Betting on SOA Can Pay Big Dividends for SMEs

Feature Article | April 16, 2008 by admin

Marcia Kaufmann


Why does SOA remain a tough sell in the SME market?

Kaufman: I think some of the resistance in this market is based on misconceptions about SOA − what it is and exactly what it can do for businesses.

What’s a good working definition of SOA?

Kaufman: SOA is an approach to building systems that enables companies to capitalize on their existing software assets and rapidly adapt to change. One of the key points to remember about SOA is that it’s not a new technology or set of software features. SOA is a new way of thinking about and organizing technology resources to empower businesses.

The primary focus of SOA is the company’s business processes and goals. Viewed from this business-centric angle, systems and applications serve as a means to the company’s ends, rather than an end in itself. To reap the full value of their investment, companies need to shift their focus from a narrow idea of SOA as an IT initiative to a broader understanding of its merits as a business strategy.

Why should SMEs consider adopting this strategy?

Kaufman: The short answer is that SOA offers the same benefits to SMEs that it does to Fortune 1000 companies. The fact is that many of the challenges that confront major global enterprises pose an equal threat to SMEs. No matter if it concerns the globalization of markets, the supply chains or the constantly accelerating pace of technological, political, and economic change.

The typical mid-market business has multiple locations, and many smaller enterprises, such as Internet retailers, sell their products and services around the world. To function efficiently and stay competitive, these SMEs have to look and function like much larger enterprises. Although the day-to-day operations of a small mortgage lender or regional power company may differ greatly in scale and complexity from those of a mammoth corporation, its need to connect and understand data from multiple customers and partners is just as urgent.

What is the biggest benefit of SOA?

Kaufman: One of the major benefits SOA offers is the ability to communicate across disconnected data sources in a global way. With fast, reliable, and secure communications across the extended workplace, companies of every size can respond more quickly and effectively to changing customer demands. It’s also important for SMEs to understand that the fundamentals of the SOA game plan for delivering value remain the same regardless of the scope of the implementation.

Can you describe that game plan in terms of who does what?

Kaufman: The process requires close collaboration between business leaders and IT executives. The first step is for top management to define the company’s core business functions as well as its strategic business objectives. The job of the IT professionals then becomes to design systems and applications that will optimize those functions and implement companywide goals.

With a SOA approach, core business processes are represented as a set of flexible services that are isolated from changeable software elements in a virtual “black box.” The idea is to ensure the consistency of critical services across a variety of user applications by enabling those services to operate independently of the diverse programs used to invoke them. This type of architecture enables businesses to respond nimbly to change by freeing developers to quickly upgrade or replace outmoded services without having to retool a slew of client applications.

Can you give a real-world example of how an SME benefited from this approach?

Kaufman: One of our case studies in SOA For Dummies looks at a small public utility, Delaware Electric. The key objective at that company was keeping the lights on. Following SOA principles, the company homed in on that business issue and identified the applications that would address it. By then repackaging customer information from disparate sources as services that could be used and reused in a variety of situations, the company enabled in-house users as well technicians in the field to handle customer issues in a much more immediate and meaningful way.

To shed more light on the bottom-line results that can be achieved with SOA, we’re including more case studies on a variety of companies in our upcoming revision of SOA For Dummies.

What are the major obstacles to successful SOA implementation?

Kaufman: The primary challenge is finding ways to help business executives and IT professionals communicate more effectively. Business and IT leaders need a common language for discussing where the company is heading and how IT can support the company’s goals. At large and smaller enterprises alike, the importance of understanding the politics involved can’t be overstated.

Applications developed by IT departments that lack a clear understanding of what management wants to achieve are likely to fail to deliver the kind of return on SOA investments that company leaders expect. The basic idea behind Centers of Excellence at large enterprises − bringing together top leaders in IT and management to develop a closer working relationship − can prove equally useful for medium-size enterprises.

What are the most practical options for SMEs considering a SOA implementation?

Kaufman: A growing number of affordable packaged SOA solutions that are scaled to the needs of SMEs are available now from leading software vendors. Many VARs and ISVs are incorporating the best practices they’ve established by working with larger enterprises into SOA solutions targeted to SMEs in specific vertical markets.

By guiding businesses through the step-by-step process of identifying their most compelling business problems, as well as the processes and technology needed to resolve them, these best practices serve as a proven road map to a successful SOA implementation.

A small local bank, for instance, could employ the same basic principles and practices that worked for major financial institutions to address a limited number of urgent business problems in a cost-effective manner. The development of these industry-specific SOA solutions represents a promising approach to penetrating the highly diverse SME market.

What do you see as the prime areas for SOA investments in the coming year?

Kaufman: SOA-based solutions for improving the security and quality of data will remain important investment areas. Confidence in the quality of data is essential to timely decision making at organizations of every size. SOA-based security tools and mechanisms likewise extend the value of a flexible architecture by enabling local and remote teams to collaborate without putting the integrity and confidentiality of sensitive business information and proprietary business intelligence at risk.

Another critical area for 2008 and beyond is business process management (BPM). The benefits of BPM − tighter alignment of business processes and objectives, major efficiency gains, and support for regulatory compliance − are natural complements to the agility afforded by SOA.

By adding investments in these key areas to SOA best practices tailored to their needs, SMEs can start achieving measurable business results today while laying the groundwork for a future-proof real-time application environment.

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