Analysts Explain How to Drive Value from SOA at Gartner SOA & Application Development and Integration Summit 2009, June 24-25 in London
Organisations must set realistic expectations, and identify a few numerical measures of success agreed with the business, to achieve value from service-oriented architecture (SOA), according to Gartner, Inc. A global Gartner survey of 200 companies conducted in the fourth quarter of 2008, found that 40 per cent of SOA users don’t measure the time to achieve return on investment, and 50 per cent of non-SOA-users have not adopted it because they cannot articulate and demonstrate the business value of it.
“Many companies come to SOA with excessive expectations, such as immediately achieving quicker project cycles, but users often are not aware of the efforts, resources and time needed to achieve these benefits,” said Massimo Pezzini, research vice president and fellow at Gartner. “Consequently, some SOA projects are perceived to have failed when in fact there are simply no well established metrics to evaluate success. Therefore sometimes the benefits are there, but people keep arguing how much better things are, and whether any improvement is really linked to SOA.”
“Under the pressure of technology vendors and with a generally too optimistic view of the possible benefits, organisations tend to over-spend on technology but under-spend from an organisational and governance viewpoint, so they come to the conclusion that SOA is expensive and doesn’t deliver,” said Paolo Malinverno, research vice president at Gartner.
To ensure expectations are realistic and accurate measurement towards goals takes place, Gartner recommends organisations initially focus on achieving just one key benefit from the list of potential business advantages of SOA. As the SOA effort matures, and the benefit starts being delivered, they should add further benefits and change or add to the measures accordingly. Choice of benefit depends on what is the most urgent or important business value that benefit can deliver, and how quickly it can be reached. The benefits include:
Improved Efficiency in Business Processes Execution - Isolating the business logic from the functional application work enables a clearer view of what a process is, and the rules to which it adheres. This can be measured by lower process administrative costs, higher visibility on existing/running business processes, and reduced number of manual, paper-based steps; better service-level effectiveness; quicker implementation of process iterative or of variants of the same process for different contexts.
Quicker Time to Market/Shorter Project Cycles - The SOA principle of modularity results in services than can be reused repeatedly from different contexts. This can be measured by easier internationalisation of processes and quicker adaptation of processes to several products; the number of new products per unit of time; a higher percentage of on-time delivery of products; shorter IT integration of merging entities; a higher market coverage index (the number of countries an organisation sells in, weighted by size of revenue/target market global industry revenue); shortened project delivery times; and number of projects completed per unit of time.
Enablement of New Fast-Growth Business Models – Again, SOA’s modular, clearly defined, and shareable system interfaces, coupled with better application quality delivered faster, enable system scalability that can lead to new business models, such as e-commerce and cloud computing. Typical measures are the number of new processes identified and improved over 12 months; new ways/channels for interacting with customers/suppliers, and traffic/number of transactions associated; shortened time of integration of business partners; number of qualified sales leads; decreasing cost of sales.
Shift in IT Culture From New Developments to Reuse - Services being reused can be developed internally and outside the business (e.g. for B2B document exchange, or to extract CRM data), and used on demand on a SaaS basis. Measures can include SOA's total reuse factor (the number of service consumers/number of services) is increasing; a decreasing number of new service requests to the SOA centre of excellence; a decreasing number of new services added to the repository per month; and an increasing percentage of programmers' incentives based on the number of services they reuse or on the number of effectively reused services they design (not on the amount of software they develop from scratch or maintain).
Lowering Total Cost of Application Development and Maintenance- This cost tends to increase year by year, except when disruptive events (such as a major cost-cutting initiatives) bring it down drastically, causing significant pain within the organisation. A successful and well-governed SOA project brings these costs down, with considerably less organisational disruption. This cost is already measured in every IT department, straight out of IT budget data. Another measure is the reduced number of staff doing application development and maintenance, or the higher productivity of existing staff, such as application development or maintenance.
“Organisations must measure and communicate the success of SOA projects continuously in terms of the positive business outcomes achieved or the negative business outcomes avoided. If no-one knows what SOA is good for, it will be seen as just another fashion wave, and the SOA project will be at risk,” said Mr Pezzini.
Mr Pezzini added: “Organisations not yet engaged with SOA should avoid attempts at building a long-term business case for SOA. They should instead justify initial and focused investments in SOA in the context of projects aimed at addressing business needs with short to mid-term paybacks. Incremental investments to extend their SOA infrastructure and to strengthen governance processes should also be cost-justified on a project-by-project basis in terms of tangible business benefits.”
Additional information is available in the Gartner report "Measuring the Value of SOA". The report is on Gartner's website at http://www.gartner.com/DisplayDocument?ref=g_search&id=833728&subref=simplesearch.
Gartner analysts will present additional insights into SOA at the Gartner SOA & Application Development and Integration Summit 2009, 24-25 June at the Royal Lancaster hotel in London, UK. The Summit gives the richest view of SOA, application development, application integration, multienterprise B2B and emerging trends available. Additional information is available at www.europe.gartner.com/soa. Members of the media can register by contacting Holly Stevens at email@example.com.
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