Building the Smart Business:

Connecting People,
Processes, and Information

! "#
Building the Smart Business: Connecting People, Processes, and Information

CONTENTS

INTRODUCTION 1

THE SMART BUSINESS: PEOPLE, PROCESSES, AND INFORMATION 2

Business Processes 2
Business Transaction Processes 3
Business Intelligence Processes 3
Business Collaboration Processes 4
Business Information 4
Business Users 4

HOW TO BECOME A SMART BUSINESS 6

Issues for the Smart Business 6
Business Information is Difficult to Locate and Use 7
Business Intelligence is Complex and Not Immediately Actionable 7
Business Information is Not Being Utilized to Make Timely Decisions 8
Solutions for the Smart Business 9

AN INTEGRATED FRAMEWORK FOR THE SMART BUSINESS 12

User Interaction Integration 12
Business Process Integration 12
Application Integration 13
Data Integration 15
Choosing the Right Integration Solution 17

CUSTOMER CASE STUDY: ROHM AND HASS COMPANY 18

The Enterprise Portal 18
Knowledge and Information Management 18
Employee and Manager Information Self-Service 19
Collaboration 19
Business Intelligence 19
Future Directions 20

Brand and product names mentioned in this paper may be the trademarks or registered trademarks of their
respective owners.

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Building the Smart Business: Connecting People, Processes, and Information

INTRODUCTION
$ % Companies are under constant pressure to boost profits, reduce costs, and increase
revenues. At the same time, competitive pressures require organizations to react
! faster to solve business issues and meet customer needs. To satisfy these demands
& & businesses must work smarter and be more agile if they are to survive in this tough
' ! business climate. Working smarter means providing executives and line-of-business
(LOB) users with easy access to the business processes and information they need to
make informed business decisions. Becoming more agile requires business
information be delivered to business users in a timely manner, so that they can react
rapidly to business needs and issues.

( ! To satisfy the ever-increasing demand for business information, organizations are

! ) deploying a wide variety of technologies whose objectives are to supply business
users with the business information and services they require be successful in their
& jobs. The urgent drive to deploy these technologies, however, often means that
organizations react to specific business needs without adequate regard as to how the
technologies being used will work together to ensure that information is accurate,
! & timely, and relevant. The result is that information delivered to business users is
often inconsistent, inaccurate, and frequently out of date. To solve these problems,
companies must, instead of using individual and poorly-integrated product offerings,
employ a comprehensive and integrated suite of information and collaborative
solutions that work cohesively together to meet the requirements of business users.

The objectives of this paper are to explain the importance of a framework for
integrating business users, processes, and information in a cost-effective and timely
manner, and to show how new and evolving technologies contained within such a
framework enable an organization to work smarter and become more agile.

The first section of the paper provides an overview of why an integrated environment
is essential for enabling the smart business. The second section looks at requirements
for smarter decision making, and reviews recent innovations in information and
collaboration technologies that support those requirements. The third section looks at
how business process, information and collaboration technologies can be integrated
into an overall framework, and reviews the pros and cons of using best-of-breed
products versus employing an integrated product suite from a single vendor. This
section also discusses how SAP NetWeaver supports such a framework. The last
section reviews how products from SAP are being used by Rohm and Hass Company
to create a smart decision-making environment.

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THE SMART BUSINESS: PEOPLE, PROCESSES, AND

INFORMATION
A smart business seamlessly connects people with business processes and business
information (see Figure 1) to enable the organization to make informed and timely
decisions, and optimize the business to maximize revenues and profits. This section
of the paper provides an overview of the smart business, and explains why an
integrated environment is essential to success in enabling a company to work smarter
and become more agile.

*+
) executives &
) LOB managers

office staff customers,

& mobile partners,
workers & suppliers

secure web single

interface sign-on

external
information
collaborative
information
Business
collaboration
processes
plans, budgets
transaction forecasts
data historical data
integrated & metrics
master data near real-
Business Business time data
transaction intelligence
processes processes

BUSINESS PROCESSES
Business processes automate core business tasks. These tasks may involve business
transaction processes for managing day-to-day business operations, business
intelligence processes for analyzing and optimizing business operations, and
business collaboration processes that allow business users to communicate and share
information about business operations. When combined, these processes enable
business users to run, optimize, and communicate about all aspects of business
operations (see Figure 1).

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Business Transaction Processes

Business transaction processes run applications that support day-to-day business
activities such as receiving customer orders, managing inventory, shipping products,
billing customers, and so forth. A record of the data associated with this processing
is stored in transaction data files and databases.

( During business transaction processing, transaction master data about customers,

suppliers, products, and so forth often becomes scattered across multiple systems.
There is a need in organizations to consolidate and coordinate this master data so
that it can be used by other business processes to present a single view of the master
data to business users. A single view of customer data for managing and supporting
& customer relationships is an example of the use of integrated master data.

