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SOA - The Backbone of the Alert Enterprise - SOA - The Backbone of the Alert Enterprise

Let’s map the top 5 in this list to a few specific business scenarios.

Evolving customer needs and preferences – In order to streamline their own procurement operations, customers may wish to shift a higher percentage of their purchase orders and order releases to a B2B channel, rather than phoning or faxing orders to their suppliers.  You are more than happy to comply with this need, because it also translates to lower order management costs, higher productivity for order management personnel, and improved data accuracy.  By re-using application services defined by SOA, the creation of this “new” capability is made much simpler and deployed faster.

Competitive moves, threats and pressures – The American automotive industry is under serious pressure from foreign automakers, and is struggling to deal with health care and pension commitments to its workers.   GM and Ford have both announced major retrenchments and layoffs, with more to come.  Eventually, they may have to pare down the number of unique brands that they manage.  Normally you might not think of this kind of business consolidation as having a direct impact on IT applications, but it certainly can.  What is often forgotten is that there are few companies that have complete application and systems homogeneity throughout their enterprise.  Even with ERP, it is not uncommon to see more than one vendor’s product in use.  Consequently, if a company is consolidating plants and warehouses across its supply chain, it may have to realign, reconfigure, and even redeploy applications along the path.  Business rules and processes may change, too, all of which needs to be reflected in the underlying systems.  While it may be counterintuitive, the need to eliminate these “redundant” systems and processes can actually increase IT complexity with SOA helping to simplify this challenge by facilitating easier redeployments.

New product, service and revenue opportunities – Using the auto industry again as an example, it is fascinating to see how cars are becoming high-tech havens of electronic gizmos.  Elaborate infotainment systems are becoming the norm, from sound systems, to video, to navigation systems.  Under the hood, computers have become essential to the proper functioning of our vehicles.    Customers may still care most about the overall style and reliability of the car itself, but these high tech gadgets are proving to be a major source of differentiation, constantly upping the ante for consumers’ attention.  And underlying much of the high tech electronics is sophisticated software.  SOA offers the opportunity for automotive high-tech component suppliers to rapidly reuse and reconfigure their solutions to the OEMs.  The same can be said of a number of other manufacturing sectors as well, such as consumer products goods or high-tech, along with financial services, media & entertainment, professional services or virtually any business that delivers its product or service digitally.

Cost savings and operational efficiency – In the High Tech industry, outsourcing has become the norm, as OEMs focus their attention on new product introductions in response to end consumer demands.  EMS (Electronics Manufacturing Services) providers and other contract manufacturers (CM) focus much of their attention on being highly efficient in delivering subassemblies or even finished products to the OEMs at the lowest possible cost, with high quality and, of course, on time.  The challenge for the EMS providers and CMs is to respond to the service level agreements with their OEMs in light of rapidly changing demand.  SOA provides an excellent platform for establishing B2B linkages from the EMS/CM to their OEMs.

Regulatory and legislative requirements – With each new country or geographic market that a company decides to play in comes new regulatory hurdles:  trade restrictions; restrictions on component content as with RoHS, the Restriction on Hazardous Substances; and proper handling and disposal of product returns as with WEEE, or Waste Electrical and Electronic Equipment, directives.  With SOA, the core demand fulfillment processes and application services can remain the same, and thus be reused, and new or modified services can be grafted in relatively easily.   By deploying these systems at a more molecular level, enterprises can ultimately benefit from the enhanced flexibility that allows them to meet matrixed requirements with greater speed, precision and cost-effectiveness.

At its core, SOA delivers the ability to develop systems out of reusable parts.  Elevating this from simply an IT benefit to a business benefits is the added ability for business process actors to participate directly in this effort.  If you think about the so-called SOA stack – services, registry, messaging, web services management, orchestration, analytics and user interface – the first four belong largely to the realm of IT, that is, the users in the lines of business don’t really have an appreciation (nor do they need to) for what is occurring essentially under the covers from their perspective. The lines of business clearly care about and understand the analytics and user interface, as this is what they see day in and day out.

As shown in figure 3, orchestration is the bridge between these two worlds of IT and the LOB.  On the LOB level, it gives them a real-time view to their business processes such as order to cash and procure to pay, and it is the platform from which they can propose process improvements.  On the IT level, orchestration, or BPM, is the tool by which these business processes become real in terms of the underlying systems and applications.  But to really create alignment between the two worlds of IT and the LOB, it is critical to define the ROI on both sides of this divide.