents Abstract............................................................................................................................. 2 1. Introduction .............................................................................................................. 4 2. Introduction to SAP solutions.................................................................................. 6 2.1. SAP background and history........................................................................................ 6 2.2. SAP solutions ............................................................................................................. 11 2.3. SAP efficiency............................................................................................................ 16 3. SAP NetWeaver overview ....................................................................................... 18 3.1. SOA overview ............................................................................................................ 18 3.1.1. Evolution of IT architecture...................................................................................................18 3.1.2. SOA definition.......................................................................................................................19 3.1.3. Logical architecture model ....................................................................................................22 3.2. SAP NetWeaver definition......................................................................................... 25 3.2.1. SAP NetWeaver background.................................................................................................25 3.2.2. SAP NetWeaver components ................................................................................................27 3.2.3. Overview of SAP NetWeaver competitors............................................................................31 4. SAP NetWeaver impact on development of SAP solutions................................... 37 4.1. SAP NetWeaver impact on SAP architecture ............................................................ 37 4.2. SAP NetWeaver impact on integration of different applications............................... 40 4.3. SAP NetWeaver impact on development of new applications .................................. 43 4.4. SAP NetWeaver impact on SAP implementation ...................................................... 50 4.5. SAP NetWeaver influence on project actors.............................................................. 52 4.5.1. SAP customers.......................................................................................................................53 4.5.2. SAP developers......................................................................................................................55 4.5.3. SAP consultants.....................................................................................................................57 5. Conclusions............................................................................................................. 60 Acknowledgements......................................................................................................... 62 References ...................................................................................................................... 63 Appendix 1. SAP History from 1972 till now................................................................ 66 Appendix 2. Survey and interview questions ................................................................ 67 Appendix 3. Survey website ........................................................................................... 71 Appendix 4. The survey report....................................................................................... 72 3
  4. 4. 1. Introduction There is no certain information about how many people are really coding SAP software, but there is no doubt in efficiency of SAP solutions so far. Now SAP empowered its systems with an additional platform to facilitate development and integration of SAP and non-SAP solutions – SAP NetWeaver. However, it is not obvious what effects does this new platform brings. With this thesis work, it is aimed to analyze what is NetWeaver influence on several areas: SAP architecture, SAP development, integration and implementation, SAP as a company, SAP customers, developers and consultants. The main research question to be answered in this thesis is: how SAP NetWeaver influences further development of SAP business solutions. In order to answer this research question, some goals need to be achieved: 1. Study the background of SAP as a company and as a system. 2. Analyze service oriented architecture (SOA) concept as SAP NetWeaver is based on its principles. 3. Analyze SAP NetWeaver integration platform, its background and main components. 4. Study the differences of pre-NetWeaver and NetWeaver-based SAP applications: a. SAP architecture; b. integration of SAP and non-SAP applications; c. development of SAP applications; d. implementation of SAP solutions. 5. Study the influence of SAP NetWeaver on SAP customers, consultants and developers. In accordance with the set goals, thesis is divided into three logical parts: 1. Introduction to SAP solutions. This part covers the background of SAP as a system and as a company as well as describes main functionality of SAP systems. 2. SAP NetWeaver overview. Here SOA background and concepts as well as SAP NetWeaver background and main components as presented. 3. SAP NetWeaver impact on development of SAP solutions. In this last part of the thesis, the main changes to SAP architecture, development, integration and implementation of SAP applications, as well as NetWeaver impact on business actors (SAP consultants, developers and customers) is analyzed. In order to complete the thesis, these research methods were used: 4
  5. 5. • Literature study was used in order to analyze SAP as a company and system background, SOA concepts and NetWeaver components. It was also used in order to research the main impact of SAP NetWeaver on SAP architecture, development, integration and implementation. • Interviews were used in order to find out the main changes of SAP after NetWeaver was introduced. • Survey was used in order to get a professional insight of NetWeaver specialists on SAP NetWeaver impact on business actors (customers, developers, consultants). 5
  6. 6. 2. Introduction to SAP solutions SAP is the world’s leading enterprise resource planning (ERP) and other business solutions provider. Over more than 35 years, the SAP company has developed different versions of the software that suit large corporations as well as middle and small-sized businesses. The most revenue company gets on solutions for enterprises, so the core SAP product is the family of standard systems for large corporations. It is called mySAP Business Suite. This group of systems covers such processes as accounting, product lifecycle management, supply chain management, customer relationship management and others. This chapter will analyze SAP solutions in more depth. Firstly, it will present the history and background of SAP as a company and as an ERP system. Secondly, it will define mySAP Business Suite components and their background. Lastly, some business benefits for the companies implementing SAP solutions would be mentioned. 2.1. SAP background and history SAP history is a long lasting success story that begun more than 35 years ago. In this chapter main facts and figures of SAP development and growth would be mentioned and some screen shots of different versions of the system would be provided. This would make a clearer picture of SAP as a company and as a system. Five former IBM employees founded SAP in 1972 in Mannheim, Germany, as Systems Applications and Products in Data Processing. They wanted to create a standard enterprise system, which would automate business processes. This idea was based on the fact that clients, who ordered to develop financial accounting software, were searching for very similar solutions. [1] Over a little more than 35 years, SAP grew from a small German company into large multi-cultural International Corporation. Today, SAP is the leader of collaborative enterprise resource planning (ERP) as well as other business software solutions. SAP employs about 43000 people and has installations in majority of developed and developing countries. [2] The development of hardware had a great impact on SAP growth and functionality. It all begun with the main challenge of very limited storage capacity and slow processing time in 1972. Back then, the storage capacity of mainframes was only 500 KB. So, SAP was bounded with extremely slow input and output as well as limited volume of data. However, with all these hardware limitations SAP had signed its first contract. The first customer of SAP was German ICI subsidiary in Östringen. At this point of time, SAP had nine employees and after successful completion of the project posted DM 620000 profit on revenues. [3] 6