Business Intelligence Processes

Business intelligence (BI) processes monitor and analyze business transaction
processes to ensure that they are optimized to meet the business goals of the
organization. These goals may be operational goals that affect daily business
operations, tactical goals that involve short-term programs such as marketing
campaigns, or strategic goals that entail long-term objectives like increasing
revenues and reducing costs.

To date, most BI processes have focused on reporting and analyzing business

& operations, i.e., measuring business performance. The direction of the industry is
! toward managing business performance by using business intelligence to align
business operations with the tactical and strategic goals of the organization. This is
achieved by extracting transaction data, and integrating it in a data warehouse for
processing by BI performance management applications. These BI applications
% convert the integrated, but raw, warehouse data into actionable business information
that shows how actual business performance compares with business goals and
forecasts.

Business users employ their business expertise to evaluate the actionable business
information produced by BI performance management applications. Applying
business expertise to business information creates business knowledge. This
knowledge can be used to determine what actions (if any) need to be taken to align
business activities with business goals, and what business processes need to be
modified to support those actions. This creates a so-called closed-loop decision-
making and action-taking system for managing and optimizing business operations.

An efficient and integrated closed-loop system must enable a business to work

! smarter by closely aligning business performance to tactical and strategic business
% , , goals. This creates a feedback loop where positive activities are recognized and
! & encouraged, while value-detracting activities are either improved or eliminated.

The need for organizations to be more agile, however, requires that this closed-loop
process also be employed to optimize day-to-day business activities. At present, most
data warehouses do not provide the near-real-time or low-latency transaction data
required for such processing. The solution is to use BI applications against live
transaction data, or to capture transaction data in-flight, and integrate it into a low-
latency data store (which may be an extension to an existing data warehouse). We
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Building the Smart Business: Connecting People, Processes, and Information

will discuss low-latency data and near-real-time decision making in the next section
of this paper.

Business Collaboration Processes

Business collaboration processes enable business users to communicate and share
! information about business transaction and BI processes, and to make decisions and
take actions to optimize and improve business activities. Business collaboration
, processes are essential to a closed-loop system. At present, most closed-loop
, processing is manual in that business users employ collaborative services to
, communicate and share information via e-mail, instant messaging, and Web
conferences. In some organizations, however, manual business collaboration
processes are being automated to improve the speed of the decision-making process.
This is being done by encapsulating business users’ expertise in a set of business
rules, which are then used by a rules engine to automate action taking. Not all
business processes lend themselves to automation, but automating activities such as
granting loans, issuing credit cards, and processing claims for low-risk clients and
customers can have a significant competitive advantage.

BUSINESS INFORMATION
Business transaction, business intelligence, and business collaboration processes
create a wide range of different types of structured and unstructured business
information. Business transaction processes store transaction data in data files and
databases, whereas BI processes employ data warehouses and low-latency stores to
handle integrated data transaction data and analysis results. Business collaboration
processes, on the other hand, encapsulate communications and business knowledge
generated by business users in documents, spreadsheets, e-mails, and so forth. These
various types of information are typically managed by a variety of file and database
systems that are dispersed throughout the organization.

( Business decisions may take some time to make, and may involve actions that cycle
round the closed-loop process several times. There is a need, therefore, for business
! users to be able to have a single tool that enables them to access and track various
types of business information over a period of time, and that also allows them to
! share business knowledge and collaborate with other users inside or outside of the
organization. This is important not only for managing the business effectively, but
also to be able to respond rapidly to legislative reporting requirements. Such a tool is
a called an enterprise portal, and is discussed in more detail in the next sub-section.

BUSINESS USERS
" To make rapid informed decisions, business users need access to personalized
& business content from any place at any time, using both office-based and mobile
! devices. An enterprise portal satisfies this need by providing business users with an
integrated and secure Web interface to enterprise-wide business content, including
! business transaction and BI applications, structured and unstructured data, and so
forth.

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An enterprise portal includes a content management system (or interfaces to external

content management systems) for organizing and controlling shared information that
is viewed through the portal. Many portals also provide collaboration facilities that
allow portal users to communicate with each other and share and exchange
information.

Portals provide secure and single sign-on facilities that enable them to be employed
both inside and outside of an organization. Internal portals are frequently used to
improve the usability of corporate intranets by personalizing information and
increasing information self-service. External portals are used to enable the
interchange of business content with customers, suppliers, and other key business
partners.

