Is SOA a $53 billion secret?

The gains possible through SOA can be enormous, if we can find a way to articulate it to the rest of the business
Written by Joe McKendrick, Contributing Writer

A new report out of AberdeenGroup calculates that the world's largest companies can save a total of $53 billion in IT spending over the next five years if they implement SOA. 

However, that $53 billion is not a slam-dunk by any measure, Aberdeen's William Mougayar relates in his new report, based in large part on a survey of 284 enterprises. In short, the gains possible through SOA can be enormous -- if we can find a way to articulate it to the rest of the business. 

With all the vendor and industry hype out there right now around SOA, you would think that everyone is tuned into (or being force-fed) the SOA message by now. However, SOA may still be perceived as more of an IT suboptimization process than a business driver. The big issue is the visibility -- or lack thereof -- of SOA within enterprise walls. Right now, only a small minority of companies have any measurable experience with SOA, defined as having worked with at least two or three projects over the past 24  months. Only 16 percent of the survey respondents could say this.

Plus, SOA -- at least the current incarnation based around XML Web services and loosely coupled services -- is still a relatively new concept; still too new to have really taken root. And the question becomes, will SOA remain a phenomenom that's invisible outside of the data center and development shop? Technically, a good SOA should be invisible to business end-users.

Mougayar shared the report's results with me, and what is evident that SOA is very much an IT-driven activity at this time. This will account for part of the $53 billion, generated through savings in IT time and increased productivity. The other, more amorphous side of the equation comes from the new revenues or business capabilities made possible by SOA.

We can sell the IT productivity gains and cost savings. But how do we translate SOA-based implementations into business growth opportunities? Aberdeen calculates 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.
The survey finds that SOA is still very much in the domain of IT departments, led by CIOs and architects. Only 14 percent report that SOA is a business-led initiative, and nine percent have some type of "business process office" leading the effort. Mougayar says that CIOs need to increase the visibility and footprints of SOA projects rapidly to gain the maximum benefit.
The main challenges in SOA, as found in the survey, include limited visibility for SOA value (41 percent), limited in-house IT skills (34 percent) and limited vision/support or understanding from the business side (31 percent). 

The way respondents have addressed this challenge is to initiate a small pilot to show success (54 percent), systematic planning approach (42 percent), technical education (40 percent), and choosing strategic  vendors/technologies to work with (33 percent), business education (31 percent).

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