BrainTrust Query: Is service-oriented architecture (SOA) technology the wave of the future?
Enterprise service-oriented architecture (SOA), which enables companies to rapidly respond to changing business requirements and competitive market dynamics, while maximizing existing IT resources, was one of the key tech trends discussed at SAPPHIRE '07, SAP's international customer conference, held in Atlanta last week. Before the reader gets bleary-eyed, this has the potential to be very important stuff that will shape the way professionals at every level make business decisions in the future.
Enterprise SOA helps companies increase their competitive advantage and build a sustainable business by accelerating innovation, capturing new revenue, developing operational efficiencies and empowering information workers. With enterprise SOA, companies link stand-alone business activities to quickly create end-to-end processes, selectively redesign existing processes to make changes faster and facilitate seamless execution across company boundaries to include business partners. This adaptable architecture helps companies achieve business network transformation - the optimization of a company's network of suppliers, partners and distributors - to maximize productivity and accelerate innovation.
The bottom line is that enterprise SOA translates to rapid deployment of new product and service offerings, tighter integration with partner networks, streamlined common processes, a collaborative work environment to leverage knowledge across the organization and the ability to empower a mobile workforce.
"In the 1990s, companies combined business process re-engineering with ERP systems to achieve new levels of operational efficiency," said Henning Kagermann, CEO of SAP. "Today, companies are seeking to combine business network transformation with enterprise SOA to achieve new levels of competitive differentiation. As we observe business network transformation happening globally, we predict it will elevate IT to a more strategic role for the business in the future."
Mr. Kagermann added that the combination of business network transformation and the advent of enterprise SOA form a powerful foundation for creating an even greater competitive advantage for companies.
Discussion Question: What impact will service-oriented architecture have on retail and manufacturing operations? Are there current examples of retailers or suppliers using SOA with a positive impact?
[Author's commentary] SOA is a highly technical issue, but so were enterprise resource planning, CRM and inventory management systems when they first appeared in the market. Retailers and manufacturers need to be aware of developments in this area because innovative companies on both sides of the supply chain will be looking to partner with others making the investment to integrate processes and it is these relationships that will have competitive advantage.