SOA/Web Services

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November 30, 2006

Muzeview and The SOA Monitor: SOA Delivers Real Business Benefits

By Mae Kowalke, TMCnet Associate Editor

A new study out this week from Muzeview and The SOA Monitor indicates that service oriented architecture (SOA) is having a positive, measurable effect on business practices.
An executive summary of the study, “Business Guide to the Impact of SOA,” indicates that SOA can be beneficial in a variety of locations including call centers and back offices by helping to increase revenues, reduce logistics costs, retain customers, and speed up time-to-market for new applications.
That sounds good, but what exactly is SOA?
Here is the definition offered by Muzeview and SOA Monitor: “an architectural approach to designing, building and deploying IT systems that delivers IT flexibility, accelerates IT development and lowers IT development and maintenance costs.”
The report adds: “But much more than this SOA is delivering business capabilities that result in significant financial and business benefits far beyond the IT organization.”
Muzeview and SOA Monitor reported six key findings related to SOA. These are summarized below.
1. SOA adoption is a response to both business and IT forces
Companies that choose to adopt SOA do so because they face certain, critical challenges: market intensity, customer and service complexity, external integration intensity, technology intensity, and IT stress.
“In the light of these challenges it is perhaps not surprising that financial services organizations have by far the largest industry sector representation in the SOA research group,” the report noted.
2. SOA directly addresses business imperatives and objectives
Companies choosing to adopt SOA do so in order to address critical business goals, such as: offering new or improved services; improving the experiences of customers, partners, and employees; increasing speed; and improving quality.
“The results of implementing and capitalizing on SOA are real and significant business and financial benefits,” the report reiterated.
3. SOA can deliver capabilities in all areas of the organization
As mentioned earlier, the benefits of SOA go far beyond the IT department. In fact, SOAs can impact the operations of companies including new and improved products/services, customer facing processes, supply chain and business partnering, and internal operations.
“A common example of SOA-enabled capability was the provision of self-service capabilities for customers, partners and employees with 41 percent of organizations reporting some form of self-service capability,” the report notes.
4. SOA delivers IT benefits
Of course, SOA also has beneficial effects on the IT departments of companies. IT departments are using SOA to enable faster and higher quality application development, to lower the total cost of ownership, and lets IT departments reuse software while reducing complexity and redundancy while increasing flexibility.
“While the focus of this report is on the business-level benefits of SOA, it should be appreciated that SOA is enabling the IT organization to deliver on its own imperatives,” the report adds.
5. SOA effects can be demonstrated using a drivers framework
This framework is shown in the chart below, which visually summarizes the effects SOA has on business practices and outcomes.
6. SOA delivers cumulative and long-term benefits
Individually, the benefits of SOA may seem interesting but not truly significant or compelling—because they are not unique to SOA. The true value lies in the ability of SOA to deliver economies of scale and to meet future needs.
“Using SOA to address a business need in one area of the business creates a platform that can deliver benefits quickly and easily to other areas of the business,” the report notes.
“For example by integrating separate product and service systems, financial services businesses have been able to improve the ability of sales and service professionals to serve customers,” the report adds. “They have then harnessed this capability to implement self-service capabilities for customers.”
The truly compelling thing about SOA, then, is its ability to help companies evolve and adapt quickly to market changes.
Getting Started
So what should companies take away from all this?
“We believe SOA will soon become a business imperative for most organizations—and in fact in certain sectors such as financial services and telecom we would argue that it already has,” the report emphasizes. “Those companies that fail to embrace it will be swept away by faster and more flexible SOA-enabled competitors.”
Yet, the report does admit that adopting SOA is a daunting endeavor, described by some as “the equivalent of changing a jet engine midflight.”
The breadth and depth of SOA’s impact on a business may be profound, but nonetheless companies are “finding practical and successful ways to implement SOA often through simple and focused deployments that enable them to learn from the adoption of SOA principles.”
So, it appears that the lesson is to start with simple, focused initiatives and build upon that. Where to begin?
“In practical terms, SOA is about breaking down the IT capability into discrete pieces (“services”) that can be reused and combined in different ways to create new and enhanced capabilities and applications,” the report explains.
When examined, many of the processes and systems a business uses—such as looking up customer addresses, quoting prices, and updating inventories—turn out to share elements and rely on common data.
SOA is about recombining those elements which may have grown apart, thereby streamlining processes and systems. This is accomplished by breaking applications and systems down into “services” and then using standards and protocols to connect them.
This method results in the elimination of duplicate activities and data, the speeding up of processes, and the ability to create or adapt applications quickly and cheaply.
Now, that definitely sounds like it could have a positive impact on a business!
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Mae Kowalke previously wrote for Cleveland Magazine in Ohio and The Burlington Free Press in Vermont. To see more of her articles, please visit Mae Kowalke’s columnist page. Also check out her Wireless Mobility blog.

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