Service-oriented architecture (SOA) can transform your enterprise or it can be another IT-driven initiative with little or no bearing on business performance. Which way is your organization approaching SOA, if at all? This is one of the hot areas of IT, holding the promise of enterprise agility gained through the development and consumption of reusable business services. Leveraging business services in this manner can lower application development costs, reduce software maintenance, increase time to market, and drive agility through flexible business processes and composite applications built from services.
Although "services" approaches have been around a long time, as has software reuse, SOA's relative newness makes its adoption highly variable. Some organizations are approaching SOA from an IT perspective to improve the delivery of IT-enabled services to their internal business customers. Other organizations are turning SOA into a fundamental aspect of their business model. Still others are in industries where business pressure is forcing them to explore SOA to both deliver IT more efficiently and create platforms to deliver services and content to their customers.
All of these approaches are valid, but we are still in the early phases of SOA adoption. Early adopters and first movers share some common traits. First, they have recognized SOA as a significant force for change, and have acted on it. Second, some have seen SOA as a means to leverage an innovative culture to create new opportunities and business models. As a result, to position SOA as a transformation enabler requires combining it with other ingredients to create the elixir of transformation. Foresight, innovation, early adoption despite risks, first-mover advantage, business urgency — all of these are significant factors in transformational behavior.
Merrill Lynch was a very early adopter of Web services and SOA, and it invested heavily in training for its IT staff and developing services to enable better business and IT performance. In 2001, the company developed X4ML (XML for Merrill Lynch), software that would expose Web services from its legacy mainframe CICS transaction system environment. Though the notion of developing a proprietary Web services application met with internal skepticism, the company completed X4ML and ramped it up to expose and consume 600 Web services for 40 key applications, and to process some 1.5 million transactions per day. In 2005, Merrill Lynch sold X4ML to SOA Software with the idea that a software company could better maintain and support the product.
Merrill Lynch's story is one of innovation and first-mover advantage. The company had the foresight to invest in Web services early. It built an innovative application for exposing mainframe services and turned the tables by selling X4ML to a software company. None of this would have been possible if the company had not first been innovative, and, of course, viewed SOA and Web services as a transformational force for IT. For Merrill Lynch, being an early adopter enabled a financial windfall, as well.
Other companies have signed on to the concept of SOA-driven innovation, or what I call service-oriented innovation (SOI). Consider Amazon.com. The online retailer's e-commerce platform is recognized as one of the keys to its success. Amazon, much like Merrill Lynch, has embraced SOA and Web services as a way to differentiate its business model. Amazon gives developers and affiliates access to all of the Web services it builds and encourages them to design new applications based on Amazon's retail services platform.
Amazon uses SOA to project its ecosystem and extend its business model to a large community of affiliate developers, who then extend Amazon's retailing reach and technology platform. The company's SOA community model is designed to create loyalty to Amazon and engage external developers to improve Amazon's SOA technology platform. This form of SOA innovation is unique, visionary, and no less pioneering than Merrill Lynch's approach.
Telecommunications companies are also early adopters of SOA. Think about the cell phone, Blackberry, or PDA you carry. Wireless companies have established their fundamental business models and service delivery platforms based on SOA. T-Mobile, for one, has leveraged SOA to build out its wireless service delivery platform to customers, but it also uses SOA to let third-party service providers, such as Time Warner and Bertelsmann Group, plug their content into T-Mobile's service delivery platform to offer differentiated and unique content to the handsets it sells.
The end consumers — you and I — enjoy a rich wireless experience as a result of the handset, the content and services delivered, and, of course, the convenience of wireless connectivity (OK, we'll leave the connectivity issue off the table for now) — all enabled by an SOA platform, and, more important, by an SOA-enabled business model.
It's Not Too Late
Manufacturers' SOA implementations to date have not been quite as business transforming as the examples discussed above. British American Tobacco's SOA approach is focused on productivity and ROI, and the company has partnered with multiple SOA best-of-breed solution providers.
And Belgian steel producer SIDMAR has used SOA to drive a more agile model for enterprise application integration (EAI) and manufacturing execution system (MES) integration. The company has implemented more advanced capabilities around business process orchestration using the business process execution language (BPEL) standard, and it has leveraged SOA for better information sharing with its parent company.
Manufacturing still lags other industries in adopting SOA, as both a superior internal integration solution and a business transformation enabler. In my opinion, this suggests a tremendous opportunity for manufacturing companies to explore how SOA might enable fundamental changes to their innovation processes and business models.
To be sure, SOA represents a technology and architectural trend. However, it can be much more, depending on how companies approach its implementation. If SOA is pursued for internal IT transformation, executives need to make sure that the "business of IT" — in addition to the technical delivery capabilities — is transformed. The examples discussed here merely scratch the surface of SOI's potential. Given the proper motivation and initial ingredients, SOA can become a business transformational force. You have to frame your SOA initiative with transformational intentions for this to be possible. As the examples demonstrate, SOA can be a transformation enabler, but you must make it so.
— Eric A. Marks is president and CEO of AgilePath Corp.