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February 27, 2007

SOA is the 'DNA' of a Flexible Business

Remember back in the dot-com days when everyone was predicting how "clicks would replace bricks"? Everyone rushed into e-commerce, and a lot of money was spent in the wrong places to achieve uncertain and elusive business goals.

Sandy Carter, VP of SOA & WebSphere Strategy for IBM, worries that too many businesses will attempt, or are attempting, to plunge headlong into SOA the same way, and has some words of advice. In her latest book, The New Language of Business: SOA & Web 2.0, published by IBM Press, Carter builds the case for the book on a study of 456 CEOs that IBM conducted about a year ago. Not surprisingly, CEOs value growth above all else, but flexibility and adaptability in skills also are top of mind in the C-level suite. And there is a direct connection between all three -- companies that had the highest levels of integration and automation of key processes within highly flexible infrastructures showed the most growth as well.

"On the average," Carter observed, "these companies grew earnings 17 points faster than their peers and experienced 1.3 points of improved net profit margin, 1.3 points better difference in ROI, and 0.7 points better difference in return on assets." In a large corporation, each point means a lot of money -- in the tens of millions of dollars and beyond.

Carter defines these companies that can align their resources and achieve lightning speed and agility to rapidly changing business needs as "flex-pon-sive" organizations. And the DNA of a flex-pon-sive business is SOA. But, she cautions, "your journey begins with a focus on a real business problem, not SOA." An incremental buildout of SOA is the key, she says.

Interestingly, Carter attempts to connect the dots between SOA and Web 2.0 (wikis, mashups, collaboration) in the book, noting that they are cut from the same cloth: Technically, protocols such as REST and AJAX -- seen as Web 2.0 standards -- are also enablers for SOA. "Web 2.0 drives the consumption of services. The key is to tie the flexibility of Web 2.0 to service-oriented prinsiples of loose coupling, encapsulation, and reuse that are the heart and soul of SOA." She adds that "it is imperative for business leaders today to ensure that they understand what Web 2.0 is and the advantages that SOA and Web 2.0 can bring to the table."

Carter identified the five "entry points" through which an organization can begin to leverage SOA, each bringing its own sets of benefits:

People -- deliver role-based interaction and collaboration through services. This delivers "improved productivity by putting the user experience within the context of the business process."

Process -- achieve business process innovation through treating tasks as modular services. This delivers "greater innovation and flexibility through faster deployment and modification of business processes."

Information -- provide trusted information by treating it as a service. This results in "better business operations, more informed decision and reduced risk with information delivered in-line and in-context."

Reuse -- service-enable existing assets and fill portfolio gaps with new reusable services. This lowers risk and ensures faster time to market "by leveraging proven, time-tested functionality.

Connectivity -- connect systems, users, and business channels via open standards. This results in "reduced maintenance costs and greater reliability and consistency."

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