There was a time when the word 'dot' had positive connotations to it. Dot was revolutionary, turning the world upside down, wiping out intermediaries, turning business into seamless electronic transactions across the great global Internet. Sun prided itself on being the 'dot in dot-com.' Of course, more recently, 'dot' became more closely associated with dot-bomb. When it comes to quantifying SOA's delivery of business agility, all bets are off
Or, perhaps the dot is more akin to the vanishing point you would see in a sketch of a long highway disappearing into the horizon. And, that dot may represent our great expectations around SOA. CIO magazine's Christopher Koch took a hard look at the SOA pitches permeating through the market, and issued a warning to CIOs and other IT leaders: be wary. Very wary. "CIOs are chasing a 'distant dot' on the horizon called agility (the ability to change IT quickly to fit business needs) and the dot is receding," he wrote.
How do you measure what you can't see? Business agility can't be quantified, Koch observed, quoting Gartner's Daniel Sholler: "There's no metric that says if I'm more agile I will save X percent. The number-one difficulty with SOA is that it's hard to get the ROI down to the spreadsheet level."
If it ain't broke, why fix it? If you're a small company, you may not need SOA. If you're a large company, you may not need SOA. "Complexity is the prime prerequisite for SOA," Koch said. A small business, for example, may be an all-Microsoft shop, and thus, not have complex application integration requirements. Many larger companies may rely on a single vendor for much of their enterprise functionality, such as SAP, which also reduces the need for the cross-platform integration SOA can provide.
Why are vendors being so nice? "All vendors are looking to build long-term relationships with customers," Koch observed. "Consequently, despite the abundance of Web services standards embedded in their products to ease integration headaches, everybody has a proprietary hook somewhere. Oracle's Fusion applications will work only with Oracle's database. SAP's new applications require NetWeaver middleware. Even the integration infrastructure companies have enough proprietary elements to make it difficult to swap out their integration software." And beware of vendors pledging to build your SOA for you, Koch said.
Hmm. So what Koch seems to be saying is, 'don't expect too much from SOA, because it's mainly a vendor smoke-and-mirrors ploy, and besides, they already have their hooks deep inside of you already.'
I do agree with Koch that SOA may shrink into a dot -- or vanishing point -- when one attempts to move from measuring internal IT efficiencies to business agility. There are hard, substantial savings that can be seen in the reuse of services in terms of developer staffing and productivity. Koch quotes Forrester Research's Randy Heffner, who notes that SOA methodologies can shave about 40 percent off software project costs. "Even though services require more up-front design work, reuse means there will be no costs for design, coding or unit testing the next time around."
Remember earlier this year, when Aberdeen Group issued that bold calculation that businesses can collectively save about $53 billion in integration costs if they adopt more standardized SOA approaches? Well, that mainly came from IT productivity gains and cost savings. Aberdeen went on to say that a $10 billion company with a $300 million IT budget can save $30 million per year from a broad SOA adoption after a five-year horizon of implementing SOA in at least 75% of its applications.
But when it comes to the big Stage Two -- SOA delivering some kind of business agility, all bets are off. A survey out of the BPM Forum, for example, found that top executives are not happy with the levels of agility -- or lack therefore -- their technology is delivering. some three quarters of executives surveyed from larger companies with more than $500 million in revenues said they are not satisfied with the ability of their companies to respond to change.
Or, look at HP, which is eating plenty of its own dogfood, and going full-force into SOA. The company projects it will achieve a $70 million cost savings from its global IT operations as a direct result of SOA deployments. HP says the initial paybacks from SOA come through consolidation, reduction of redundancy and reuse across services. The long-term payoff comes from increased business agility, and an ability to react quicker to the marketplace. However, while the first phase is easy to measure and see payback, the second– and more lucrative — phase is more of a challenge, HP itself admits. "on the agility side, it’s more tricky, because you are dealing a lot more with unexpected things," said Andrew Pugsley, worldwide lead for SOA service development for HP. Pugsley advises building potential SOA business gains using a what-if analysis much like a risk assessment.