  7. 7. Second year was twice as successful as SAP earned two more customers – the tobacco and cigarette manufacturer Roth-Händle and the pharmaceutical company Knoll. [4] These companies bought SAP Financial Accounting (RF) system. After these successful contracts and non-problematic installations, the system gained the reputation of a reliable standard solution. As a result, number of installations expanded to 40. Despite these successes, SAP did not stop to develop the software itself. RF module was followed by Material Management (RM) module with functionality for purchasing, inventory management and invoice verification. [4] It is important to note, that SAP was very concerned about integration of these two modules. So, the data was easily transferred from one to another. In 1977, SAP became a GmbH (a closely-held corporation). Revenues this year were close to DM 4 million, number of employees grew to 25. [4] The same year SAP moved to its present headquarters in Walldorf. SAP also signed its first foreign contracts with two companies in Austria. After a year, SAP had a customer base of 100 and 50 employees. [4] Development of the system was not stopped. SAP introduced a new module Asset Accounting (RA) in the same year. At the same time, SAP made further steps towards international development of the system while developing a French version of the RF module By the beginning of 80s, new generation of hardware allowed SAP to improve the solution further. The first version of two-tier architecture system was introduced in 1979. [3] The system was called R/2 (R stands for “real time” and 2 – two-tier architecture). The user interface was not very user friendly as seen from the screen shot provided on Figure 2.1. However, it was the first step towards new technologies. Figure 2.1. SAP R/2 initial screen [6] Just before the new version was presented, in 1978 SAP for the first time reached DM 10 million of profit milestone. [4] Back then, SAP started building its first computer centre in 7
  8. 8. Walldorf. In 1980, the centre was complete and united all developers of SAP in one premises. The same year SAP added new functionality of order history to the system, which made it even more attractive. According to SAP by the end of 1980, “… 50 of 100 largest industrial companies in Germany were SAP customers.” [5] Close cooperation with customers led SAP to continuous improvements in system functionality. As a result many new enhancements were made (such as new Cost Accounting (RK) module). Moreover, with multi-language environment, in the beginning of 80s SAP R/2 was ready for international market. New cheaper and more powerful technologies made it possible to expand customer base within Germany and abroad. 10th anniversary in 1982 SAP celebrated with sales increasing by % 48 to over DM 24 million comparing to previous year. [4] By the end of 1982, SAP had 236 customers in Germany, Austria and Switzerland. Customers in these countries were using SAP standard solutions. Next year, SAP revenues grew % 45 comparing to 1982. [4] In 1984 SAP founded SAP AG (International) in Switzerland and focused on further expansion to international markets. [3] SAP also continued developing new modules of the standard solution. In 1984 Personnel Management and Plant Maintenance were started to develop and Control System module was successfully installed for the first time. [5] By 1985, SAP standard solution was used in most European countries and started penetration to other continents, mainly focusing on South Africa, Kuwait, Canada and the US. [5] By fifteenth anniversary of the company, it opened new offices in Munich and Hamburg and established subsidiaries in The Netherlands, France, Spain and United Kingdom. By that time SAP had 750 employees, 850 customers worldwide and revenue of DM 245 million. [7] In 1987, the idea of new generation software was introduced and SAP R/3 was developed in few years. By its twentieth anniversary SAP had subsidiaries in Denmark, Sweden, Italy, US, Canada, Singapore, Australia and other countries. It employed 3200 people and had 2800 customers in all parts of the world. [7] In 1992, almost half of SAP revenues were generated from outside Germany. This was mainly due to the fact that SAP implemented 14 languages to the software and it was highly adaptive to international market requirements. The first version of SAP R/3 was released in the same year 1992. As in the previous version, R stands for “real time” and 3 for “three tier architecture”. This version was a revolution in SAP as a company and as a system history. After this release SAP started its penetration towards midsized companies and the revenue growth was much faster than the most optimistic forecasts. The screen shot of the SAP R/3 version 1.0 and 1.1 is presented on Figure 2.2. 8
  9. 9. Figure 2.2. SAP R/3 version 1.0 and 1.1 screen [6] After successful launch of SAP R/3 version, in 1993 SAP gained the top position among German software vendors. As to international arena, SAP took the seventh place among software companies worldwide. That year for the first time SAP revenues reached important DM 1 billion milestone. In 1993, SAP had 3500 customers worldwide. [7] Soon new releases of SAP R/3 were introduced. SAP R/3 2.0 and 2.1 were much more functional (see figure 2.3.). Figure 2.3. SAP R/3 version 2.0 and 2.1 screen [6] By the end of 1994, SAP had a customer base of 4000 and employed 5000 people worldwide. [7] Since the rollout of SAP R/3, the system was installed over 1000 times. [5] In the same year SAP received ISO 9000 certificate. Moreover, SAP was showing good results in project management: SAP R/3 version 2.2 was delivered on time. This version included more functionality in Logistics. [4] In 1995, one of the most important events for SAP was gaining Microsoft as a user of R/3 system. By that time, SAP already had 6000 companies, including IBM, using SAP R/3 9
  10. 10. worldwide. [5] Moreover in 1995 new version of SAP R/3 was released. SAP R/3 3.0 had more production planning functionality. Print screen of R/3 version 3.0 is presented on figure 2.4. Figure 2.4. SAP R/3 version 3.0 and 3.1 screen [6] It is important to note, that SAP was further developing its international affairs by founding subsidiaries in China, Argentina, Brazil, Korea, Poland, Russia and Thailand in 1995. By that time SAP already had presence in more than 40 countries. [7] Moreover, the first industry solution for process industry was introduced the same year 1995. [3] Figure 2.5. SAP R/3 version 4.0 screen shot [6] By the end of the century, SAP changed its strategy according to new technology trends. SAP became interned-based. This helped the company to gain even more customers. By 2001, 10
  11. 11. SAP had a customer base of 15000 in approximately 120 countries and employed over 28000 people. [7] SAP did not stop the development of new versions either. So by the beginning of first decade of 21st century SAP had released SAP R/3 versions 4.0, 4.5, 4.6, 4.7. Some of the companies are still using SAP R/3 release 4.6 c or d and release 4.7. The screenshots of the systems R/3 4.0 and 4.6 are presented on figures 2.5 – 2.6. Figure 2.6. SAP R/3 version 4.6. screen shot [6] Recently the brand name SAP R/3 was changed to SAP ECC (ERP Central Component) and up till now the company released versions SAP ECC 5.0 and SAP ECC 6.0. Moreover, SAP introduced solutions for small and medium sized businesses as well as solutions for different industries. In 2004 SAP introduced SAP Netweaver – the infrastructure that helps to integrate different SAP and non-SAP systems into company processes. This platform is being further developed today and successfully used in businesses. After the introduction of Netweaver, SAP gathered all best components into one and offered this group of solutions as a standard system named mySAP Business Suite. At the time SAP has more than 12 million users of the system worldwide. [1] More than 120000 installations, approximately 43000 customers (using standard and industry solutions) and 1500 SAP partners in 120 countries makes SAP third largest independent software vendor across the globe. [1] Graphical SAP history from 1972 till now is presented in Appendix 1. 2.2. SAP solutions As mentioned above, SAP developed solutions for large and small companies in different industries. It also has specific solutions for more than 20 industries (e.g. aerospace and defense, automotive, high tech, etc.). The new core product of SAP that covers most of the business 11
  12. 12. processes and is implemented in large enterprises in cross-industries is a family of solutions called mySAP Business Suite. Basically all the standard modules that were developed throughout 35 years (e.g. FI – accounting, CO – controlling, SD – sales and distribution, MM – material management, LE – logistics execution, etc.) are put into this family of systems. Except for much more functionality than before, the difference this solution has is that modules have been moved between systems. For example, SD was a function of SAP R/3 (or SAP ERP), however in mySAP Business Suite most of it is placed in SAP SCM system. SAP has developed all of the solutions using its own programming language ABAP (Advanced Business Application Programming). However recently the company also started using JAVA as the second programming language. There are many discussions and misleading opinions about SAP main functions and solutions and their placement in the systems. Therefore it is important to mention the main (not all) solutions that SAP AG has today. So, SAP solutions range is presented in Table 2.1. Table 2.1. SAP AG product range [8] Application Definition Enterprise Applications It is a family of business applications, including SAP MySAP Business Suite ERP, SAP SCM, SAP PLM, SAP CRM, SAP SRM. A joint product of SAP and Microsoft, ensuring access Duet to SAP data via Microsoft interface. SAP Manufacturing Specific solution for manufacturing companies. Solution that is used for improving service delivery SAP Services and Market Management and asset accounting. Different applications that could be used for various SAP xApps Composite Applications business needs (cost and quotation, lean planning, etc.). Business Solutions Includes corporate governance and oversight, risk SAP Solutions for Governance, Risk and management, and compliance management and Compliance reporting. Enables information workers (salespeople, product SAP Solutions for Information Workers managers, financial executives) to easier find and use information. Empowers organizations to manage all financial and SAP Solutions for Performance operational strategy, planning, budgeting, forecasting, Management reporting, and analytic requirements [8] Enterprise-class solutions that support RFID (radio SAP Solutions for RFID frequency identification), barcodes, and other Auto-ID technologies, as well as serialization. [8] Solution Extensions Cross-solutions and cross-industry functionality. Solutions for Small Businesses and Midsize Companies Adaptive business solution for midsize business SAP Business All-in-One (based on SAP ERP). 12