" An enterprise portal is destined to become the business users’ desktop by providing
! all of the business content they require to do their jobs. A portal solves the problem
! ' of locating information because it personalizes and secures business content to match
each user’s role in the organization, making it much easier to find and access
information. A portal also solves the issue of relating different types of business
information (business transaction data, business intelligence, documents and reports,
e-mail, and so forth) since it employs a business taxonomy to provide an integrated
view of the many different types of business information that exist in an
organization.

& The above discussion outlines why business processes, business information, and
, business users need to be integrated to support a smart and agile business
organization. In reality, organizations today do not have the integrated business
decision-making and action-taking environment outlined here. Most of them have
instead deployed a variety of non-integrated information and collaboration
! technologies and products that cannot support the needs of a smart and agile
business. In the next section of this paper, we discuss this issue in more detail, and
review requirements for becoming a smart business.

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HOW TO BECOME A SMART BUSINESS

A smart business is one that uses its employee expertise and information assets to
help make informed and rapid business decisions, and to take action to align its
business with operational, tactical and strategic business goals. This section of the
paper explains how organizations can leverage these assets and exploit modern
technology to become a smart business. It discusses issues that exist in current
information and collaboration technology deployments, offers some solutions to
these issues, and identifies key new technology features that enable business users to
make faster, more informed, decisions.

ISSUES FOR THE SMART BUSINESS

Most companies have successfully installed a variety of technologies that support
! business user interaction, and the running and analysis of business processes. The
problem with these solutions is that they have been installed by different groups
% within the IT organization, and support differing business needs because they have
! been used to meet the objectives of individual business projects. As a result, business
users face many obstacles when trying to understand and optimize business
operations with the goal of increasing revenues, reducing costs, and improving
employee, customer, and business partner satisfaction.

1. Business users find it difficult collaborate on and access the many different types
of business information they need to do their jobs. In most installations, this
information is scattered across many different systems, and involves a complex
web of security and logon procedures.

2. Business users find business intelligence applications both difficult and time
consuming to use. This is not only because of the complexity of many BI tools,
but also because the information produced by these tools is not tied directly to
business processes, is not immediately actionable, and often requires further
analysis by experienced users before it can be employed to make informed
business decisions.

3. Business users cannot use business information to make timely and near-real-
time decisions because the information is often inconsistent, inaccurate, and out
of date.

Most of these problems concern the currency and accuracy of business information,
and how information is accessed and processed by business users in the decision
making process. These issues must be resolved if the full value of an organization’s
information and employee assets is to be realized, and the organization is to become
a smart business. Each of these issues is discussed in more detail below, together
with suggestions on how new and evolving information and collaboration
technologies can assist in their resolution.

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Business Information is Difficult to Locate and Use

Business users require secure access to many different types of related business
information such as transaction data, business intelligence, e-mails, marketing
collateral, advertisements, press releases, product documentation, and so forth, in
order to have a complete picture of all the business activity that is related to the
business topic or issue that is being addressed.

Business users can employ a number of tools to access and collaborate on business
information, but often these tools are located on disparate systems, require different
logon IDs and passwords, and contain inconsistent data that is difficult to access and
search. A large bank, for example, discovered that call center support staff typically
had to access over forty different systems during the course of a day when handling
customer inquiries.

Information access is made more difficult by the need to expand the use of business
information to a wider audience of line-of-business (LOB) users who often have
! limited computer skills, or who have little time to use complex tools. Business
- information, therefore, needs to be made easier to access, and should be tailored to
! suit the needs and skills of individual business users. As we discussed in the first
, ,! section of this paper, an enterprise portal offers a solution to this problem.

A portal not only enables user collaboration and access to all types of business
information, but also provides business users with a single interface to enterprise-
wide business content that can be personalized to each user’s skills and role in the
organization. A portal not only supports desktop business users, but also mobile
workers, such as salespeople, who need to use wireless and mobile devices to access
business information.

Business Intelligence is Complex and Not Immediately Actionable

In a BI system, data is extracted from business transaction systems and integrated in
' & ) a data warehouse for analysis by BI applications. Although a BI system can provide a
) business user with a wealth of information about business operations, the user must
. proactively access the BI system to analyze business processes to determine if
business goals are being met and if any problems exist that require action.
Furthermore, the user must have in-depth knowledge of business processes and
operations in order to act on the results of this analysis. Many users simply don’t
have the time, inclination, or required skills to use a BI system.

To solve these problems, BI analysis applications need to do more than simply

provide raw measurements, or so-called metrics, about business performance. These
measurements need to be put into a business context, and BI applications should
! compare performance metrics to business goals, and produce easy-to-use reports and
! - scorecards that quickly indicate to business users where action is required. A portal
is an ideal vehicle for delivering performance scorecards to users. Another option is
to alert users via e-mail or a mobile device, when goals are not being met.

