FEATURES Fall 2018

ADNAN A. BUKHARI,
FIRST AMERICAN FINANCIAL SYSTEMS

We are living in unprecedented times. The technological advances that we have seen in the last 20 years are unique and exceptional.

FEATURES Fall 2018

ADNAN A. BUKHARI,
FIRST AMERICAN FINANCIAL SYSTEMS

We are living in unprecedented times. The technological advances that we have seen in the last 20 years are unique and exceptional.

ADNAN A. BUKHARI,
FIRST AMERICAN FINANCIAL SYSTEMS

We are living in unprecedented times. The technological advances that we have seen in the last 20 years are unique and exceptional.

Mobile, internet of things (IoT) and cloud computing are transforming the way we do business, and so the role of information technology is also changing. This change is also impacting on enterprise resource planning (ERP) implementations. Traditionally the ERP is monolithic, providing all the business functions in a packaged software. Although there are many benefits of the packaged ERP solution, it lacks the agility today’s business demands.

Cloud computing is one of the greatest disruptors for traditional ERP. The business wants agility and flexibility and, therefore, Software as a Service (SaaS)-based applications. The vast adoption of these SaaS solutions is creating new challenges of security, interoperability and adaptability in ERP implementations.

For the last several years, service oriented architecture (SOA) has been adopted by many organizations as an IT strategy to combat the challenges of enterprise application integration. SOA principles are proven and provide the strong foundation necessary to resolve the challenges of modern IT in cloud-based ERP implementations.

This article provides an overview of the integration challenges in distributed ERP implementations and examines how SOA principles are used at First American Title Insurance Company for postmodern ERP implementation.

Postmodern ERP

ERP applications have been in the market for the last few decades and have evolved significantly since their inception. There are three main waves or eras that ERP systems have gone through:

  • Classic – 1980s to early 1990s.
  • Modern – mid 1990s to mid 2000s.
  • Postmodern – late 2000s to today.

Initial ERP applications were driven by market and user immaturity. We saw ERP as a set of “best-of-breed” applications providing users the ability to solve business problems. Although users were happy, integration of those applications was challenging, and proper reporting was a nightmare.

At the end of the last century, due to the vast adoption of internet technologies that were based on open and interoperable standards, the IT function became centralized in its control. We saw mega suites of ERP systems driven by vendors. Users matured but were frustrated because of long implementation cycles and lack of agility.

In postmodern ERP, the mega suites are deconstructed, and mega vendors are not in control any more. Cloud computing has made it possible for users to choose the best-of-breed SaaS based applications. This deconstruction of ERP systems and SaaS-based cloud applications created new integration and implementation challenges for IT.

Gartner defines postmodern ERP as:

“…a more federated, loosely coupled ERP environment with much of the functionality sourced as cloud services or via business process outsourcers.” 1

Postmodern ERP Integration Challenges

Data and Process Integrity
Adopting distributed business applications means that we cannot rely on the inherent integration available in traditional ERP packaged applications. The data residing in different applications can easily get out of sync and can create significant issues, resulting in delay in completing core business functions. Simply interfacing applications will not result in the same level of data and process integrity that ERP suites have historically delivered.

Implementation Methodology
The market is changing rapidly in terms of business applications available, deployment options and application integration products. Managing this complex and changing environment requires a strategic approach to acquiring, managing and maintaining business applications and their integration.

Service Oriented Architecture (SOA)

SOA has a different meaning to different stake holders.

  • CIO: Path to reduce cost and maximize ROI.
  • Business executives: Quick response to changing business needs and market conditions.
  • Business analyst: Well-defined business processes to serve business needs.
  • Enterprise architects: Reduced IT complexity and rigidity and increased agility.
  • IT architects: Promote loose coupling and reuse.
  • Developers: A development paradigm using Web Services without intimate knowledge of other IT systems.

Although it is hard to define SOA, the following definition of SOA was produced by the SOA Definition team of The Open Group SOA Working Group.:

“Service-Oriented Architecture (SOA is an architectural style that supports service-orientation. Service-orientation is a way of thinking in terms of services and service-based development and the outcomes of services.” 2

SOA Principles

SOA provides us a framework and a set of principles. By following these principles, one can combat the challenges of postmodern ERP. 4

Explicit Boundaries
A service exposes its functionality through an explicit interface that encapsulates its internals. All access to the service should be via its publicly exposed interface.

Figure 1: High-level overview of First American Financial Systems technical architecture.

Policy-driven
All non-functional capabilities and needs of a service are specified using policies.