  13. 13. Complete on-demand business solution for midsize SAP Business ByDesign businesses. SAP Business One SAP solution for small businesses. Except for these products, mentioned in the table, SAP has many other solutions for different industries as well as services for business needs. However, the biggest and most important product is the standard solution to automate business processes. As mentioned, today SAP offers its main solution for enterprises – group of systems called mySAP Business Suite. The evolution of SAP systems starting with R/3 is shown on Figure 2.7. The height of the columns shows functionality of the system version. As seen, SAP R/3 Enterprise was a foundation for mySAP ERP. Then, other solutions were introduced (SAP CRM, SAP SCM, etc.). Lastly all the solutions were put together and formed mySAP Business Suite. mySAP Business mySAP Suite solutions: mySAP mySAP CRM, SCM ERP SAP R/3 Enterprise SAP NeatWeaver SAP R/3 Figure 2.7. Evolution of SAP solution [9] From figure 2.7 it is seen that latest versions of SAP are based on integration and application platform SAP NetWeaver. This platform makes it possible to combine different components and modules (SAP and non-SAP) into one adaptive business system. NetWeaver is based on the latest technological trend – SOA (Service Oriented Architecture). According to the definition SOA “… defines how two or more entities interact in such a way as to enable one entity to perform a unit of work on behalf of another entity. The unit of work is referred to as a service, and the service interactions are defined using a well-defined description language.” [10] This would be analyzed in more depth in the next chapter. SAP NetWeaver is a group of tools and components that form the infrastructure to integrate SAP and non-SAP solutions into business processes of the company. As SAP NetWeaver is the main research area of this thesis, it will be described in more depth in the next chapters as well as SOA. Except for presenting SAP solutions’ evolution, it is also important to define mySAP Business Suite functionality. So, the architecture of this family of solutions is presented in Figure 2.8. 13
  14. 14. SAP Customer Services Network mySAP PLM Industry Solutions mySAP SRM mySAP ERP mySAP CRM mySAP SCM SAP NetWeaver SAP xApps Figure 2.8. mySAP Business Suite [9] The core component of the Business Suite is SAP ERP (former SAP R/3), which has accounting, logistics, inventory management and other basic functionality. This functionality is enriched with SAP PLM (Product Lifecycle Management), SAP SRM (Supplier Relationship Management), SAP SCM (Supply Chain Management) and SAP CRM (Customer Relationship Management) solutions. All these solutions are integrated on the SAP NetWeaver infrastructure. This functionality could be further enriched by SAP xApps. To make it easier to understand at least some of the functionality of SAP Business Suite, sales and distribution process would be briefly described. Sales and Distribution functionality could be found in SAP SCM component, so this solution is presented in Figure 2.9. Supply chain performance management Supplier Customer Collaboration Collaboration Supply chain Design Demand Planning External Manufacturing Order Partner Procurement fulfillment Partner Supply chain event management Figure 2.9. mySAP SCM Solution [9] MySAP SCM consists of several main processes: supply chain design (strategy), demand planning, external procurement (goods are bought from the third party), manufacturing, and order fulfillment (from inquiry to invoice). The later functionality is a component earlier called SAP SD – Sales and Distribution. Further, mySAP SCM solution is collaborating with customer, supplier and other partner systems. To go further, order fulfillment (part of mySAP SCM) or earlier called Sales and Distribution (SD – part of SAP R/3) has three main functions: 14
  15. 15. • sales order processing (inquiry, quotation, sales order creation and processing); • shipping (creation of outbound deliveries, picking, packing, transportation planning and posting goods issue); • billing (creation/cancellation of invoices, credit and debit memos, transfer of billing documents to accounting). Company using SAP Customer buying goods Inquiry document Inquiry (placed over the phone; fax, etc.) Created with reference Quotation document Quotation (received over mail, fax, etc.) Created with reference Sales order document Order (placed over the phone, fax, etc.) Created with reference Outbound delivery document (packing, loading, etc.) Created with reference Transfer order document (movement within warehouse) Created with reference Goods issue document Goods delivered Created with reference Invoice Invoice received Return document Returning goods back to the supplier Created with reference Return delivery document and goods receipt Created with reference Credit memo Credit memo received Figure 2.10. Functionality of sales and distribution Order Fulfillment also includes pricing functionality and different kinds of contracts (scheduling agreements as well as value and quantity contracts) maintenance. Consultants of this area are also responsible to maintain material master data on sales level as well as customer master data and customer-material info records. Rebate agreements and pre-sales activities are also a functionality of SD Each function of this component is covered by separate document 15
  16. 16. (e.g. customer inquiry – inquiry document, movement of goods – stock transfer order, etc.). The basic functionality of SD process is presented in figure 2.10. This is just a standard process that does not cover other possible scenarios (make-to- order, which includes some manufacturing functionality, consignment process, invoice correction, etc. that generate other document types). It also does not show very important SD functionality – pricing. However, it creates a picture of what SD covers. In general, SD process starts when searching for customer and ends when customer receives the invoice, and all possible scenarios in between are functionality of SD module. This process could be changed and customized according to the specific requirements of each company. The component is highly adaptive to changes and many more document types with different functions could be created. Except for SD, there are many more different processes that are covered by SAP, among them: general ledger accounting, accounts receivable/accounts payable maintenance, material management, production planning, demand planning, controlling, human resources management and many others. There is noone in the world who would know the whole functionality of SAP, so the consultants are focusing on these narrow areas. 2.3. SAP efficiency As seen from the success story of SAP as a company and as an ERP system, it is obvious companies are buying the product because it helps them to optimize the business processes in some way. SAP claims, that when fully implemented, mySAP Business Suite would have these benefits for the company [11]: • Operational excellence – by providing visibility across the enterprise. Companies can transform customer requests into responses, both inside and outside the company (via partners). • Faster response to business change – by allowing companies to analyze information recorded in day-to-day operations and gather structured and unstructured information from across the enterprise. Companies can react faster to business and market changes and gain competitive advantage. • Seamless integration – by solving the integration challenge from a business and technical perspective with the help of SAP NetWeaver. Companies benefit from end-to-end process management and low TCO (total cost of ownership). • Rapid time to benefit – by solving the implementation challenge - providing specific for each industry best-practices solutions. The development of solutions 16