This approach to business problem solving enables BI to be made more actionable,

and enables a BI system to be used not only to measure business performance, but
also to manage it. This style of BI processing is called business or corporate
performance management. Rather than just producing metrics about current sales
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Building the Smart Business: Connecting People, Processes, and Information

and product inventory, for example, a performance management application can

show how sales figures are tracking to sales objectives, and can identify situations
where the supply chain is not satisfying the demand for products.

Business Information is Not Being Utilized to Make Timely Decisions

A BI system integrates data from disparate transaction data files and databases into a
data warehouse. This approach provides clean and consistent data, and enables a
historical record of business operations to be maintained. Such a system is used for
strategic planning and tactical analyses, and to provide early indications that long-
term and tactical business goals are not being achieved.

/ ! As mentioned earlier, less use has been made of BI for managing and optimizing
day-to-day business operations. This is because most data warehouses contain
historic, rather than low-latency transaction data. A BI system, however, can be used
% , , for driving day-to-day business operations if the data warehouse can be enhanced to
! provide access to low-latency business transaction data. As shown in Figure 2, the
action time between a business problem occurring and a user taking action to resolve
it is dependent not only on how long it takes to analyze information about the
problem, deliver an alert to the user, and the user to take action, but also on the
latency of the information being analyzed. The lower the latency of data in a data
warehouse, the faster users can react to business problems.

+
(
Business Data ready Information Action
! event for analysis delivered taken

data analysis decision

latency latency latency

user action
time

( Updating a BI system with low-latency transaction data is sometimes described as

! real-time data warehousing. This term is rather misleading since it suggests a BI
! ) system can be used to manage business operations in real time. As already discussed,
there will always be a latency between an event occurring and the user taking action.
! Also, not all situations require instant action. Detecting a potentially fraudulent
credit card transaction should occur in as close to real-time as possible, but
determining that a store has run out of a specific product is not as urgent. The
concept of real time must be related to the business need, and right time is, therefore,
a better term to use than real time.

When business user action times are not fast enough to meet business needs, rules-
driven decision-making applications can be used to automate the decision-making

1
This figure is based on a concept developed by Dr. Richard Hackathorn of Bolder
Technology.

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process. These applications receive alerts and use business rules to determine what
actions need to be taken. These action rules encapsulate a business user’s expertise
and are defined to decision-making applications by experienced business users. An
example of an automatic action would be to sell stocks if stock market activity is
causing an investor’s portfolio to exceed certain predefined risk levels.

( & The use of a low-latency data store in a data warehousing environment causes
, considerable confusion because this data may be used not only by BI processes, but
also by business transaction processes. The motivation in both cases for creating a
low-latency data store, however, is to integrate and cleanse transaction data, and to
put the data in a format that can be understood and used by business users.

For BI processing, a low-latency store can be used for near-real-time action taking
(optimizing Web store-front product offers, for example), and for staging transaction
data into a data warehouse for strategic planning and tactical analysis. For business
transaction processing, a low-latency data store can be used for transaction data
reporting, and as a base for new business transaction applications, the staged
migration of older legacy applications, and the propagation of transaction data to
downstream applications.

SOLUTIONS FOR THE SMART BUSINESS

From the discussion above several new and improved information and collaboration
technologies can be identified that can help companies solve usability issues, and
enable them to become smart businesses through informed and faster decision
making and by using business information to enable efficient business operations.

• A business user portal can secure, access, manage, and tailor all the types of
business information to suit the needs and skills of individual business users, and
can be employed by desktop and mobile business users to collaborate and share
information with each other.

• Strategic and tactical BI performance management applications compare BI

results to business goals, and alert users when goals are not being met.

• Right-time and integrated transaction data enables performance management

and reporting applications to be used for driving day-to-day operational decision
making.

• Rules-driven decision-making applications automate the decision-making

process for near real-time action taking.

( A wide, and sometimes confusing, range of solutions are now offered by vendors to
0 enable an organization to become a smart business. When selecting a solution for a
& project it is important to base this decision not only on the features it provides, but
!0 & ) & also on its ability to satisfy business requirements, and on its capability to deliver a
( $ low overall total cost of ownership (TCO). The test of any new project is whether it
helps an organization achieve its business objectives, and whether can it do so with a
low TCO.

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1 Not all technologies are appropriate for all businesses. As with all new technologies
! the benefits need to be assessed carefully, and the benefits need to be implemented in
a phased manner to ensure successful deployment. Success will also be heavily
! dependent on whether business practices can be improved and business users trained
to exploit the benefits offered by the new capabilities.

Figure 3 illustrates a possible roadmap for implementing the new and enhanced
facilities identified earlier. As shown in the figure, one approach is to deploy these
technologies in the following sequence.

