With their many technology applications, in stores and at headquarters and warehouses, retailers have long faced the challenge of making all of these applications work together.
A POS terminal is of little value if it can't be linked to a wide array of other applications and tools, ranging from product replenishment to labor scheduling. A labor scheduling system needs to be connected to a human resources system, which needs to be tied to a time-and-attendance system.
The process of linking these business applications — known as systems integration — has tended to involve hardwiring them together, application to application, in a sometimes expensive and customized arrangement. However, with the development of the Internet and data communications standards, a new strategy has emerged to make this process more flexible and cost-effective. The strategy is to assemble applications into what is called a service-oriented architecture (SOA), which has become one of the most widely discussed topics in IT circles throughout the business world.
Although it's a relatively recent development, SOA could have a big impact on retailers' use of IT, getting systems to interact with each other in unprecedented ways while making it easier to make changes and improvements. With SOA, retailers are not only integrating applications but realigning them to support new business processes.
Food retailers have started to explore SOA. In January, IBM, Armonk, N.Y., announced that Kroger would deploy IBM's Store Integration Framework (SIF), which uses SOA to integrate in-store applications, systems and devices. “With this initiative, we will be able to introduce innovative services quickly and seamlessly to improve our customers' shopping experience,” said Chris Hjelm, senior vice president and chief information officer for Cincinnati-based Kroger, in a statement.
Other retail technology vendors have also been packaging their systems around SOA. For example, Lawson Software, St. Paul, Minn., now markets its applications bundled with IBM's WebSphere application server and WebSphere enterprise service bus, and also offers other supporting technology. Fujitsu Transaction Systems, Frisco, Texas, is offering its Pervasive Retailing Framework as part of its GlobalStore POS application, which is being made available to North American food retailers.
On May 1, the National Retail Federation's Association for Retail Technology Standards (ARTS) launched the SOA Blueprint for Retail project to provide retail businesses with specific guidelines and best practices for implementing SOA. A number of retailers are participating in the project, including Big Lots, Kohl's and CSK Auto. The Blueprint is expected to be ready by January. “The SOA Blueprint project is an important step toward breaking down barriers to adoption and providing retailers with the education and guidance they need to get started,” said Richard Mader, executive director of Washington-based ARTS, in a statement.
Earlier this month, at the Food Marketing Institute Show plus Marketechnics in Chicago, David Williams, lead solutions architect, Giant Eagle, Pittsburgh, gave one of the first industry presentations on SOA in a session called “Is a Service-Oriented Architecture Right for You?” The chain supports 144 corporate stores, 72 independents and more than 100 convenience stores.
So far, Giant Eagle has applied SOA based on Fusion middleware acquired from Oracle, Redwood Shores, Calif., in a number of integration projects. One is integrating its BlueCube Workforce Manager system, which does labor scheduling, with other internal systems, such as its PeopleSoft human resources application and its data warehouse.
Another integration project is to integrate the GOLD supply chain management software, from Aldata, with other internal applications.
The first project is completed, while the second is in its early stages.
Giant Eagle is also rolling out IBM's SIF to its GetGo fuel sites. This will provide flexible integration at the fuel pumps, allowing each pump to be a “virtual point-of-sale device,” according to an IBM statement.
Under SOA, integrated applications are able to talk to each other in a way that is “decoupled,” said Williams. This means that, unlike hardwired applications, “you can change one application without impacting the other,” he said. Moreover, each application is integrated not just to one other application, but, potentially, to every other application in the enterprise, because they all share a common “canonical” language.
The piece of technology that facilitates the integration is called the Enterprise Service Bus (ESB), which allows disparate applications to “plug in” to the SOA. Giant Eagle's ESB is from Oracle. SOA also employs a standard method of transferring data and functionality over the enterprise, called “Web services.”
In the case of the BlueCube Workforce Manager, Giant Eagle has implemented 10 separate integration processes. One example involves the hiring of a new employee. Under the SOA integration of BlueCube and PeopleSoft, data entered about a new employee in PeopleSoft moves more easily into the BlueCube labor scheduling system.
SETTING UP WORKFLOW
The integration of applications such as labor scheduling and HR in a more flexible fashion is one advantage of SOA. But SOA allows retailers to do much more, aligning applications in order to support particular business processes.
For example, Giant Eagle is in the process of using SOA to set up document management workflow. “So you would submit a document, and it would have to go through an approval cycle that would involve various levels of approval, depending on the business governance rules,” said Williams.
The document management process uses functionality from a task management application and a content management application, both purchased from Oracle. But the key piece of SOA technology underlying the process is called BPEL PM (Business Process Execution Language Process Manager), also from Oracle.
The BPEL PM allows Giant Eagle to “orchestrate” different functions — which are called “services” — into a business process, in this case document management. “The BPEL process assigns tasks to individuals to do the approvals,” said Williams.