  17. 17. for industry is based on customer needs. As a result, the companies would implement solutions much faster and improve their time to benefit. • Global operations – by allowing companies to integrate their international operations, using SAP experience in automating multi-cultural businesses. Moreover, SAP supports more languages and regional versions than any other application suite. • Reliable operations – influenced by the SAP NetWeaver platform. • Adaptability – the group of solutions provides all necessary functionalities that support innovations within companies and help to adapt to changes faster. SAP implementations not always are successful and bring these benefits. However, the majority of failures depend on the work of consultants and customer inability to change the way they are working, not on the software itself. As SAP is highly adaptive, it could be customized in any way the customer needs it (sometimes adding new functionality). So, it is possible to say that SAP, if implemented in a right way, brings value to its customers. Of course, sometimes companies implement SAP because there is no other software that could handle that big amounts of data and processes, but that also means SAP is able to solve problems of huge enterprises. After a brief review of the SAP company and system background it would be much easier to follow the main topic of this thesis. In the following chapter SAP NetWeaver infrastructure and SOA concept would be analyzed in more depth. 17
  18. 18. 3. SAP NetWeaver overview In this section, SOA as the core of SAP NetWeaver and SAP NetWeaver itself would be described in more details. The first subchapter would define SOA philosophy and the basic components. The second subchapter would define SAP NetWeaver background and architecture. 3.1. SOA overview The main focus of this chapter is to describe SAP NetWeaver infrastructure, its main functions and components. However, it is important to describe the principles of this infrastructure first. SAP NetWeaver is based on popular nowadays service oriented architecture (SOA) concepts, defined in brief in the previous chapter. This subchapter would describe the SOA background, main components in more details and present the possible logical architecture. 3.1.1. Evolution of IT architecture According to many sources, service oriented architecture is not a revolution, rather an evolution in the IT architecture area. The evolution of IT architectures from the perspective of components (first – monolithic, then functions, objects, messages between objects, application integration and lastly - services) is presented below on figure 3.1. Pre 1950’s to 1970’s to 1980’s to Mid 1990’s to Late 1990’s Today 1960’s mid 1980’s mid 1990’s early 2000 Sub- routines / Remote Enterprise Service Monolithic Remote object Message Application Oriented Architectures procedure invocation processing Integration Architecture calls (EAI) Increasing modularity to achieve flexibility Figure 3.1. Evolution of IT architecture [12] When the software was started to develop in early 1950s, its structure was rather simple. However, with years this structure was becoming more and more complex. So developers together with IT architects were trying to make the IT architecture simpler and better manageable. It all started with monolithic architectures, where processing, data and user interface were connected in one system. As an example, DOS and some of the first versions of 18
  19. 19. Windows were implemented using this kind of architecture. [12] Early initiatives to make this more usable were breaking monolithic applications into sub-routines or, in other words, functions. Functions were parts of the code within a larger application that could perform specific tasks and be more or less independent from one another. [12] Later, the main focus was based on the concept of objects. These were discrete parts of program code that included data and instructions of its behavior depending on the context. [12] Object oriented architecture was based on the tight relationships between objects, so the next step was to loosely connect object-oriented applications to each other. This was performed by message processing. Later, various enterprise application integration techniques were developed to make the architecture even more modular. The latest trend of the IT architecture is to use services as the basic elements for building information systems. Service in this context should be understood as a set of components (functions, objects, applications) that form a business service as understood by the non-IT people. In this way business and information technologies communicate in the most appropriate way than ever before. 3.1.2. SOA definition SOA is a respectively new concept that was introduced in the beginning of the first decade and became very popular among software vendors and business representatives. The main idea of this architecture is that services, as business people understand them (e.g. checking an online bank account or filling the electronic form), are used as the basic components for building information systems. These services are independent and could be reused in different business scenarios. The main goal of SOA is to align business world with IT world in a way that both work more effectively. According, to IBM, SOA is “… a bridge, that creates a symbiotic and synergistic relationship between the two [business and IT] that is more powerful and valuable than anything that we’ve experienced in the past.” [13] Further more, service oriented architecture is focusing on business results that would improve after alignment of business and IT. Microsoft looks at SOA in even broader way. According to this company, SOA aims to create “worldwide mesh of collaborating services” that could be accessible to anyone and reusable in different business scenarios. [14] It is SOA that would assure the delivery of business agility and IT flexibility. Another IT corporation, Oracle, sees SOA as a facilitator of development of “modular business services” [15], which could be integrated and reused. This would create a flexible and adaptable IT infrastructure. Implementing an SOA approach, company could focus resources on development of new services rather than support of all applications within organization. 19
  20. 20. In general, SOA details and basic components are still debatable. However, the basic concept and benefits of this type of architecture are accepted and widely used in the industry. Most of the IT companies see SOA as the future architecture style and are suggesting different solutions based on SOA concept. So, the definition that could be used to describe SOA is: “SOA is a conceptual business architecture where business functionality, or application logic, is made available to SOA users, or consumers, as shared, reusable services on an IT network. "Services" in an SOA are modules of business or application functionality with exposed interfaces, and are invoked by messages.” [16] In other words, according to SOA, services could be gathered in various sets that form a business process. Different sets of services in a business process are called service orchestrations. Services could be shared and reused. It is also important to note that SOA is not: • a product, • a solution, • a technology, • a quick fix of IT complexity and bugs, • addressing all IT challenges that are present in the IT organization. As a rule, SOA makes use of different methodologies and tools for definition of the business design, and usage of this design to improve the business results. SOA also uses software tools, programming models and techniques (e.g. Web Services) for implementation of this business design within information systems. The host of this implementation is the middleware infrastructure. [13] These infrastructures are developed by the software vendors. SAP NetWeaver could be one of the examples. SOA is not just an IT term. Different people in organization could interpret SOA in different ways. For example, business people would see SOA as sets of services that can be suggested to customers and business partners. IT architects would align SOA with an architecture style, which requires service requestor, service provider and service itself. Application developers would see SOA as a programming model with its own tools and techniques. Operation people would interpret SOA as a set of agreements between service requestors and service providers. All these people would be correct in a way, that SOA is a new trend that helps to align business and IT. [17] Despite SOA is a very broad and fuzzy term it has core principles that are defined further [18]: 20
  21. 21. • Service encapsulation, or usage of already created services (that were not intended to be used under SOA). • Service loose coupling, or minimization of the dependencies between services. • Service contract, or adherence to communications agreements. • Service abstraction, or hidden from outside world logic of services (except for service contract). • Service reusability. • Service composability, or as earlier mentioned service orchestration. • Service autonomy, or control over the logic in every separate service. • Service optimization. • Service discoverability, or good description of each service. SOA Strategy SOA Governance Enabling technology Services Architecture Metrics model Behavior and Culture Figure 3.2. Elements of SOA [16] According to Eric A. Marks and Michael Bell [16], SOA consists of the elements, presented in the figure (see figure 3.2.). As seen, SOA strategy is the background of the whole model, which is then driving the governance model and policies. Services are placed in the very centre, as they are the key assets and driving force of an SOA. The enabling technology is surrounding the services to make an SOA possible. Authors also address architecture process, metrics and behaviour and culture issues as influencing factors of the business benefits gained after implementing SOA. In many sources it is stated, that SOA is not a hype as many other “pills of all diseases”, but the way to make a complex IT infrastructure simpler. This is also proved by the various surveys. For example, the latest survey of Amber Point showed that only %1.5 of the 21