1. Implement portal and Web-based business content delivery and

collaboration – this makes it easier for business users to locate and access
business content, and to share it with other users both inside and outside of the
organization.

2. Implement the delivery of actionable business intelligence and alerts to

business users – this enables business users to react rapidly to business
problems without the need for the skills and time to understand and use BI tools.

3. Consider automating certain business decisions and actions – this enables

organizations to respond rapidly to business issues and questions, while at the
same time decreasing user workloads.

4. Evaluate areas of the business where right-time decision making offers

business benefits and competitive advantage – this brand new technology is
immature and complex, but it has the potential to significantly improve business
efficiency and competitiveness.

! &
Right-time and
Right-time
event-driven
processing technologies

Automated
Automated
decision-making
processing applications

BI Actionable BI
performance and business
management alerts

Information Portal and Web-based

access & information delivery
analysis and collaboration

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Figure 3 is only one possible scenario. Many others exist, and the most appropriate
one to use will depend on business needs and the return on investment (ROI) to the
business of any given technology. As always, it is important to have a business
requirement for new technology, rather than to simply install technology for
technology’s sake.

( As new business information and collaboration technologies and products are added
) % to an IT system it is important that they are integrated and work cohesively with
! existing solutions. To minimize the integration effort, organizations need to design
an integration framework into which new business information and collaboration
! products can be plugged based on business requirements. Lack of an integrated
framework leads to stovepipe business applications and information silos. The next
section of this paper discusses such a framework in more detail.

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AN INTEGRATED FRAMEWORK FOR THE SMART

BUSINESS
# The previous two sections of this paper demonstrate how business process, business
- intelligence, and business collaboration technologies can be used together to provide
business information and collaboration services that enable a company to become a
smart business. The convergence of these technologies means that business
& information and collaboration products can no longer exist in a standalone or poorly
integrated environment – they must be tightly integrated into a single framework (see
Figure 4) that can adapt to changing business requirements and technology
evolution. To explain how this integration is achieved, we will review the four levels
of integration in IT systems and show how business process, business intelligence,
and business collaboration technologies can be integrated cohesively in an IT
system.

The four levels of IT integration are: user interaction, business process, application,
and data integration. Many technologies and products fit neatly into one of these
categories, but as we will see, there is a trend in the industry toward products
supporting multiple integration approaches, and as a result the dividing line between
these four levels of integration is not always clear cut.

USER INTERACTION INTEGRATION

User interaction integration involves providing users with a single secure interface
that enables them to collaborate and share information with each other. This
interface should provide a single view of business transaction data, business
intelligence, and business collaboration information. An enterprise portal is an
example of a product that supports user interaction integration.

# ! A key issue with integration at the user interaction level is that although the business
! user is given a single view of multiple disparate systems, this view often highlights
the lack of business process and data integration between those systems. This is why
portal vendors are now adding the ability to support composite business processes
that add a business semantic layer between the user interaction interface and
underlying business processes. A composite process interacts with both business
transaction and BI processes and applications, and thus removes the need for
business users to know which physical system contains what business information.
This semantic layer also enables collaborative workflow processes to be added into a
portal, which means that portals are beginning to support business process
integration (see discussion below) in addition to user interaction integration.

BUSINESS PROCESS INTEGRATION

Business process integration allows organizations to use business processes both
within and across organizations seamlessly. Business process design tools enable

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developers to analyze and model business processes. Business process automation

and integration tools then implement these process models using underlying
application integration technologies, which in turn manage business transaction and
BI applications, and business user interaction. The key benefit here is that the design
process is isolated from the physical implementation by the business semantic layer
built into the process models.

# It is also important to point out that business process automation tools not only
manage the implementation of distinct applications, but also monitor the flow of
! business events between those applications, and between applications and business
users. Many process management tools are adding performance monitoring
capabilities into this flow for analyzing business performance. BI vendors are also
! beginning to tap into the business event flows so that their products can be used to
manage and optimize day-to-day front-office and back-office operations. It is
important, therefore, that the performance management solutions offered by
application integration and BI vendors work cohesively together.

+
" Desktop, mobile, and wireless devices

!
portal other content
content store Enterprise portal suite stores

Content management
Collaboration suite
suite

Composite business processes

Business transaction processes and applications Business intelligence processes and applications

Business process management suite BI development suite

(analysis, automation, integration, monitoring)
Planning, reporting, analysis, BI interactive
performance management, development
Application integration suite and predictive tools environment (IDE)

transaction integrated low-latency historical

data master data transaction data information

Data integration suite

Low-latency and master data Extract, transformation, and load Enterprise information
integration tools (ETL) tools integration (EII) tools

APPLICATION INTEGRATION
Application integration technology manages the interaction between business
transaction and BI applications that may reside within or outside of an organization.
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Many organizations, however, also use it to transfer data between applications. In the
data warehousing world, for example, many extract tools (sometimes called ETL
tools) work with application integration software to capture data from an application
workflow, and transform and load it into a data warehouse. To highlight this trend,
many data warehouse vendors now market their ETL products as a part of a data
integration suite.