One of the key advantages to setting up a business process like document management in this way — as a sequence of reusable services rather than as a traditional application — is that it can be more easily changed. “If we want to change how the approval process works, add steps or people, or change requirements, it can be done easily by changing a couple of business rules or by rewiring how services connect together,” said Williams. “The whole concept behind SOA is to be prepared for change.”
Services can also be reused in an entirely different context. “If a grocer decides to sell via a new channel (perhaps over the Internet), many of their existing services could be reused in a new business process that supports the additional selling channel,” said David Dorf, director of technology strategy, Oracle Retail, in an email communication.
“Grocers that employ SOA gain a competitive advantage because they are more readily able to capitalize on emerging opportunities through the flexibility that SOA provides,” Dorf added.
What gives SOA its flexibility is that it is built around “abstract” services based on business concepts, not the specifics of software. “When you're implementing a service, you just want to think about, what am I providing, or what do I need to receive?” said Williams. Implementation details are kept hidden and are considered interchangeable.
Another reason for SOA's flexibility is that it is based on open standards, which allow multiple vendor products and platforms to work together seamlessly. “That's the main reason SOA has become so widespread,” said Williams. “You can select a vendor for value, not platform.”
Williams acknowledged that Giant Eagle is in the beginning stages of SOA and hasn't gained benefits yet. The payback from SOA, he said, will come when the company can begin to reuse functionality and make changes easily. “It's hard to justify this in the short term, because this is something that's more difficult to do than a typical point-to-point integration,” he said. “But in the long term, it can save you countless hours and dollars when you can easily use functionality that's there instead of building it from scratch.”
For Williams, SOA represents a shift in paradigm toward which the industry is moving. “Now we're doing a lot of integration between systems. But in the future, you're going to start to move toward implementing functionality in smaller pieces. Instead of building or buying large applications, you can build or buy smaller pieces and plug them into the architecture to add new capability or create new processes.”
Giant Eagle plans to buttress its SOA implementation with a service directory and the ability to monitor and report on the strategy. It also plans to set up an Integration Competency Center “to support the care and feeding of SOA,” said Williams.
SOA CHALLENGES
Williams identified a number of challenges associated with SOA. For one thing, it requires organizations to settle on one definition for a business object, such as an invoice, that may have many definitions across the business. “It's hard to do technically, and may involve a lot of [internal discussion],” he said. He hasn't encountered this so far, but he expects to as Giant Eagle moves ahead with SOA.
While SOA is great for reuse and agility, it may sacrifice speed. In an SOA scenario, data is packaged with standard messaging elements like XML and SOAP, which “adds a lot more overhead to what you're doing,” said Williams. There are ways to address performance, such as using an XML accelerator or data compression.
Security is another major challenge. “You're publishing a piece of functionality that you expect multiple end points to use, so you have to be able to deal with that in a secure way,” Williams said. In the case of employee changes, for example, there need to be mechanisms in place to authenticate who's going to be using it.
Governance can also be tricky. Since SOA links distributed systems and agencies, “you have different points of control,” noted Williams. “You're trying to get them all to work together.”
Companies considering SOA should think about security and governance early on, Williams said.
But the biggest obstacle to SOA is what typically hampers any significant technology change: cultural resistance. “I've encountered that even in our relatively small implementation,” said Williams. “People say they know how to push data from this point to this point. They ask, ‘Why do I want to jump through all these hoops you're asking me to jump through?’”
Overall, Williams believes the benefits of SOA make it difficult to ignore. However, he cautioned, “if not properly planned, it can result in a mess more complex than what is already in place.”
SOA Glossary
Service-oriented architecture is a topic replete with acronyms, abbreviations and terms with which non-technical people may well be unfamiliar. The following is a short glossary of the main terminology, drawn from a variety of industry sources. More detailed information is available on the Internet at www.service-architecture.com.
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Service-Oriented Architecture: a style of integrating distributed systems that deliver functionality as loosely coupled “services.” Based on open standards, SOA itself is not a standard, a specification or a product — it is a framework for designing an IT infrastructure.
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Service: a discrete function that can be offered to a user. A service may consist of an individual business function, or a collection of functions that together form a process. An example of a service might be, “verify this customer's credit history.”
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Web Services: a technology-neutral collection of Internet-based standards, including XML, SOAP and WSDL, used for transferring data and functionality.
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XML (eXtensible Markup Language): a data-tagging language for enabling the transmission of data.
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SOAP (Simple Object Access Protocol): an XML-based messaging protocol — in effect, the envelope — used to encode information sent over a network.
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WSDL (Web Services Description Language): an XML-based language used to describe the services a business offers and to provide a way for individuals to access those services.
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BPEL (Business Process Execution Language): an XML-based language used to define a business process and how the process is going to be executed.
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Enterprise Service Bus: an integration backbone for connecting applications and other services.
— M.G.