  22. 22. businesses that implemented SOA were referring to these implementations as “not successful”. There were no businesses that described their SOA projects as “fiasco”. [19] Among the benefits of SOA are [13]: • From a business perspective, SOA is about modelling the business design. Business executives could gather valuable insights from this model, and identify the problems and risks associated with it. This design could be improved by simply adding/resorting/deleting services that are the main components of the model. Further more, in the same way new business services could be developed helping to respond fast to changes in the market. SOA also gives a much more effective way of communication between business and IT, as is understood by both sides. • From an IT perspective, SOA would help to structure software resources as a set of services, which could be sorted in a way to form other services. SOA would also establish a set of principles that should be followed. All these are thoroughly described and created models and tools. They could be used to develop SOA solutions for automating business design. The main value for IT is that created services could be reused. This saves time of system development. However, except the benefits, SOA as any other novelty carries challenges. The main challenges of SOA implementation, is that it is difficult to implement, manage and control [16]. However, the main reason of these difficulties does not lie in the architecture itself, rather in the organizational, cultural and behavioural aspects of each company [16]. There are some technical issues as well, as there are no standards and very few supporting tools and development platforms present in the market at the moment. Of course these are not the reasons to not implement SOA, but every business that shifts to this model should pay attention to these concerns, as well as some others, like: security, support of long-running transactions and user resistance to change. 3.1.3. Logical architecture model To make it simpler to understand what SOA is all about it is important to present the logical architecture model of SOA components (from the perspective of IT). As SOA is a new trend in the IT and business area, there are no open standards yet. Every software vendor has its own view on what should be under SOA platform and what should not. There are some models of SOA components. However, IBM, a leader in this sphere [20], offers the most complete one. SOA logical architecture model is presented on figure 3.3. 22
  23. 23. Business Innovation and Optimization Services (Integrated environment for design and creation of solution assets) (Better decision making with real-time information) (Manage and secure applications and resources) Interaction Process Information Services Services Services (Enable (Orchestrate (Manage diverse IT Service Management collaboration) and automate data) Development services Enterprise Service Bus Partner Business App Access Services Services Services (Facilitate (Connect with (Build on interaction partners) service with assets) Infrastructure services (Optimizes availability and performance) Figure 3.3. Logical architecture model [13] This logical architecture intends to decompose the functional foundation of the application design. The white spaces between the components are made on purpose, in order to distinguish all parts of the architecture from one another. IBM stresses that this separation helps to focus on skills for separate sections. The core of this model is the green squares: interaction services, process services, information services, partner services, business application services and access services. Other components exist in order to assist the main ones to work properly. It is also very important to note, that all these services have the same interface and the difference among them is the area of usage. All the components that are presented in the design would be briefly described further [13]: • Enterprise service bus (ESB) is the fundamental component of the SOA [13]. All the present within organization services could be accessed via this component. It simplifies the process of invoking the services and makes it possible to use the services whenever they are needed and wherever they would be within the enterprise. IBM calls Enterprise Service bus an “architectural pattern” that facilitates the way of integration of loosely-coupled services. ESB is being discussed in the industry all the time, according to some sources, it is the main component of the SOA model; according to others it is not crucial to have it. [21] 23
  24. 24. • Interaction services are responsible for the presentation of the business design. In other words, these are components that help applications and end-users to communicate. It is also important to understand that end-users are not only human, but could also be sensors, robots, RFID devices and others. • Process services are responsible for compositional logic. The composition is the set of services that makes a business process flow. And process services create the composition mechanisms. • Information services are responsible for the logic of data. These services are present at two levels: on a surface (provide access to the constant data of the business) and inside (ensure the dataflow within organization). • Partner services are responsible for gathering the information about partners (e.g. policies and constraints) and use it in order to connect to them. These services are in some way similar to interaction services and access services. • Business application services are responsible for the core business logic. These are services that are created specially for implementing the business model. They represent basic building blocks for the design of business processes. These services cannot be decomposed, rather connected with other services to form a business process. • Access services are responsible to connect applications and functions into service oriented architecture. This means gathering already created functions and object and use them to compose services. • Business innovation and optimization services are responsible for providing tools and metadata structures to represent the business design, including policies and business goals. • Development services are sets of architecture, development, visual composition, assemble and other kind of tools that facilitate the development process. • IT service management is a set of management tools. These tools are used to monitor the system. • Infrastructure services are themselves created using SOA model. These services are responsible to host the SOA applications and help to provide efficient utilization of resources. This was only brief overview of the main components of the logical architecture model. As mentioned, other companies provide different view on the same thing. However, the main principles remain the same. SOA is an architecture that is based on services, their encapsulation, re-use and loose-coupling. It is services that create the business value and help 24
  25. 25. IT and business worlds to communicate in a proper way. Services could be accessed and used from within the organization with help of the enterprise service bus. 3.2. SAP NetWeaver definition As mentioned, the main purpose of this chapter is to describe SAP NetWeaver, it’s background and basic components. The foundation and principles of this solution were briefly described in the previous sub-chapter. In this sub-chapter SAP NetWeaver would be defined in more depth. 3.2.1. SAP NetWeaver background SAP is considered a lead ERP software vendor and a third independent IT company worldwide. It offers a wide range of business solutions for different industries as well as standard solutions. However, with IT industry becoming more open, the need of integration with other applications is getting more critical. Moreover, users are becoming more computer literate and understand that they should only pay for the functionality they need and not for the whole solution, % 80 of which is not used. Further more, SOA introduction made it possible to connect business and IT in a much better way. These rising in the market trends pushed SAP forward to develop an integration platform for SAP and non-SAP applications: SAP NetWeaver. SAP NetWeaver, as mentioned in the second chapter, was introduced in 2004 as a part of mySAP product group forming an integration platform for mySAP Business Suite solutions. It is a set of capabilities that allow applications work together, build new applications on top of existing ones, and lower the applications’ TCO (Total Cost of Ownership). [22] SAP NetWeaver is a SOA based middleware application and is built using open and accepted by the industry standards. As it is open, it can further be extended with as well as cooperate with other technologies, such as Microsoft .NET, Sun Java EE, and IBM WebSphere. According to SAP, SAP NetWeaver “… provides a unified application development platform that contains the tools, methodologies, rules, user interface patterns, and services that allow SAP, its partners, and customers to build composite applications – either as products for sale or custom applications for use by one company.” [23] The components and solution map of the SAP NetWeaver would be described further in the next subchapter. SAP did not only use, but extended the term SOA to ESA (Enterprise Service Architecture) adding an enterprise as the main component for the architecture. So, as the foundation for ESA, SAP NetWeaver helps to develop current IT landscape into a strategic environment that drives business change of the enterprise. [24] 25
