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Leveraging SOA for Business Value

This article appears in the issue January 2008, [Vol 17, Issue 1]
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The concept is straightforward—instead of rewriting code for processes that need to be performed by different applications throughout the enterprise, write the code once, make it easily accessible and let everyone use it. That is the fundamental premise of service-oriented architecture (SOA). A service might be as simple as looking up an employee’s name and address in an enterprise resource planning (ERP) application, or as complex as calculating total expenditures on a project and displaying it along with information from another application in a composite or "mashup" interface.

SOA offers benefits to users of a broad range of software applications. "For users of packaged ERP products such as SAP, which are typically manufacturing and retailing companies, SOA can provide a competitive advantage by allowing unique processes to be built on the platform," says Bill Swanton, VP of research at AMR Research. "In the case of custom software, such as that often developed by financial services companies, SOA is seen as a way of managing complexity and reducing development cycles."

Market forecast

IDC predicts that the total worldwide SOA market will grow from around $2 billion in 2006 to $14 billion by 2011. Those numbers include applications, development and systems infrastructure. The applications component of SOA is predicted to be the fastest growing portion, increasing from $400 million to $4 billion during that time period. However, SOA as a whole is growing off a small base, and would still account for only about 4 percent of the total software applications market by 2011.

SOA eases integration

KeyCorp, a Cleveland-based bank, made a decision to build out an SOA infrastructure and is now benefiting from reduced development time and costs for achieving new capabilities. The bank is using the webMethods (acquired by Software AG) Product Suite for loan processing, compliance and customer satisfaction initiatives. The suite pulls together customer information from many systems, including bank accounts, loans and brokerage accounts. Those are presented in one screen so the service representative can get a 360-degree view of the customer. The ability to extract information from its existing systems also allowed the bank to comply with Patriot Act requirements.

The comprehensive view enabled by SOA is very compatible with the aims and philosophy of knowledge management. "You are not just interested in how many products you sold," says John Fitzgerald, director of product marketing at webMethods, "but in seeing the whole KM ecosystem."

Technology boost

Fitzgerald adds, "A mashup can deliver to the user a combination of sales figures, SAP data and information from an external, third-party provider, without requiring deep integration with each of these sources."

Several advances in technology have helped propel SOA to greater prominence over the past few years. "Centralized repositories are now in broad use, and they provide not just the code for the services but also information on how to use them," says Fitzgerald, "including metadata and the standard pieces that allow them to interact with different systems."

In addition, technology for the enterprise service bus (ESB), which connects the services and their associated applications, has advanced. "ESB has become mainstream in the last two years," adds Fitzgerald. "The webMethods ESB can connect to any standards-based application using WS protocols as well as via native adapters like PeopleSoft (now Oracle). The data is then converted to XML and sent to its destination, which might be a database, composite application or cell phone.

SOA management and governance

Because the intent of an SOA architecture is to allow services to be created that meet pressing business needs and can be used by multiple departments, a change in working style is needed for effective SOA governance. Greater collaboration between business users and IT, and also among different groups of business users, is required to leverage development efforts most effectively.

One approach is to establish a center of excellence (COE) within the enterprise to provide a focus for collaboration and governance. Fillmore Bowen, marketing manager for SOA governance at IBM, says, "The COE should have representatives from the business side and the IT side, but the business needs should be addressed first. What problem really needs solving? Then figure out how."

Bowen emphasizes that a new way of thinking is required for SOA. "Neither the IT staff nor business users are necessarily accustomed to thinking in terms of reuse," he says. "For many companies, this represents a change in paradigm."

The WebSphere Registry and Repository (WSRR) is IBM’s product for storing information about services. "If a new business process requires a credit check on a customer, for example, the owner of that business process can search the WSRR to see if one already exists," Bowen says.

Much like exploring a set of documents, the searcher can view a list of service titles. "If the user cannot locate a service based on its title," he explains, "he or she can do a keyword search on the description field or use metadata, such as date or author, to find the needed service."

Business first

Although software tools are critical to keeping track of services, governance is first and foremost a business issue. "Good companies manage their process improvement regardless of whether they are carrying it out on a computer or not," says AMR’s Swanton. "A process council or other governance body should determine what businesses get implemented as IT projects, and then a more technical architecture process can make sure the processes don’t stomp on each other."

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