What is a « Service Oriented Architecture – SOA » from a business perspective?
| A business’s IT organization is critical to enabling the business to respond to challenges, such as competitive pricing, offshore suppliers, and other issues that arise in today’s rapidly changing global marketplace |  |
Globalization
Business must be agile to survive globalization. When competitors can make the same product for less, a business needs to respond creatively—and quickly. IT is rarely given the opportunity to influence expectations and alternatives.
Economic Pressures
Even though corporations have recorded cash reserves in the last years, market growth remains difficult and challenging. Companies are trying to achieve growth through mergers and acquisitions. These put additional pressure on both business and IT organizations to consolidate and simplify disparate people, processes, and systems. With growth slowing, businesses have concentrated on cost-cutting. IT has responded to budget cuts by outsourcing non-core functionality and adopting the offshore development model. While not ideal, this enables IT to free up some of its limited budget for development of new business support capabilities.
Business Process Outsourcing
This trend is expected to grow exponentially over the next few years. Outsourcing enables enterprises to focus on their core businesses and outsource non-differentiating services such as Human Resources, Call Centers, and Data Center Management. However, IT must then rise to the challenge of integrating third-party business processes and data back into the core business, thus influencing dramatically the IT infrastructure.
Regulatory Compliance
Enterprises have to comply with government regulations to stay in business. Some recent regulations, notably Sarbanes-Oxley in USA or “Loi sur la Sécurité Financière” in France, required IT organizations to review and in some cases retrofit all business systems. This diverted scarce IT resources and funding away from development of new business capabilities. Future regulatory changes could require further changes.
Technology
New technologies have the potential to create new business capabilities. But seizing new opportunities can also create new challenges, especially for IT, which usually has to figure out how a business will sell, supply, and bill for a new product or service. With resources scarce, IT must make tough choices between maintaining and upgrading existing IT systems and investing in new systems and architecture to create new business opportunity.
Lack of Cohesive Business Information Strategy
In most cases, business decision makers do not clearly understand the benefits of shared infrastructure and business logic. They focus on their immediate need, and IT responds, often developing multiple systems with almost identical functionality but conflicting algorithms that complicate any attempts at integration and consolidation. Many companies have multiple, incompatible solutions for authentication, single sign-on, and data marts, as well as multiple applications (packaged and custom) for sales force automation (SFA), quoting, and order management. Corporate structures, too, often provide little incentive for sharing and cross team collaboration. This can lead to a project focus in IT, rather than a coherent business information strategy and business-based IT infrastructures.
Standards
At last count there were more than 56 standards bodies addressing various aspects of SOA. Their efforts are not coordinated, so the result is almost the same as having no standards at all. It’s up to individual IT groups to decide which “standards” to follow.
Therefore, Business would like IT organizations to be more agile, but don’t want to pay more. IT organizations need resources in order to keep legacy applications running well, develop more agile and productive infrastructure, and add needed business capabilities. Traditional governance, organization, and project management models cannot resolve this conflict.
The only way to meeting these ongoing business challenges is joint business and IT transformation.
Most business and IT executives agree on one fundamental business principle: their business processes differentiate them from their competition. For some, it may be the way they handle their supply chain; for others, it may be their ability to bring new, innovative products to market. Focusing on the business processes is important for enterprises to mature to a more flexible goal-oriented model.
However, business and IT operations teams frequently differ in their approaches. For example, some business operations teams prefer to demonstrate “quick wins” to validate an approach, while IT operations prefer to build out the infrastructure.
Fortunately, SOA offers both!
