HP Merger IT SOA Success Story

1. HP Merger IT SOA Success Story Manoj Mansukhani Sr. Enterprise Architect ManojM@HP.Com HP Restricted

2. Agenda • Business challenges • HP IT SOA Solution • Approach and guiding principles • SOA Service spotlight • Financial Gateway • Results & challenges • Next steps HP Restricted

3. Business challenges

4. Top six HP post-merger challenges • Budget cuts were ‘de rigueur’. • Employees had to re-think the way they work. • HP/Compaq merger was a key impetus for change. • Rationalization, consolidation and integration were needed immediately! • More than one hundred storefronts existed. • Consolidation was mandatory. • Consolidation required simultaneous revision of front and back-end systems. • Tight coupling would cause repetitive reworking. • An eclectic collection of technologies existed. • Rationalization and integration were required. • Continue to meet business objectives • Systems had to remain operational during the change period. HP Restricted

5. The HP conundrum • Continue to do business and make changes • Operate HP and Compaq systems • Integrate the two sets of legacy system functionality • Consolidate storefronts, front and back-end systems • Provide regional customization without duplicate effort • And… • concurrently remove $1B of operating expense!! HP Restricted

6. Supply ChaineBusiness and Customer Operations HPIT organized by HP Operating Model Process Cluster A Process Cluster B Process Cluster C Process Cluster D Process Cluster F Process Cluster E Customer Segments Products and Services Business PCs & workstations Consumer No Touch Consumer pcs Portables and handhelds Monitors & options Low Touch Commercial printing SMB Personal printing Shared printing Configure-to-Order (CTO) Digital imaging Direct and Indirect Channels Printing supplies Business critical servers Public Sector High Value & Solutions Industry standard servers Network storage solutions Enterprise solutions Services Consulting & integration sol. Enterprise Managed services solutions Customer support solutions Global Operations and Information Technology HP Restricted

7. HP eBusiness ITSOA Solution

8. HPIT goals Innovation23% Innovation29% Innovation42% Maintenance30% Maintenance24% Maintenance15% Infrastructure47% Infrastructure43% Infrastructure47% FY07 FY04 FY03 • SOA will be a significant enabler in helping HP IT to • Cut maintenance spend by driving normalization • Boost Innovation spend by making it easier and quicker to create new solutions HP IT’s goals HP Restricted

9. Benefits of SOA • Compelling business benefits • Invest once, leverage many times in different contexts • Help eliminate duplicate functionality; Potentially huge cost savings • Time to market: Solutions can leverage existing re-usable services • Re-use of business processes, ensuring consistency • End solutions will be free to focus on providing a superior user experience HP Restricted

10. Initial eBusiness objectives • Find ways of doing business with reduced budget • Globally standardize eBusiness processes • Define architecture approach that enables • Simultaneous consolidation and evolution of customer-facing storefronts and back-end systems without repeated integration • Improved ability to adapt rapidly to changing business requirements • Increased centralized development, but allows regional customization and deployment • Use of multiple legacy technologies HP Restricted

11. eBusiness SOA approach: Guiding Principles that evolved for SOA • Start with bottom-up approach and evolve to top-down approach in second wave • Start with simple SOA model to build early success and then scale infrastructure • Shared services are provided by HP IT only • Heavy lifting to be done in shared services • Thin regional ownership • (i.e., storefront framework with regional responsibility for customization) • No charge-back for services consumed • Avoided analysis/paralysis by focusing on initial customer need, but ensured that architecture was flexible enough to extend for additional consumers • Only created services in response to specific customer demand • Build the service for a user, not a perceived need HP Restricted

12. Bottom-up: initially adopted Pick the “low hanging fruit” Choose services intuitively recognized as having quick return-on-investment Select services that can be shared across multiple initiatives Prefer services with well understood requirements Advantages of bottom-up Avoid the paralysis-of-analysis syndrome Provide examples of early success Makes selling ideas easier Evolutionary approach adopted Informal Governance initially Evolve and mature services as required Top-down: right for second wave Use time bought by bottom-up approach for parallel long-term improvement efforts Continue process standardization Refine services and initiatives selection criteria eBusiness SOA approach: Guiding principles — Deployment HP Restricted

13. eBusiness SOA approach: Common guiding principles for service selection • Service identification • Somewhere between an art and a science • Key to succeeding with an SOA • With too few coarse-grained services, each service might become overly complex and monolithic • Too many fine-grained services might introduce an unsustainable amount of communication and collaboration overhead • Service selection candidates ~ pick those where … • Business processes are common and used by many • Must have common processes for shared services • Expected return-to-complexity ratio is greatest • Targeted business process are: • Stable, transactional, relatively small information “payload” HP Restricted

14. Services value quadrant Business value Low High Payment Financial gateway Notification (e-mail/fax) Credit Fraud Low Currency Conversion Account Mgmt Auditing Order Status Disputes Non-Credit Card pmt Development difficulty Freight Availability HP E-Wallet Reporting Auctions Logon/Authentication Warranty Registration Data Center Device Mgmt E-Coupon Administration High Event Notification Pricing Content Management Order Processing Inter-Company Transactions Configuration Management HP Restricted