  26. 26. Three main benefits of SAP NetWeaver for the company implementing SAP Business Suite solutions, according to SAP are as follows [25]: • Enhanced Adaptability. As SAP NetWeaver is an integration platform, it helps SAP applications to be integrated with applications already present in the company’s IT landscape. NetWeaver provides an environment to integrate various applications; databases and makes open technologies like web services available to the user. • Lower Total Cost of Ownership. Instead of replacing the existing system with SAP solutions, SAP NetWeaver can help using existing functionality in the new information system. It helps the company to get the maximum from what it already has and easily add other functionality to build the new unified system. Moreover, SAP NetWeaver helps to reduce complexity and makes the system more flexible to the changing processes. All these help to reduce the TCO. • Better Return On Investment. According to SAP, SAP NetWeaver also helps to increase the return on investment (ROI). By using SAP NetWeaver, company’s IT strategies can be synchronized with mySAP Business Suite solutions. This makes the information system more reliable and leads to better assessment services. These in turn lead to financial benefits. With SAP NetWeaver, organizations can meet business needs by implementing IT practices in a flexible approach at low cost. These practices form a NetWeaver solution map, described further in the next sub-chapter. SAP NetWeaver helps organizations to perform the following IT practices [26]: • User productivity enablement. This practice is intended to help users and groups improve productivity (by enhanced collaboration, optimized knowledge management, and personalized access to critical applications and data). • Data unification. Management and unification of master data for improved business processes. • Business information management. This practice is intended to increase the visibility and coherence of the business information. • Business event management. This practice intends to place processes in the right sequence managed by the right people. • End-to-end process integration. Integrate different business applications to work properly as one unified system. • Custom development. This practice helps to rapidly create new applications. 26
  27. 27. • Unified life-cycle management. Automate application management and processes to optimize an application life cycle. • Application governance and security management. • Consolidation. This practice helps to deploy a consolidated technology platform, which is able to allocate computing power according to changing business needs. • Enterprise SOA design and deployment. In order to understand how popular is SAP NetWeaver and other SAP applications, key figures are presented further [27]: • SAP NetWeaver base of customers is still rapidly growing. As of March 2007, there were more than 13760 customer deployments. • SAP has developed more than 1000 enterprise services for the SAP Business Suite applications. • More than 2000 independent software vendors are actively building applications on SAP NetWeaver platform. • There are more than 150 active members of the Enterprise Services Community that develop services for SAP NetWeaver. • Since the launch of SDN (SAP Developer Network) in September 2003, more than 700000 members worldwide have joined it. They are actively working to help the adoption of SAP NetWeaver. • Since the launch of SAP NetWeaver, more than 10000 consultants have been trained to support customers using it. So, as seen, SAP NetWeaver is an integration platform that is used to integrate SAP and non-SAP applications to form the new adaptable to business changes information system. The popularity of SAP NetWeaver is growing as more and more companies are adopting it in their business processes. 3.2.2. SAP NetWeaver components SAP NetWeaver is a middleware that has a set of components and tools. This subchapter would describe the architectural structure, main tools as well as a solution map of SAP NetWeaver. The architecture of the SAP NetWeaver solution according to SAP is defined in the way presented on figure 3.4. As seen, SAP NetWeaver is about integration of people, information and processes. It also has an application platform, to make these integrations possible and two frameworks that support the solution: composite application framework and life-cycle management. The functions of the people integration are: multi-channel access (MI component), collaboration 27
  28. 28. and a portal (EP component). Information integration consists of business intelligence (BI component), master data management (MDM component) and knowledge management (EP component). Process integration is composed of integration broker and business process (XI component) and application platform consists of J2EE and ABAP applications and DB and OS abstraction (AS component). People integration Multi-channel access Portal Collaboration Composite application framework Information integration Life-cycle management Business Knowledge Intelligence Management Master Data Management Process integration Integration Business Broker Process Application platform J2EE ABAP DB and OS Abstraction Figure 3.4. SAP NetWeaver conceptual architecture [28] Further the main components of SAP NetWeaver are described: • SAP NetWeaver Application Server (AS). This is a part of the application platform (from the figure 3.4.). The main task of the application server is to enable and support platform-independent Web services, business applications, and standards-based development. [29] Application server is not a new component in SAP solutions. It was referred as SAP Basis before release 4.6 D. • SAP NetWeaver Exchange Infrastructure (XI). This is a part of the process integration (from the figure). The main task of XI is to deliver open integration technologies that enable process-based collaboration across the extended value chain. [29] SAP XI is responsible to integrate SAP and non-SAP applications and services. • SAP NetWeaver Master Data Management (MDM). This is a part of the information integration. The target of this component is to ensure cross-system 28
  29. 29. data consistency. MDM, as XI, also helps to integrate business processes across the extended value chain. [29] • SAP NetWeaver Business Intelligence (BI). This, together with knowledge management, is a part of the information integration. BI enables to integrate data from across the enterprise and transform it into usable and up-to date business information to speed-up the decision-making process. [29] BI is about very complex reporting. • SAP NetWeaver Mobile Infrastructure (MI). This is a part of the people integration, in particular multi-channel access. The goal of MI is to provide a mobile environment, based on open technologies and standards. This environment would facilitate the development of integrated mobile solutions. [29] • SAP NetWeaver Enterprise Portal (EP). This is also a part of the people integration as well as information integration (in particular knowledge management). Enterprise portal combines business information and applications to enable users to take advantage of all the information resources. [29] It unifies heterogeneous system landscapes into one user interface. • SAP Auto-ID Infrastructure. This component was introduced rather recently. It gives the capabilities to integrate automated sensing devices (e.g. RFID readers and printers, Bluetooth devices, embedded systems, and bar-code devices). [29] • SAP NetWeaver Identity Management. This component is also rather new, it addresses access and authorization issues. Identity Management enables to integrate business processes and helps to integrate systems in a heterogeneous IT environment. [29] Except for components, there are tool enabling to develop and maintain SAP solutions. The tools that are used to maintain SAP NetWeaver and develop further SAP and non-SAP applications are as follows [29]: • Adaptive Computing Controller (central point of control for assigning computing resources and optimizing their use). • SAP NetWeaver Composition Environment. Provides an environment for development, deployment and maintenance of applications that comply with an SOA. • SAP NetWeaver Developer Studio. This tool provides a convenient user interface and quite rich functionality for developing J2EE applications to be used on the SAP NetWeaver basis. 29
