Traditional business and IT processes can be rigid and inflexible, even described as monolithic structures that are cast in stone. They are unable to quickly respond to changes in business and their lead times for amendment are too long.
The IT infrastructure of an entity can act as a drag on a company’s ability to change and grow in response to dynamic business conditions. This is where more flexible and agile business tools such as Service Oriented Architecture (SOA) can add enormous value.
But despite this value, companies driving investment in Service Orientation will encounter a crucial stumbling block when funding SOA initiatives in that ROI on initial projects may not be immediately evident or visible.
“Many organisations are faced with this dilemma,” says Michael Barnard, Senior Manager at PricewaterhouseCoopers South Africa Advisory Services. "But this only occurs when there is insufficient focus on the business process dimension of a holistic SOA.
"Unless the initial SOA project can be linked up to a specific process improvement within the value chain, it will be hard to justify the initial investment.”
The initial implementation of SOA for the first projects can be more expensive than the traditional approach. But as projects evolve, the cost/benefit breakeven is reached and the business returns are ever increasing. In a conventional approach there are incremental costs associated with each additional project, and returns can even be diminishing as one may have to revisit and modify existing processes to accommodate change.
Barnard advises that companies considering moving to SOA should beware of a radical once-off ‘big bang’ approach.
“Organisations should engage in service discovery workshops and decide how many and which services they want to start off with and can then add to this incrementally over time, building up a comprehensive library of services. The SOA-enabled organisation is built with what he terms ‘sliver projects’ to achieve incremental business returns, whilst at the same time building the SOA vision.
“In the legacy reactive style of business architecture, data was contained in silos or specific applications that cannot communicate with each other effectively. When change occurred, there would be a domino effect and many tightly woven, interconnected systems would need modification.
"In a SOA environment, business solutions are more loosely coupled with each other but are still highly interoperable. In our view, service orientation is a holistic approach to how the business functions, which includes both the business process world and the underlying infrastructure.”
It is this fluid process approach which will in the medium term yield hard business returns both in driving down maintenance costs and facilitating faster development of new products. Without the process approach the organisation is really just connecting applications – an infrastructural approach without visible ROI.
Barnard says that a SOA approach is invaluable in sectors such as financial services, particularly banking and insurance, which are process and human activity intensive. Its benefits would also be obvious in company mergers and it would be an ideal approach to implement in government departments to improve service levels.
He highlights that global consensus is that 2007 is the year when SOA will become mainstream and that inhibiting legacy software will be extended by developers focusing on software as a rapid facilitator of business change.