Ask an IT manager like James Houghton to pinpoint the payoff he expects from implementing a service-oriented architecture (SOA), and he's likely to focus on integration. And it's no wonder. His company, Sun Chemical Corp. (Parsippany, NJ), has more than 350 manufacturing locations worldwide and a long list of legacy applications.
"We have more than 12 different ERP systems running in Europe alone," says Houghton, the IT director. "With that number of systems, the biggest challenge we face when we try to look at information globally is integration."
In fact, says Houghton, staggering integration cost estimates often trump proposed new system deployments projects. Houghton hopes that, by moving to a new software architecture in which applications interact with one another as services using Web-based standards, Sun can cut its integration costs by 40%, freeing up dollars for more valuable business projects.
For the past year, Sun has been defining core application services and building a SOA broker around the WebLogic platform from BEA Systems Inc. (San Jose, CA).
"Nirvana would be to have products we can buy that would be based on a service-oriented architecture and allow us to easily design, consume and orchestrate new systems with existing purchased products," says Houghton. "That way, we could build interoperable applications in weeks, not months like today when, with every project, we're reinventing the wheel."
Houghton isn't alone in longing for SOA to eliminate what has for years been the throbbing pain point of integration. In a recent Managing Automation survey, 40% of manufacturers said they plan to use SOAs mainly to fix integration problems.
THE POWER OF SOA
But, say experts, the long-term benefits of SOAs will go far beyond streamlining the integration of packaged applications. Once companies like Sun Chemical have deployed a SOA infrastructure, and vendors have recast applications to operate in a service-oriented fashion, it will enable manufacturers to react much more quickly to changing business conditions and opportunities. Manufacturers that are able to take advantage of the technology to become more agile will be in a position to wield disruptive power over their markets.
"SOA sets in motion a chain of possibilities, which ultimately leads to companies being able to continually optimize their businesses," says Randy Heffner, an analyst with Forrester Research (Cambridge, MA). "Right now businesses are unable to react quickly to change because business processes are frozen in the applications, which can't be changed quickly. SOA will change all that."
The recent rise of the SOA concept -- now endorsed by all major enterprise application vendors -- is often compared to the widespread embrace of client/server architecture for enterprise applications in the 1990s. In some ways, however, the shift from client/server to SOA will be much more profound than the shift from mainframe architectures to client/server. Client/server was essentially a collection of new protocols that allowed chunks of applications -- e.g. the user interface -- to be moved to new types of hardware -- e.g. the personal computer. SOA, on the other hand, is about breaking up monolithic applications into reusable services and, via Web standards, flexibly composing those services in ways that map closely to a company's business processes.
JUST PICTURE IT
Because SOA-enabled composite applications will map so closely to real business processes, modeling those applications will produce an accurate picture of how the business works. And, since SOA lends itself to rapid change through recomposition of services, the application model and the real world process model can be kept in sync, even as the business responds to rapid changes such as new regulations, new market entrants and mergers and acquisitions. Supporting that kind of rapid, model-driven change will be emerging standards such as the business process execution language (BPEL), which allows business models to be translated into executable application code. The end result: Manufacturers that embrace SOA and tools that utilize standards such as BPEL will be able to respond quickly to changes in the business and not be held back by inflexible enterprise applications.
"SOA changes the way we think about mapping business processes to the IT infrastructure, and the implications of that are potentially highly disruptive," says Gordon Van Huizen, chief technology officer at SOA middleware vendor Sonic Software Corp. (Bedford, MA). "SOA will enable much more flexibility and make possible much more dynamic behaviors by businesses."
Take, for example, the hypothetical case of a manufacturer that decided to use RFID data to monitor materials and products through all phases of its operations, from procurement through fulfillment. Such a capability would allow a manufacturer to track and respond to material flows, inventory levels and production capabilities in near real time. And that could easily spell a significant competitive advantage, says Vijay Tella, Application Server 10G chief strategy officer at Oracle Corp. "Real-time supply chains require you to pretty much have that kind of capability," says Tella. "It's a place where a lot of people are putting their money right now."
But current application architectures make getting there incredibly difficult. That's because, at most manufacturing companies, the applications that are used to run various parts of the supply chain -- procurement, supply chain planning, warehouse management -- operate in isolation from one another, making the monitoring and use of RFID data across the entire supply chain difficult, if not impossible.
SOA, however, would make visibility into such an end-to-end supply chain easier to achieve. That's because, for one thing, different applications -- or pieces of applications -- would be able to communicate easily with one another as services, making interoperability easier. And making changes in the way those services interact would be easier because such changes would be implemented from a single, consistent model of the business. So introducing something like RFID data across an entire end-to-end business process would become much more manageable, and much faster, says Nils Herzberg, senior vice president of manufacturing industry solutions management at SAP (Walldorf, Germany).
"With services-based architecture, we are reducing the time between when the CEO has a disruptive idea and when we can implement [it] in the market," says Herzberg. "We're reducing the lag between the idea and reality because we are using a much more flexible architecture that allows you to assemble what you want and change faster."
The ability to quickly refine and enhance end-to-end business processes will bring sustainable competitive advantages to manufacturers who embrace SOA, says Forrester's Heffner. "Companies will be able to continuously optimize the business model the way the Japanese automobile manufacturers have done since the 1970s," he says. "The Japanese came in and kicked Detroit's butt because of the processes they put in place around things like quality. But they've been able to sustain those advantages because they've continuously improved on those processes. They're still beating Detroit."
THE LONG AND WINDING ROAD
Of course, most manufacturers have a long way to go to achieve that kind of agility. Deploying service-oriented IT infrastructure -- an enterprise service bus, service repository, business process management tools -- and services-enabled applications will take several years.
But adopting new technology isn't the only change manufacturing companies will need to make in order to take advantage of the disruptive potential of SOA. They will also need to rethink the role that their IT organizations play. Because SOA and model-driven enterprise applications will enable rapid business process refinement, IT people and organizations will need to be reoriented toward understanding and improving business processes, not just keeping systems up and running 24/7, says Heffner.
"As process becomes the key connection point between the business and IT, IT people will need to get smart about collaborative business design," says Heffner. "Right now most IT people don't have the credibility to play that role. They'll have to earn it, starting now."
Sun Chemical has already figured that out. Last year it replaced what had been a centralized IT organizational model with a matrix approach, embedding IT people into lines of business. The idea, says Houghton, is to begin to help IT people gain a deeper understanding of the business.
"What it means is that IT can be viewed as a strategic enabler for growth," says Houghton. "But ... IT has to be able to speak the same language as the rest of the business."