  30. 30. • SAP NetWeaver Visual Composer. This tool simplifies the development of the portal content and analytics’ applications. • SAP Solution Manager. This is a very important tool that is used in many areas, including customization and support of SAP applications. As a rule, without this tool being used, SAP is not providing any support for SAP ERP applications. The latest SAP NetWeaver solution 2004s was presented in a form of the functionality map. Although having the same architecture (described earlier in this chapter), solution was “sliced” to form an understandable by the business people solution. This solution is presented on Figure 3.5. IT practices IT scenarios User productivity Running an Enabling Business Mobilizing Enterprise Enterprise enabler enterprise user task mngt business knowledge search portal collaborat. processes mngt Data unification Master data Master data Central master Enterprise data harmonization consolidation data management warehousing Business Reporting, Business Enterprise data Enterprise Enterprise information mngt query and planning and warehousing knowledge search analysis analytic serv. management Business event Master data harmonization Master data harmonization management End-to-end Enable app-to- Enable Business process Enable platform Business process integr. app processes business-to- management interoperability task business proc. management Custom Developing, configuring and adapting Enabling platform interoperability development applications Unified life-cycle Software life-cycle management SAP NetWeaver operations management App governance Authentication and single sign-on Integrated user and access management and security mngt Consolidation Enable SAP Master data Enterprise Enterprise platform NetWeaver consolidation knowledge data interoperab, operations management warehousing ESA design and Enabling enterprise services deployment Figure 3.5. SAP NetWeaver solution map [30] As seen from the figure, the solution was divided into IT practices (general IT issues) and different IT scenarios according to SAP NetWeaver. IT practices were briefly described in the previous sub-chapter. Each IT practice has several IT scenarios. This can also be seen from the services perspective, where IT scenarios could be seen as services (as business people understand them) for the general IT practices offered by SAP NetWeaver. As mentioned, the 30
  31. 31. components and SAP NetWeaver architecture did not change. It was just presented from another perspective. After describing the background and the architecture of SAP NetWeaver platform, it is important to compare it to the similar products that are present in the market. So, in the next sub-chapter main competitors of SAP NetWeaver would be described. 3.2.3. Overview of SAP NetWeaver competitors Major software vendors (IBM, Microsoft, Oracle, SAP) see the potential of the new architectural trend and offer their enterprise SOA solutions as a foundation for business applications. These solutions as SAP NetWeaver could be called an SOA middleware. It is quite hard to distinguish the main competitors of NetWeaver, as each software vendor understands SOA in its own way, putting one or another concept forward. Some software vendors have one solution that covers all enterprise SOA principals, while others have many applications for different purposes. Moreover, the purpose of SAP NetWeaver is to integrate SAP and non-SAP applications and should not be used standalone without SAP Business Suite, while other enterprise SOA applications can be used standalone. To make it easier in selecting the right software products to compare with SAP NetWeaver two main criteria are defined. Firstly, a middleware should be based on SOA concepts, and secondly, it should be or have as a component a platform to integrate and develop different business applications. According to these criteria, there are four main solutions in the market that can be compared to SAP NetWeaver: IBM Websphere, Microsoft BizTalk, Oracle SOA Suite and BEA AquaLogic. There are also some other small companies that offer similar solutions like: Progress Sonic ESB, iWay Service Manager, TIBCO BusinessWorks, Iona Artix, but they would not be described, as they are too small to be compared to SAP NetWeaver. IBM Websphere WebSphere is the integration software platform suggested by IBM. It lies in the center of IBM's “On Demand” Business strategy. WebSphere includes the whole infrastructure of the middleware: servers, services, and tools needed to manage and develop new applications, on demand Web applications as well as cross-platform and cross-product solutions. [31] Unlike NetWeaver, WebSphere does not integrate specific applications. Instead, it was designed “... as a general-purpose infrastructural abstraction and integration layer to hardware, databases, existing ERP systems and other enterprise applications.” [32] However, IBM WebSphere as SAP NetWeaver also focuses on integration of people, processes and information. It also provides tools for this integration. [33] 31
  32. 32. IBM WebSphere platform is composed of these (and some others) software tools [34] that comply with the SOA architecture presented in the earlier sub-chapter: • Application Servers provide a platform to run interoperable applications. • Business Integration Servers provide an infrastructure for integrating applications and automating business processes. • Commerce Products provide basic marketing, sales and order processing functionality in an integrated package. • Data and Information Management Software provides storage, access and analysis of data in any environment. • Mobile, Speech and Enterprise Access Middleware provides support for mobile, speech, and rich client access. • Networking Software provides integrated directory, connectivity and security between users and applications. • Organizational Productivity, Portals and Collaboration Software provides instant messaging, Web conferencing, and collaborative portals. • Software Development Tools provide design and construct applications that support the deployment process. • Systems and Asset Management Software provides monitor, control and optimization applications to facilitate the management of complex physical assets and computing resources. IBM does not promote a unified view onto all WebSphere product group members as SAP does with the NetWeaver. Instead, most WebSphere products are compatible with open standards. This allows combining IBM’s products with other standards-compliant products. This can help creating a custom platform for enterprise IT systems. To sum up, according to Gartner report 2007, IBM is the leader of SOA applications at the moment [20], so WebSphere covers all of the SOA functionality and could be used as an example. However, it has a different than SAP NetWeaver focus. IBM is focusing on support of its customers in finding “best-of-breed solutions” [34] for enterprise IT challenges, using WebSphere family products that comply with other applications based on open standards. IBM does not have ERP software that could be integrated on the SOA middleware, so its middleware is used as a background for other software components (among them could be SAP NetWeaver). Oracle Fusion Oracle Fusion Middleware is a portfolio of based on standards software products that automate different services. It includes J2EE and developer tools, integration services, business 32
  33. 33. intelligence, collaboration, and content management systems. [35] Many of the products included under the Oracle Fusion Middleware name are not themselves middleware products. Fusion Middleware is generally a re-branding of many Oracle's products outside of core database and applications software offerings. According to Oracle, Fusion Middleware is designed to support development, deployment, and management of Service Oriented Architecture. It includes what Oracle calls "Hot-Pluggable" architecture, which allows users to integrate other applications and systems from different software vendors such as IBM, Microsoft, and SAP AG. [35] Oracle Fusion Middleware includes applications, presented on Table 3.1. [35] Table 3.1. Oracle Fusion Middleware products • Application Server • EDA Suite • Business Integration • Identity Management • Business Intelligence • Middleware for Fast-Growing Companies • Business Process Management • Oracle Fusion Middleware for Applications • Coherence In-Memory Data Grid • Portal • Collaboration Suite • Service Delivery Platform • Content Management • SOA Suite • Data Integrator • WebCenter • Developer Tools The most important component of Oracle Fusion to compare with SAP NetWeaver platform is, Oracle SOA Suite. This suite includes a complete set of service infrastructure components, which could be used for building, deploying, and managing SOA. Oracle SOA Suite enables creation as well as management ant orchestration of services into business processes. [35] Oracle SOA Suite consists of [36]: • BPEL-based Process Manager that facilitates the composition of services into business processes. • Business Activity Monitoring (BAM) solution provides a real-time visibility into operation and performance of business processes and services. • Business rules engine facilitates capture and automation of business policies. • Multi-protocol Enterprise Service Bus (ESB) as mentioned before helps to connect applications and route messages. • Web services management and security solution helps to enforce authentication and authorization. • Services registry that helps discovering and managing the lifecycle of services. 33