( Application integration vendors are either adding business process management

capabilities to their products, or are building connections to third-party process
& , management solutions. The dividing line between application integration and
business process integration is therefore fading. This trend will accelerate as the IT
industry moves toward a service-oriented architecture (SOA) that employs XML-
based Web services for managing business processes and their underlying business
transactions and BI applications.

( Before we move on to discuss data integration, it is important to highlight some key

& aspects of the discussion so far. The first thing to note is that user interaction,
business process, and application integration are being used not only for business
! ! transaction processing, but also for business intelligence and business collaboration.
Another is that the three types of integration can interact with each other, and can be
used together. This is why the marketplace is moving toward user interaction,
business process, and application integration software being bundled into a single
application platform suite (APS) of products.

"# 1 & An example of an APS is SAP NetWeaver (see Figure 5). The SAP NetWeaver
- Enterprise Portal capability (SAP EP) provides single sign-on for users of desktop,
mobile, and wireless devices. The delivery of information can be tailored to users’
3"# 4 roles in the organization, and users can further personalize their individual portals to
suit their needs and preferences. SAP EP works in conjunction with the SAP
NetWeaver collaboration suite and a content management suite (known as SAP
Knowledge Management). The collaboration suite includes shared e-mails,
calendars, and threaded discussions, and has a shared document store. The
knowledge management suite provides search tools, taxonomy development, content
management, publishing, and workflow management.

SAP NetWeaver process and application integration is provided by a business

process management capability, and an integration broker that includes facilities for
describing software components, interfaces, mappings and routing rules, and for
executing business processes. The integration broker supports Web services, and,
like other NetWeaver components, runs on an SAP-supplied J2EE-compliant Web
server.

"# 5 ! The combined facilities of the business process management capability and
. , integration broker form what is known as the SAP Exchange Infrastructure (SAP
& ! XI). Adapters in the SAP XI, for example, allow the integration broker to
, communicate with databases, files, and messaging providers. Other adapters link the
integration broker to SAP and third party systems, such as Baan, Oracle, and
PeopleSoft, as well as to legacy systems, and thus enable integration at the
application level. SAP XI can be used to acquire real-time events for constructing a
low-latency data store in SAP’s data warehousing environment, SAP Business

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Information Warehouse (SAP BW), which is included with the SAP Business
Intelligence component of SAP NetWeaver.

SAP NetWeaver life-cycle management provides tools for developing, testing, and
deploying Web applications through the entire software life cycle. The composite
application framework of SAP NetWeaver includes the tools, methodology, rules,
and patterns that allow SAP and its partners to develop SAP composite applications
(SAP calls these xApps).

6
"# 1 &
People integration
Multi-channel access

Composite application framework Portal Collaboration

Information integration

Life cycle management

Knowledgement
Business intelligence
management
Master data management

Process integration
Business process
Integration broker
management

Application server
J2EE ABAP

DBMS and OS abstraction

DATA INTEGRATION
Data integration technology has two primary objectives. The first is to provide
business processes and underlying applications with a single integrated view of
business information. The second is to provide facilities for copying and moving data
between different systems.

Several different technologies can be used for data integration, including low-latency
and master data integration tools, ETL tools, and more recently, enterprise
information integration (EII) software. The technology used depends on several
factors such as the type of processing, the data volumes involved, data currency
requirements, and the amount of data transformation needed.

7 Data integration suites of ETL, low-latency, and master data integration tools
dominate the BI marketplace for copying and moving data between systems, and are
used specifically to extract and transform transaction data for loading into a data

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warehouse. EII solutions, on the other hand, are beginning to gain attention as a way
of providing a single view of dispersed business information without having to copy
data. As discussed earlier, there is an increasing need in organizations for solutions
that can exploit BI processing for right-time decision making. Operational BI
processing enables an organization to be more responsive. This may involve the
querying and analysis of current or low-latency transaction data, BI-driven alerts and
automated action taking.

$ From a data perspective, operational BI processing may be performed directly

! against transaction data (using EII software, for example), or using a low-latency
data store (created using a data integration suite). Transaction data can be used
directly when data query and analysis volumes and complexity are low (to determine
) , the status of a customer order, for example). When significant data transformation
and analysis is required, and where some level of data latency can be tolerated, the
use of a low-latency store is a better approach.

