Reality Check for SMEs

Service oriented architectures (SOAs) define business ecosystems designed to link system resources on demand. The goal: to make resources available to users in the network as independent services that are accessed in a standardized way. SOAs comprise loosely coupled, highly interoperable services, the fundamental characteristics that deliver value to the enterprise. So far, so good.
In order to leverage its benefits, SOA challenges companies to define a strategic architecture with a focus on integrating business processes, applications, and data. SOA is essentially the methodology for bringing it all together. SMEs must, perhaps for the first time, think beyond integration and incremental improvements and start thinking really strategically. This may require considerable consulting support, both for expertise in defining strategy and for custom development and deployment.

SOAs for SMEs?

SMEs are potentially good candidates for SOA projects because the business outcomes, particularly those resulting from rapid integration and reusability, are appealing from both cost and competitive standpoints. Often SMEs in particular suffer from difficult to maintain non-integrated or “hard-wired” individual software solutions. SOAs may be a way out, according to Rainer von Ammon, Professor of Software Engineering and Distributed Systems at the University of Applied Sciences Upper Austria, because they are not only about developing new applications, but especially about harmonizing existing software landscapes.
From a practical standpoint, strategic SME SOA projects are unlikely to be impeded by the enormous bureaucracies and legacy systems that burden large enterprises. In addition, at this point in time, as they plan IT investments to support business processes, decision makers are fortunately not up against the wall with a hard stop pressures such as Y2K. Philosophically, they can take a deliberate rather than a frantic approach, with thoughtful consideration of business demands and desired outcomes. SOA might be just what they need to level the playing field, and leapfrog over larger competitors that are slow to embrace SOA.
Of course, if external integration with a larger supply chain environment is a factor, demands may be great to get on board quickly. Powerful large enterprises calling the shots can create do or die scenarios for SMEs that supply it. As Randy Heffner, Vice President, Forrester Research, said “When Wal-Mart gets a cold, the industry sneezes.”
Most SMEs, however, tend to be rather more interested in quarterly results, cash flow, and sales pipelines than in arcane infrastructure and architecture discussions. Still, if the discussion takes place within the context of solving a particular business problem and enabling different ways of executing, C-level executives are likely to relate to and embrace SOA concepts.
According to Gartner Group, “Small and midsize businesses should view SOA as a natural, cost-effective progression from client/server IT architecture. It will help them serve customers better and save money by bringing processes closer together.” In the same report, “How Service-Oriented Architecture Will Affect SMBs”, Gartner also predicted that small and mid-sized business will make their processes at least 15 percent more efficient by deploying service-oriented architecture and service-oriented business applications.
On the other side of the coin, it’s still large companies that tend to be rich in web services and developers to architect strategic IT projects. Joe McKendrick, an analyst and editor with, a well known industry portal, recently commented on a survey of 1,000 companies of all sizes. He observes that 27 percent of organizations with 10,000 or more employees report having 21 or more Web services, compared with only four percent of the smaller companies.

Implementation: show me the money

SOA initiatives at SMEs can’t stay too theoretical for long. SME management, especially in bootstrapping companies, where cash flow is the overriding consideration, typically won’t tolerate long drawn out projects that don’t show results quickly. They’re going to want to SOA initiatives to pay off in what they consider a timely manner. That’s why it makes sense for IT professionals to step boldly into the gap between business and technology. Envisioning the SOA approach initially and developing a conceptual framework outline, they can move ahead with tactical web services, such as internal work flow projects, to demonstrate success. Forrester Research notes that 74 percent of SMEs they surveyed said that at the end of 2005 they would be using SOA for internal integration, while 24 percent expected to use it for external integration.
It’s not realistic to hold off implementation until a perfect world scenario can be achieved. Yes, it would be great if every software component could make its functionality available on demand. It would be ideal if all application components could be combined and rearranged with other elements in any number of different ways. In the meantime, it’s wise to think big but start small. Show the results and keep moving. Within the context of an overall SOA strategy, if you can show continued process improvement you’ll be able to show the money.

Who’s ready?

Many SMEs will take a “wait and see” approach to learn from successful SOA projects that materialize fruitfully, particularly for early adopters. The ones that will move forward first are those with management that conceptually grasps the potential value of SOA and a corporate culture that thrives on innovation. As Jeff Davies, director of software architecture and standards at broadband supplier Covad Communications Group, said, “…SOA requires more brainpower than technology.” Companies that fit this description are innovators in other dimensions, as well, with “thought leaders” at the helm supporting visionary approaches to such topics as customer relationships, RFID, supply chain visibility, and overall business process integration.
SOA makes sense. It is the right direction. As standards and protocols become better defined, as security issues are addressed, and challenges to managing metadata are overcome, supporting technologies will mature and more role models will emerge. And SMEs will find it easier to embrace SOA.

Christine Macfarlane
Christine Macfarlane