  34. 34. • Integrated Service Environment (ISE) helps to develop and deploy services. [36] Despite Oracle claims that Fusion Middleware is not a reaction to SAP NetWeaver and position itself as a primary brand in the market, [37] it is obvious Oracle wants to strengthen its position in Enterprise Applications market with the help of SOA architecture. Oracle wants to establish a powerful base for its Oracle E-Business Suite that is a competitor of mySAP Business Suite. [38] Oracle made a big step towards SOA market by acquiring BEA as well. After acquiring BEA, it is not clear if Oracle keeps BEA solutions (especially Aqualogic) as independent software or puts it under Fusion Middleware brand. Whatever strategy they will choose, it is very obvious that Oracle will strengthen it is position in SOA market and competition among IBM, Oracle and SAP will become fierce. BEA AquaLogic BEA AquaLogic is a software suite developed by BEA Systems for managing SOA. BEA AquaLogic sees business as SOA most important subject, giving the ability to affect changes and facilitating flexibility to meet rapidly changing business needs. BEA reduces business dependency on IT by introducing new software that facilitates the collaboration of business and IT participants to meet strategic business needs and drives innovation. According to BEA “…AquaLogic provides a unified, agile platform for creating and managing business processes, portals, collaborative communities, and composite applications. It opens new channels of collaboration within and across organizational boundaries, so business can grow with the flow.” [39] BEA AquaLogic suggests an open and independent platform for developing, implementing and managing service-oriented architecture (SOA) in various computing environments, including .NET, Java or legacy systems. [40] BEA AquaLogic enables software services to respond faster to business changes [40]. As it is independent, BEA AquaLogic lets services built on almost any platform (J2EE, .NET, SAP, Oracle, IBM, and others) be found, used and managed. [41] BEA Aqualogic includes the following products: [42] • BEA AquaLogic BPM suite is a set of tools for business process management (BPM). This component combines workflow with enterprise application integration functionality. The suite consists of tools for business and technical people. With its help, business people can create business process models and IT people can create business applications from these models. The outcome is deployed on a production server. From there back-end applications can be accessed via portal. 34
  35. 35. • BEA AquaLogic User Interaction is a set of tools that facilitates the creation of portals, collaborative communities and composite applications. These could work on cross-platforms. • BEA AquaLogic Enterprise Repository. This is an essential element for effective SOA life cycle governance. It helps managing the metadata for any type of software asset (starting from business processes and Web Services to patterns, frameworks, applications, and components). Enterprise Repository maps the relationships that connect assets to improve impact analysis, facilitate software reuse, and measure the impact on the bottom line. • BEA AquaLogic Service Bus • BEA AquaLogic Service Registry provides a repository where services can be registered and reused for services orchestration. • BEA AquaLogic Data Services Platform (previously Liquid Data) provides tools for creating and managing different data services. • BEA AquaLogic Enterprise Security is a security infrastructure application for distributed authentication and other security services. Recently BEA was acquired by Oracle, so it is hard to say what would be the outcome of this acquisition and how BEA solutions would be used in Oracle Fusion Middleware. It is obvious though, that Oracle with BEA solutions might become a very strong player in the SOA arena. Microsoft middleware Microsoft does not have one specific solution for SOA. It needs an integration of several Microsoft solutions to establish SOA. Companies can use some of these solutions with SAP NetWeaver as well. So it is hard to compare Microsoft solutions with SAP NetWeaver. These solutions could be treated are parts of Microsoft SOA solutions [43]: • .NET Framework. The .NET Framework is the managed code-programming model for Microsoft Windows. Developers might use the .NET Framework to build services and applications in an SOA. • BizTalk Server. BizTalk Server 2006 R2 provides connectivity, messaging and business process services to an organization's service oriented infrastructure. • Visual Studio Team System. Microsoft® Visual Studio® 2008 Team System is an integrated Application Lifecycle Management (ALM) solution comprising tools, processes and guidance to help everyone on the team improve their skills and work more effectively. 35
  36. 36. • System Center. Center solutions are tuned to simplify management of the systems and applications the company already has implemented. This includes Microsoft SQL Server, Microsoft Exchange Server, Microsoft BizTalk Server, Internet Information Services and the Microsoft .NET Framework. • SharePoint. Microsoft Office SharePoint Server 2007 is an integrated suite of server capabilities that can help improve organizational effectiveness. It provides content management and enterprise search, accelerates shared business processes and facilitates information sharing for better business insight. • Oslo. This software product helps to easier design, develop, implement and control different business applications. It is a composition of other products: BizTalk Server, System Center, Visual Studio, BizTalk Services and .NET Framework. As seen, Microsoft still does not offer comparable to NetWeaver solutions, although it has an ERP system (Microsoft Dynamics). However, Microsoft is working towards SOA as this is the future in the business and IT market. So, this chapter described SOA as a foundation of the SAP NetWeaver integration platform, described NetWeaver itself, mentioning the main components of this platform and made a brief overview of the competitor solutions present in the market. Next chapter would answer the main research question of the thesis – how did the development of further SAP business solutions change after the introduction of SAP NetWeaver. 36
  37. 37. 4. SAP NetWeaver impact on development of SAP solutions After description of SOA architecture and SAP NetWeaver, it is crucial to answer the main research question of the thesis, which is “how SAP NetWeaver influences further development of SAP business solutions”. There are certain things that have changed after the introduction of SAP NetWeaver and the most important of them are: • change in SAP architecture; • change in integration of the suite components; • change in development of new applications; • change in implementation methods. So, these would be described in more depth in this chapter. The last subchapter would discuss the results of the survey carried out in order to find out the advantages and disadvantages of SAP NetWeaver to SAP customers, developers and consultants. 4.1. SAP NetWeaver impact on SAP architecture As SAP NetWeaver is an integration platform, one of the things that have changed after its introduction is of course SAP architecture. However, as was mentioned earlier when analyzing the evolution of IT architectures, SAP architecture changed gradually and SOA, or in this case its middleware NetWeaver, was rather an evolution than a revolution. The architecture of the two-tier SAP, or SAP R/2, could be visualized as shown on figure 4.1. As this is two-tier it is a client - server architecture, where client is able to perform tasks even without accessing the server for some time. It is seen, that clients can use few modules, connected to each other (the modules are: accounting, material management, production planning, etc.). Client 1 RF (Financial Accounting), RA (Assets Accounting), RK (Cost Accounting), RK-P (Projects), RP (Human Resources), RM-INST (Plant Maintenance), RM-QSS Server (Quality Assurance), RM-MAT (Materials Management), RM-PPS (Production Planning and ABAP/4 Control), RV (Sales and Distribution) Data dictionary Dynpro Client N Interfaces RF (Financial Accounting), RA (Assets Accounting), RK (Cost Accounting), RK-P (Projects), RP (Human … Resources), RM-INST (Plant Maintenance), RM-QSS (Quality Assurance), RM-MAT (Materials Management), RM-PPS (Production Planning and Control), RV (Sales and Distribution) Figure 4.1. SAP R/2 architecture [44] 37
  38. 38. In the next generation SAP R/3 as the name suggests, three-tier architecture is started to be used. So the user is accessing application server and then database server via interface and cannot work without this access. Moreover, the functionality and number of modules rises as seen from figure 4.2. Now users can also automate workflow processing, use industry specific and project systems functionality. Presentation (SAP GUI) BC (Basis), AM (Asset Management) CO (Controlling), FI (Financial Accounting), HR (Human Resources), IS (Industry Specific Solutions), PM (Plant Maintenance), PP (Production Planning), PS (Project System), QM (Quality Management), SD (Sales and Distribution), MM (Materials Management), WF (Business Work Flow) Application Server 1 … … Database … Application Server N Presentation (SAP GUI) BC (Basis), AM (Asset Management) CO (Controlling), FI (Financial Accounting), HR (Human Resources), IS (Industry Specific Solutions), PM (Plant Maintenance), PP (Production Planning), PS (Project System), QM (Quality Management), SD (Sales and Distribution), MM (Materials Management), WF (Business Work Flow) Figure 4.2. R/3 three tier architecture [45] The evolution of architectures did not stop on the three-tier architecture model, and the next step is SOA. Starting from SAP ECC 5.0 (or mySAP ERP Edition 2004) NetWeaver is started to be used and the architectures model changed. The architecture shift influenced by SOA (or in SAP case SAP NetWeaver) is presented on figure 4.3. It is seen that NetWeaver empowers different users to have different user-specific interfaces and allows to access data from different databases based on what kind of data is to be accessed. This architecture model also includes workflows connected to processes for every separate user. 38

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