In SAP NetWeaver (see Figure 5), data integration is provided by a data integration
suite that is a component of SAP Business Intelligence (SAP BI). This data
integration suite supports both SAP and non-SAP data in addition to standard file
formats such as XML. As mentioned earlier, low-latency data can be acquired using
the services of SAP XI. The SAP Master Data Management (SAP MDM) facility of
SAP NetWeaver extends the capabilities of the data integration suite by providing a
facility for consolidating, storing, and augmenting master data such as customer
information.

"# SAP BI also provides a set of BI tools for reporting and analysis. The suite includes a
) user-friendly Web-based interface with a zero-footprint HTML client. It provides a
& variety of data analysis capabilities, including advanced statistical and mathematical
& functions. It also offers users the ability to leverage the familiar Microsoft Excel
interface for all reporting and analysis needs. SAP BI can schedule reports and alerts,
& and can deliver the results in a variety of formats including HTML and Microsoft
Excel. It can also deliver reports to wireless devices.

SAP BI leverages the best practices of its customers by providing prepackaged

business content tailored for different user roles in different vertical industries. This
content, which includes report templates, metrics, and reports, accelerates
deployment while providing valuable expertise. The SAP strategic business planning
and simulation capability extends the BI environment by adding a strategic
performance management capability to SAP NetWeaver.

"# SAP BI is tightly integrated with other SAP NetWeaver components, including the
SAP Enterprise Portal, and the collaboration and content management suites. The
"# 1 & open framework of SAP NetWeaver enables third-party and in-house-developed BI
solutions to be incorporated into a SAP environment to supplement the facilities
provided by SAP Business Intelligence. More information on SAP NetWeaver and
SAP business intelligence can be found in the document Extending Business
Intelligence with SAP NetWeaver, which can be downloaded from the SAP Web site.

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CHOOSING THE RIGHT INTEGRATION SOLUTION

The integrated framework shown in Figure 4 should provide business users with a
seamless environment that gives them easy, but secure, access to the business
processes, business information, and collaboration tools they need to do their jobs.
Furthermore, the framework should make it easy for IT staff to evolve with new
developments in information and collaboration technologies, and allow them to
install products without the need for significant integration work.

( & An integrated business process, business information, and collaboration framework

! can be built using best of breed-of-breed tools, using suites of products purchased
from multiple vendors, or using an integrated platform supplied by a single vendor.
& Whereas purchasing best-of-breed products may, in theory, provide the best
functionality, experience shows that often this functionality cannot be fully realized
because products cannot be seamlessly integrated. Integrating best-of-breed products
is complex and resource intensive. This complexity leads to project delays and
frustration by business users because products do not work well with each other.

The most effective solution for the rapid deployment of a smart business is to buy an
integrated platform from a single vendor, and integrate any missing features using
best-of-breed products. This enables projects to be deployed faster, and provides
better functionality and usability for business users. The single platform approach
also usually results in a lower total cost of ownership.

As business transaction, BI and collaboration processing become increasingly

interconnected, a tightly integrated environment will make it easier for business
users to access and manage the many business processes they are involved with in
their day-to-day jobs. SAP’s NetWeaver solution is an example of a product that
provides such an environment. The next section of this paper discusses how Rohm
and Hass Company uses SAP NetWeaver to deploy smart and timely decision-
making.

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CUSTOMER CASE STUDY: ROHM AND HAAS COMPANY

$ Rohm and Haas, one of the world’s largest manufacturers of specialty chemicals,
makes products that enhance the performance of paints and coatings, electronic
devices, adhesives, and more. This $6 billion company – headquartered in
Philadelphia, PA – employs more than 17,000 people, and operates 140 research and
manufacturing locations in 26 countries. To optimize business processes, enhance
information management, support company wide collaboration, and provide business
intelligence, Rohm and Haas employs SAP NetWeaver and a variety of solutions
from the mySAP Business Suite family of solutions.

Rohm and Haas identified five drivers for adopting SAP NetWeaver: provide more
efficiency in maintaining and accessing corporate content; enable more flexibility to
collaborate internally and externally; lower the barriers for access to select
application functionality, create easier interaction with the company’s password and
security system, and provide a complete picture of the business environment to unify
delivery of internal business data and external market data.

“We wanted to empower our employees with more information, and gain visibility
across all the business units,” explains Eric Soll, e-business technology manager at
Rohm and Haas. “People should be able to think around a business process. Now,
our people can see internal and external information, both structured and
unstructured, all in one place.”

THE ENTERPRISE PORTAL

8 Rohm and Haas decided to use the SAP NetWeaver Enterprise Portal (SAP EP) to
! build a corporate portal. “The portal gives us knowledge management, market
! awareness with news feeds, business information and business intelligence, and the
ability to operate corporate systems, even if they’re not SAP systems,” says Soll.
“Bringing these processes and information together in a single view has tremendous
value. Users no longer need to be concerned about where information is, or what
application is used, because the portal puts a front end on it. Before, users had to
remember passwords for each system they accessed. That’s been eliminated with
single sign-on, and has made accessing information a lot simpler.”