Autonomous / Loosely Coupled
Services can be changed and deployed, versioned and managed independently.

Standards-compliant
Reliance on standards instead of proprietary APIs and formats.

Metadata-driven
Enables discovery and retrieval of artifacts both at design
and runtime.

SOA and Integration Capabilities

SOA principles has been proven to increase the Integration capabilities of an enterprise. Mostly, enterprises start at a “NOVICE” level where most of the integrations are “point to point” and without any integration strategy. At this level, the integration development is costly and time consuming.

By adopting SOA principles, tools and technologies, the enterprise can reach to the “PRACTIONER” level with systematic integration capabilities. At this level, an enterprise has an emerging role of Integration Competency Center (ICC).

By maturing the ICC and leveraging technologies, an enterprise can reach a “MASTER” level with Systematic and Adaptive Integration Functionality.

First American Financial Systems – Technical Architecture

The following architecture diagram (Figure 1) provides a high-level overview of First American Financial Systems technical architecture.

The diagram in Figure 1 shows that there are different types of consumers to support. On the top left we have IE and Java for Oracle EBS core ERP users. There are also many interface partners connecting to core system using services or interfacing using files.

On the Applications / Integration layer, there is Oracle EBS core ERP Financial System and Oracle Business Intelligence Enterprise Edition for reporting. On the right most is Oracle SOA Suite 12c with Oracle Managed File Transfer as the Integration Middleware platform. All the files-based interfaces use MFT and all services are exposed through Oracle Service Bus OSB for .Net and Java based consumers.

On the database layer, separate database instances are for Oracle EBS and other applications including SOA middleware.

Figure 2: Gartner hype cycle for emerging technologies as of August 2016.

First American Financial Systems – Cloud Adoption

In the past few years, cloud-based SaaS solutions are increasing and getting popularity. Figure 2 is the Gartner hype cycle for emerging technologies as of August 2016.3

As you can see in Figure 2, cloud computing is considered in the Slope of Enlightenment, which indicates that:

  • Cloud technology is now widely understood, and enterprises know how to use it.
  • Second- and third-generation products are in the market.
  • More enterprise funds are allocated for this cloud.

First American adopted a few SaaS-based financial applications in the past few years. We currently have some key systems in the cloud utilizing a SaaS model. Oracle SOA Suite with Managed File Transfer is providing all the necessary capabilities to integrate these applications on real time or batch mode (See Figure 3).

By adopting SOA principles and using required tools, First American is handling the integration challenges of postmodern ERP.

Data and Process Integrity
Having a flexible architecture with the proper tool set, scalable and robust integrations are developed with business process outsource and SaaS vendors. The SOA principles help in streamlining the business process across the different applications. By validating the data before inserting in a real-time manner, data integrity issues can be avoided, hence avoiding production support and data fix issues.

Implementation Methodology
By adopting SOA as a methodology to implement IT projects, the challenges around most implementations can be avoided. By keeping the systems boundaries and implanting reusable services on top of applications, the implementation time can be reduced, and deployed options can be increased.

Figure 3: High-level integration view of SaaS applications at First American.

Conclusion

It is essential to understand the complex interdependencies of postmodern ERP scenarios. The postmodern ERP implementation using SaaS applications may result in integration challenges. These challenges can be avoided by adopting an integration strategy based on SOA principles. Using the right integration tools and the development of reusable components can reduce the overall cost of implementing SaaS-based solutions.

Reference:

  1. Gartner Says by 2016, the Impact of Cloud and Emergence of ­Postmodern ERP Will Relegate Highly Customized ERP Systems to ‘Legacy’ Status,” January 2014, Gartner
  2. Service-Oriented Architecture – What Is SOA?,” The Open Group
  3. Gartner Hype Cycles 2016: Major Trends and Emerging ­Technologies,” from the webinar by Betsy Burton, VP Distinguished Analyst, and Mike Walker ­Research Director
  4. 10 Principles of SOA,” Stefan Tilkov, InfoQ, February 2007
  5. Adopt a Strategic Approach to Application Integration for Postmodern ERP and Business Applications,” Mike Guay, Jess Thompson Jess, Christian Hestermann, Gartner, July 2015

Adnan Bukhari is a multifaceted technology leader with a unique blend of business and technical acumen. As a sr. solutions architect in his current job, the solutions he provides to integrate First American’s enterprise systems result in streamlining order to cash and procure to pay business processes. His comprehensive experience spans cloud computing, enterprise architecture, systems integration, business continuity and strategy.