Is there real business value behind the hype of SOA?

June 19, 2006 from ComputerWorld - "The No. 1 business priority for CIOs in 2006 is business process improvement 1 -- implementing technology to help the business become more streamlined and easier to do business with. The good news is that IT executives realize that collaborating with business leaders to drive business process improvements is vital to company success; the bad news is that even though business/IT alignment has been a top priority for the past eight years and IT organizations are transforming, the issue of business/IT alignment remains.

Now comes service-oriented architecture (SOA) with promises to change the way that IT helps drive business process improvements and even how IT and business work together. The idea behind SOA is that a services-centric application and IT infrastructure can be assembled flexibly to support changing business demands, growth and innovation. But is SOA just another vendor initiative to sell more hardware, software and services, or is it truly an industry-changing construct? In other words, is there real business value behind the hype?

SOA is being sold as a flexible way to configure all IT assets, both current and future, so that each is available as a service. SOA is supposed to provide the foundation for rapid, dynamic adaptation to changing business conditions.

The ills SOA is meant to cure are well known. Application and infrastructure investments have created islands, with applications developed to support a specific business function or need -- a payroll application, say, or an order-entry application. The IT group works with the business to identify a specific business process need, then procures, develops or customizes software to solve the problem. It deploys the software on dedicated server and storage hardware. Later, when the business realizes that these islands need to communicate and interact with one another, large integration projects are undertaken. And when the applications are modified, vendor enhancements, upgrades and support are all in jeopardy. In the end, much of the dedicated capital investment in hardware and purchased software has been underutilized, highly customized and inflexible to change.

With SOA, the organization begins by trying to better understand business processes, mapping out various process steps and then devising Web service-enabled applications and integrations in support of these steps. Process improvement has its roots in the Total Quality Management movement in the late '80s, but the goal of process automation wasn't possible until the Internet became part of a global network that can provide a foundation for program-to-program communication and standards-based information exchange. Today, Web service enablement allows for application components to deliver data and processing to other applications. And as the library of service-enabled applications grows, each service can be reused to optimize other business processes…

The coverage SOA has received recently may make it seem like pure hype. However, the benefits are tangible and substantial. Those who have taken even minor steps on the road to implementing SOA are reaping immediate IT cost reductions and incremental business benefits. Those that have gone farther down the road, embracing enterprisewide implementation of service-oriented applications and a service-oriented, virtualized infrastructure, are finding that they have made a fundamental change in the way IT and the business invest in technology and work together."

180 View - The article gives an example of Visa with "savings said to total $52 million a year in direct operating costs and $300 million in ancillary savings" using SOA. Unfortunately it's so easy to find numbers that support a business case especially when the numbers come from the people responsible for the project. In the VISA example, a paper based system was replaced. Perhaps, the savngs would have been even more with a different technology.