KNOWLEDGE AND INFORMATION MANAGEMENT

! As a matter of course, a company accumulates a significant amount of valuable
knowledge and information. But information is easily lost, and knowledge is often
! ! scattered throughout the enterprise without an efficient way to harness it. Rohm and
& Hass use SAP NetWeaver knowledge management capabilities to create a structured
environment where people can manage this content. As a result, the company has
reduced e-mail traffic, and can now manage information without it being lost or
buried within individual repositories. They are also bringing external information

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into the portal via highly filtered news feeds from about 8,000 sources about
competitors, customers, and selected market segments.

EMPLOYEE AND MANAGER INFORMATION SELF-SERVICE

( Managers and employees use the portal in conjunction with mySAP Human
Resources (mySAP HR) for HR self-service. This solution not only provides
9 facilities such as compensation planning and employee information lookup, but also
supplies the manuals and information that managers need to do performance reviews
and other employee-related tasks. The portal has also eliminated many manual HR
processes. Before the portal, a salary planning manager had no direct access to HR
information. If a manager wanted to review an employee’s salary history, he or she
had to request the records from an HR administrator. Now, managers can look up
records themselves using the portal.

COLLABORATION
" The key to good collaboration is the ability to work effectively beyond the walls of a
! department or business unit. Rohm and Haas understood this requirement, and
! ! decided to use SAP NetWeaver as a tool to support collaborative efforts across the
enterprise. They are working to create a presence in the portal that maintains the
knowledge base for a group, regardless of their location or organizational
boundaries. Collaborative tools such as polls and discussion groups can be added to
the portal to build a more dynamic community. External information and business
intelligence can be integrated as well to bring all of the resources needed by the
group together in one place.

BUSINESS INTELLIGENCE
# & Providing managers with a consistent view of business operations was a challenge at
Rohm and Hass because of the global scope of the business, and the fact that there
& ! are many different ordering and purchasing systems with different definitions of key
business terms. Managers therefore had little confidence in the reliability of the data
behind their reports. To solve this problem, Rohm and Hass employed the
information integration facilities provided by the SAP Business Intelligence (SAP
BI) component of SAP NetWeaver.

Business transaction source systems feed an SAP BI 700 gigabyte data warehouse
that supplies information to a fast-growing base of 2,000 users. The SAP BI solution
consists of an initial staging area, about 30 operational data stores, the data
warehouse, and about 60 subject-area data marts. Major applications include order
processing, manufacturing, inventory management, supply demand planning,
procurement, and finance. Users range from business analysts to senior managers in
each area.

The portal is tightly integrated with the data warehouse and with business transaction
systems. The portal’s universal interface allows users to run everything from
corporate performance monitoring to advanced drilldowns and business-planning and

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simulation tools. Not only does the portal let users gain insight into the business
using the data warehouse right alongside operational reports, but it also gives them
access to related emails and other unstructured content.

8 ! On a broad scale, the portal and BI environment gives users a single source of the
! truth, which encourages business analysts and managers to use business intelligence
& - with confidence, and helps them make better and faster decisions. Specifically, they
are better able to manage the very complex supply chain, and are better able to
respond to customers on a global level. Managers, for example, are now able for the
first time to see the direct relationships between pricing and profitability.

FUTURE DIRECTIONS
Eric Soll believes there are other areas where an integrated business information and
collaboration environment can improve efficiency, for example, high-level metrics
and balanced scorecards, self-service budget and requisition processes, and order-to-
cash and purchase-to-pay processes.

: & The company has seen a shift in thinking as it integrates people, processes, and
); ): information. “I see a developing trend,” says Soll, “in moving away from an IT-
& system focus toward a business-process focus, facilitated through the portal. Right
(, now, people are increasingly interested, and I think the key is to keep going with
! , what we’ve done. We have more than 7,000 users today, with more to come. If
you’re enabling people and making their jobs easier, that really makes adoption a lot
easier. You really don’t have to sell it.”

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About BI Research
BI Research is a research and consulting company whose goal is to help companies
understand and exploit new developments in business intelligence and business
integration. When combined, business intelligence and business integration enable
an organization to become a smart business.

BI Research
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Ashland, OR 97520
Telephone: (541)-552-9126
Internet URL: www.bi-research.com
E-mail: [email protected]

Building the Smart Business:

Connecting People, Processes, and Information
Version 1, May 2004
Copyright © 2004 by BI Research
All rights reserved