SOA funding paradox: pay today, restructure tomorrow?

Business to IT: 'Here’s the money, just build it. Now.'
Written by Joe McKendrick, Contributing Writer

Analysts, pundits, and vendors alike have been fretting about how SOA can be made financially viable, but Burton Group's Richard Watson has a different take on the situation: what if the funding flows, but the business isn't quite ready for SOA?

'Here’s the money, just build it. Now.'

Watson recently riffed on one of my previous posts on SOA funding dilemmas, pointing to paradoxes that tend to crop up in enterprises: the troubles with getting too much funding, and cost-justifying long-term projects in an environment that demands visible returns on a quarterly basis.

First, having too much funding for an SOA project seems like a good thing, but Watson points out that funding typically comes through the business units, which may be laying more on IT than it's ready to handle.

For one thing, many business units aren't showing any desire -- at least yet -- to share services with other parts of the enterprise. It takes a restructuring of financial mechanisms to make SOA tick, Watson says. "An organization’s incentives need to be shaped to promote service provision, service reuse and support for shared infrastructure. Other changes are required to follow through with this strategy including the accounting and financial flexibility to fund and charge-back shared infrastructure."

In other words, pushing SOA for one or two projects becomes a fundamental restructuring of the business. As Watson puts it: "Aren’t you sorry now you started pulling on that thread?  You just wanted to get funding for a SOA initiative and now you’re restructuring the business."

This is a case where IT is being asked to do things well beyond the scope of its authority and capabilities. Can a team consumed with keeping servers and networks up and running on a daily basis also go out and restructure the business's financial structure in its spare time?

The other issue is that business has very short time horizons in terms of demanding return on investment. SOA is a long-term process, extending over a period of years -- quarterly progress may be difficult to show.

For these kinds of issues, Watson recommends good governance, in which funding is driven by a central budget, perhaps controlled by the CTO's office. As he puts it:

"There is a mature IT governance process in place which means that while much of the funding demands are still for business unit driven projects they are funded from a central budget controlled by the CTO. The CTO architecture group has a unique vantage point from which to plan the evolution of IT, and identify the contribution each discrete project can make.  The remaining demand comes from the CTO-governed group itself for strategic projects, including those that cannot show ROI over one, two or even five years, but are crucial to transforming IT."

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