BrainTrust Query: Is service-oriented architecture (SOA) technology the wave of the future?
By Ron Margulis, managing director, RAM Communications
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.
ABSOLUTELY! Companies who understand the business values of SOA are already achieving competitive advantages that their competitors will be blind sided with. SOA is really the next generation of Business Intelligence. Companies understanding the value of Business Intelligence, will also get the value in SOA.
Are companies doing it now? Yes, a few. But we are seeing increased interest. Those of us that understand the value, still feel like missionaries, but we were also missionaries in data warehousing and business intelligence many years ago. By allowing faster access to information both internally and with related partners, you will improve business performance. In addition, when SOA is coupled with a sound architecture that streamlines the data integration process, you are improving business efficiencies as well as internal knowledge and response time. It may sound like more technical jargon, but understanding the business value is what is most important.
Like many technology innovations it is not the technology so much, as the ability of business users to understand how to use it. SOA is an approach to implementing technology just like cars, trucks, trains, buses, and airplanes are forms of transportation. In order to make effective use of SOA the businessperson has to understand where they’re going, when they need to get there, and what they need to carry. The challenge with SOA is that it makes the technology so flexible that integration is no longer the barrier to collaboration. If the business has not carefully decided where they’re going and provided the guidance to the technology developers the result will be services that look like pieces of different puzzles cut from the same image. There is no way to recreate the whole picture.
For SOA, industry organizations have to get together and define the business services that are needed and how they want to collaborate with other members of the supply chain. Then the technologists can develop the solutions. The closest effort in this area for retail operations has been VICS. The CPFR effort sponsored by VICS provides a clear image of the retail supply channel for technology developers. Other industries such as the electronics industry have done a pretty good job with efforts like Rosetta Net to establish back end standards for parts supply, etc. So the answer for right now is that more businesses must dedicate the resources necessary to reach a consensus on how business processes should be defined. Only then will SOA reach its full potential.
Author Paul C. Brown begins his just released book “Succeeding with SOA” with this observation: “Business processes and information systems have become so tightly intertwined that it is no longer possible to design one without designing the other. Business processes do not simply depend on information systems–they define the services required.”
Ron has properly framed his questions regarding adoption of SOA by pointing back to the early days of ERP…SOA is indeed in a relatively nascent stage of development, but significant investment in SOA tools, frameworks, and enabling technologies has already taken place and real results are being are being achieved.
At this point, it may be appropriate for my “full disclosure” statement: Ealier today I attended the TIBCO User Conference (TUCON) in San Francisco where I listened to very positive ‘firsthand reports’ from SOA’s early adopters, including a leading west coast retailer and a major food/beverage company…while I’m at it, I should also disclose that the aforementioned author, Paul C. Brown, is a colleague of mine in the Global Business Architecture group at TIBCO. Personal biases aside, I can assure you that SOA is very real, and its positive impacts on business processes will be felt for many years to come.
It’s not a matter of whether retailers will embrace SOA, it’s more like how quickly they’re going to do it. Check out Home Depot’s Show Room Checkout process and how they developed and implemented it in just 6 months, and retailers will realize how it will impact their integration and development costs, along with speed to market for new applications. SOA, along with the support of standards from organizations such as ARTS will drive the rapid adoption of this exciting technology.
The answer, as is frequently the case with new technology, is “maybe.” Experience suggests that SOA will not have an impact on retailing until it moves beyond its current jargon-laden definition and description into a world of practical terminology where its power to “connect the dots” is clearly evident. Only at this point will it enjoy broad scale acceptance in the pragmatic world of retailing.
Anything that is so innovatively flexible that it can easily accommodate the evolving wants of consumers in today’s fast paced changing marketplace will impact on retailing and manufacturing operations. While it may be premature to guarantee future success for SOA, its day will most likely come.
This is a marvelous development that appears to have a great deal of potential. The business arenas that SOA is focused on and what it is designed to do, if it works as it is said to, could make it a significant tool.
Like its predecessors, SOA appears to be based on the ideas that once information is known, it flows freely in a business organization, can be acted upon freely, and that organizational changes can be implemented once the critical information regarding the issues is known. These might be summed in the commonly heard idea, “Information/knowledge is power.”
Every so often, we hold demonstrations for small groups of executives. One of the exercises we go through together is participants re-enacting a conversation with another executive regarding a significant business issue where they did not get the outcome they desired. We openly surface the ineffective strategies being used in the conversation (this surfacing is the information/knowledge that is SUPPOSED to be transformative), but in every single case, not a single executive in the room, when they try out the role-play, is able to use a different behavior. This is an example of the overarching System that controls how information is used.
Let me give another example. In my view, Six-Sigma is also based on the idea that information/knowledge is freely transformative. There is a Fortune 100 company that is deeply involved in the implementation of Six-Sigma; one large workgroup had developed a work redesign that would save thousands of hours and millions of dollars across the company, and had buy-in from the decision-makers for the process. The change was halted, for a number of interesting “political” reasons.
I believe we can make these technology-based organizational enablement systems, such as SOA, more effective if we recognize that these enablement systems do not really operate freely within organizations. I believe we need to recognize that there is a System that overrides them, and recognize that if we fully engage this other, Master System, that SOA, Six-Sigma, Lean Process, ERP, CRM, and all the rest, may finally deliver the outcomes we have thought they should. I believe this is why it is not uncommon for us to scratch our heads and say, “We had all the data, all the buy-in, success in all the pilot-programs and simulations, so why didn’t it work?”
There is almost no one really embracing SOA in any meaningful way yet, though certainly there are a number of companies somewhere on the journey.
SOA really does have the potential to drive many benefits, including: easier integration and collaboration across the supply chain; ability to more quickly develop new technology systems and processes that react to market or other opportunities; and (perhaps) more flexibility to select software systems that meet specific needs and more easily plug them into enterprise systems, like SAP.
It is possible the SOA and “web services” will fall on the “false hope” ash heap that we’ve seen before with “object oriented” programming, EAI, etc, etc. But I don’t think so. It’s real, but takes a long time to get there, as early research is showing.
SOA has a lot of potential–but so did EAI. And there are still a lot of retailers out there doing point-to-point integration.
Interestingly, you may find that retailers, whether knowingly or not, already have some SOA in their portfolio–through their purchases of packaged applications. A lot of vendors have or are converting their apps to SOA or a web services architecture. The problem is that this approach, even in the packaged app realm, is still really immature–the user interface for defining process flow, for example, has a long way to go for most apps out there, and the underlying workflow in almost all cases is proprietary, so it’s not like these apps are designed to fit into an enterprise workflow or BPM implementation.
SOA is a lot like RFID–people envision the end game very easily, but we are so far away from that end game that such “visioning” is almost counter-productive. You’re still going to need some very basic, tactical integration/middleware work before you can start having any meaningful discussion of SOA–and for a lot of retailers, that in itself is going to take a long time.
JD Edwards once had a great ad campaign slogan, “Idea to action.” That’s the goal of all IT solutions. So SOA’s promise is very appealing. Is it real? Well, any tool can be used skillfully or unskillfully. Many people believe that simplicity leads to quick action, but then they want every possible feature to be included. Hard to have both, SOA or not.