If you believe the vendor hype, service-oriented architecture is on the cusp of going mainstream. Like it or not, SOA concepts are baked into nearly every enterprise application suite and factory automation system announced and delivered these days by the vendor community.
But how are SOA's principles of out-of-the-box application interoperability, reusable functionality, and improved operational flexibility resonating with manufacturers industry-wide? Well, most like the theory ("Heard it before," they say), but they are waiting to see quantifiable business value before they commit the time, money, and effort required to fully embrace this evolutionary approach to enterprise systems architecture.
Beyond the early adopters in financial services and telecommunications, SOA is a concept that is just beginning to roll out of vendor development labs and into business practice, says Dennis Gaughan, an AMR Research analyst. "If we look at data across all industries, 20% are doing something with SOA," Gaughan says. "About 35% to 40% are considering it in the next few months, and the balance have no plans."
Among manufacturers, consumer electronics makers seem to be the furthest along when it comes to SOA. The reason: Compressed product lifecycles make time-to-market their make-or-break business challenge, Gaughan explains. What's holding back the rest? Manufacturers are a pragmatic bunch, he says, and while not all come from Missouri, most have adopted the Show Me state's credo. "They want better clarity on where SOA can apply to [them]," he says. "They want to see the actual use cases."
Also, because most manufacturers prefer packaged software, their embrace of SOA is somewhat dependent on their enterprise software vendor's strategy. Otherwise, to roll out their own SOA they'll need software provided by Web services infrastructure vendors. The question, Gaughan says, then becomes: "Is my business problem acute enough to look at pure-play infrastructure vendors, or is an SAP or Oracle SOA mature enough to do what we need to do?" If the business problem isn't mission critical, perhaps the packaged application vendor will eventually solve the problem. But if the infrastructure route is the only viable option, then the manufacturer faces another costly hurdle: finding, hiring, and training developers to put the software to good use, he says.
Leading with business objectives is the only way to tackle SOA, says John Dean, CIO and vice president of global e-business at office-products maker Steelcase Inc. SOA needs a business rationale funded by a line-of-business manager who acts as champion, he says. With SOA, "Our purpose is to accelerate the achievement of our business strategy," Dean explains.
Steelcase has developed numerous applications that pivot around SOA principles. For example, shop floor managers at the company use an application that taps Web services to call a database to deliver a visual representation of the order queue. That's critical for a make-to-order business like Steelcase, whose products come in a variety of colors and configurations, Dean explains. The company's dealer system also uses Web services to pull pricing data from its SAP R3 (version 4.7) system to enable accurate quoting and fulfillment of customer contracts, he adds.
Yet, when it comes to adopting MySAP ERP 2005, the enterprise applications platform that SAP recently promised customers would be its stable SOA core for the next four years, Dean is somewhat non-committal. "There isn't anything of significance available in MySAP that solves a business problem that I have not solved," he says, adding that the migration costs, despite SAP's claims to the contrary, remain daunting. Dean quickly adds that Steelcase was among the first companies to implement SAP's MySAP SRM. Steelcase needed to deploy SAP's NetWeaver infrastructure software to make the transition. "There was a business case there," Dean says, which allowed Steelcase to establish a foothold in SAP's SOA foundation technology, "but still stay in the R3 world."
To get going with SOA, manufacturers must start with high-value projects that reveal demonstrable business benefits, notes Sharon Ward, worldwide manufacturing industry managing director at Microsoft Corp. Manufacturers need to start by assessing their business differentiators. Ward says they should ask themselves, "Why do customers want to do business with us, and what will make us faster and better to do business with?" Companies might even select a business area in which the competition is poised to strike.
"Don't worry about 9,999 business processes that don't matter. Worry about one that does matter and put all your eggs there. Then talk [technology] stack and start achieving efficiencies in all business," Ward says.
This article originally appeared in the November 2006 issue of Managing Automation.