15. eBusiness SOA experience —Development • Implementing SOA • Facilitating web services development • Development frameworks were created to facilitate service development and consumption • Promote the use of design patterns and best practices in the creation of web services (logging, error-handling, metrics gathering) • Offer a foundation that codifies the use of best practices and serves as a better starting point • Tools developed to facilitate integration of service into application code • Code samples to call service provided • Test system available • Consulting provided by eBusiness to assist consumer development teams • Versioning quickly emerged as an important capability once the services were deployed to multiple consumers HP Restricted

16. Financial GatewayA services spotlight

17. Services Spotlight – Financial Gateway Service • Problem • Many storefronts with one-off custom code, contracts and processes for the same basic functions - payment processing and fraud • Solution • Payment Gateway Service / Risk Management Service – a suite of globally available financial services • Credit card authorization, payment and settlement in over 200 currencies • Storefront configurable fraud checking and address validation • Payment via leasing, PO and echeck • Restricted party validation (Are we allowed to sell to this party?) HP Restricted

18. The Financial Gateway A composite application utilizing PGS/RMS and other services Financial Gateway Tax Fraud Manager RMS FQM RPL PaymentGateway VCP Credit CYBS AFS CitiGlobal Payments Transaction Flow Leasing Delta Vista Settlement Services Aggregating all aspects of the financial lifecycle for process consistency and maximum efficiency HP Restricted

19. SOA Service spotlight: Financial Gateway 300,000 $60,000,000 250,000 $50,000,000 200,000 $40,000,000 150,000 $30,000,000 100,000 $20,000,000 50,000 $10,000,000 0 $0 Q4 2003 Q1 2004 Q2 2004 Q3 2004 Q4 2004 Q1 2005 Q2 2005 Transactions Revenue Transactions Revenue Handled HP Restricted

20. Business impact Transaction fee/discount rate decrease Standardization of financial systems and processes Decreased incidence of fraud Increase enablement of revenue HP Restricted

21. Results and Challenges

22. Implementing SOA into HP IT: it doesn’t happen overnight… Phase 1 Phase 2 Building the Adaptive Enterprise:The HP IT journey Adaptive (business services) Efficient (application services) Stable (infrastructure services) HP Restricted

23. Results realized using SOA • Reduced the cost of IT • Significant reduction in the cost of development by eliminating duplication • Enabled aggressive cost management system • Forced paradigm shift in business • Encourages the business to define and standardize their processes in a more modular way • Forces collaboration and consensus between business groups on what business processes are and how they should work • More consistent customer experience • Consistent business processes provide a more consistent experience across customer segments, product lines and geographies HP Restricted

24. Released more than 30 services — accessible via hp.com, marketing sites, e-commerce customer storefronts, Partner Portals, and Direct B2B connections Supported higher volume online interactions 1.2M+ logins per day 5M+ visitors per week $10B revenue handled per year Received SOA support from business, operations and IT sponsors SOA investments over past three years: 65% service production; 35% service consumption (portal and storefront user interfaces) Lowered cost to serve $16M annual asset retirement savings Reduced time to deliver Cut implementation time and cost by as much as 50% for consumers of shared services Quantitative results realized using SOA HP Restricted

25. Technical Performance and Availability Evolving standards and technologies Provisioning services on demand Infrastructure for testing Services Manageability & Governance Management Trust concerns Alignment with business sponsors (Long Term vs. Short Term) Management of change issues Meeting differing SLAs across multiple service consumers Service Selection (Complex ROI, Business case) Standardized Business processes across multiple LOB Web services lifecycle SOA Issues and Challenges HP Restricted

26. Next steps for eBusiness SOA • Increase Governance with broader adoption • Robust process required for analyzing priorities • Implement manageability to better address customer SLAs • SOA Manager deployment in progress • Provides Service SLA Management, Policy Based Security, Service Provisioning and Version Control • Implementing improved monitoring and manageability • Availability and performance are critical metrics • Work closely with consumers to manage capacity planning • Drive service maturity UP • Proactive testing • Abstract service as much as possible to reduce testing requirements • Continue business process to service mapping HP Restricted

27. HP SOA Maturity Evaluation Framework — Aspects of SOA enablement Business People Program Mgmt. Governance Architecture Enabling technologies Operations & Mgmt. Supply & Demand A framework for examining challenges/lessons learned • Business goals and strategy • Business metrics • Stakeholder participation • Business/IT Synchronization • Skills and expertise • Experience • Culture • Communication • Education • Program management • Project management • Transformation program • POC, pilot and roll-out • Assessment & measurement • IT Governance • Organization structure • Compliance management • Portfolio management • Service Infrastructure (ESB, Registry, Service hosts, Development Environment, etc…) • Legacy migration/integration • Technical infrastructure (Servers, Storage, Network, etc…) • Enterprise Architecture • Solution/Service Architecture • Principles, Standards and Models • Domain Architecture (Security, Management, Network, etc…) • IT services for business • Vendors and suppliers for IT • Sourcing strategies • Service level contracts, obligations and agreements • Day-to-day service operations • Management of SOA IT • Integrated management of business & IT HP Restricted

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