Whether it is SOA, BPM, or EDI, solving integration challenges is more about rigorous business management than the latest technology.
More than most industries, the technology market thrives on acronyms and buzzwords. Visit the office of any of the Fortune 500's top IT decision-makers and you are sure to hear about the power of service-orientated architecture (SOA) or the promise of business process management (BPM). Perhaps unsurprisingly, the excited explanations are not coming from the IT team but from visiting sales teams pitching the latest must-have technology that will seamlessly solve all business challenges without a day of disruption.
Despite all the attention on new capabilities, the reality is most businesses spend just 2% to 5% of their IT budget on new technology. That means more than 95% of IT resources are focused on keeping the business running and extracting more value from the existing systems. Given that fact, the key to achieving business agility cannot be found in new technology alone. What is required is a shift in thinking that utilises technology constructs like SOA not as technology road maps but as a higher-level method for defining, organising and connecting business processes.
SOA is a practical and powerful concept, but it existed long before the advent of Web services. Indeed, many of the elements of SOA - such as service contracts, service abstraction, service compose-ability and so on - can be seen in ADP's first payroll service introduced in 1949. Fundamentally, it does not require the adoption of any particular technology for its benefits to be realised. When you truly break down the hype behind the latest technology promises, the challenges faced by businesses never really change. Businesses have always needed to share information with customers and partners in a timely manner. They have always needed to manage internal information and ensure the security of sensitive data. What does change is the sophistication of the technology available to address these challenges.
With the recent focus on service oriented architecture, many organisations are realising that successful technology implementations should start with a thorough review of business processes and objectives rather than an inventory of technology systems. Businesses can often rely on much of their existing technology combined to work together in new ways. From there, they can invest their 2% to 5% of their IT budget in new integration technology that works across existing systems, protocols and standards.
A great example of using SOA to get a handle on the overall business can be found in ViewSonic, the flat-screen monitor company. ViewSonic competes in a highly commoditised global market with ever-shrinking margins and pressure to constantly wring more efficiency out of a lean system. To stay competitive, ViewSonic sets out to provide its customers with maximum flexibility when they placed, checked, or changed orders. By becoming "the company easy to do business with", ViewSonic hoped to drive down costs and create sustainable revenue streams.
Although the goal was simple, achieving it was complex. ViewSonic processes more than 1.5 million transactions each year, sources various products from hundreds of different suppliers from multiple locations around the world and delivers their finished products to countless retailers and channel partners. In considering the size and scope of this environment, ViewSonic wanted to achieve the flexibility and benefits of an SOA design approach but also knew there was no practical way to select a single technology (or even a small number of technologies) that could be used across this large and diverse community of suppliers and customers. Viewing SOA more as a design philosophy than a technology choice, ViewSonic was able to quickly develop a flexible and effective system that implemented a true multi-enterprise SOA and continued to use the full range of technologies - EDI, XML, HTTP, FTP, SMTP, Web services, application-specific interfaces and others - that were already in use by their suppliers, customers and internal systems.
The SOA initiative achieved return on investment in 12 months and it allowed the company to open a new distribution channel representing tens of millions of dollars in new business. With new processes in place, ViewSonic can now provide their customers with the flexibility required to stay competitive and increase market share. And by focusing on the business process rather than the specific technology, ViewSonic found it was able to define simple and practical ways to solve its business challenges and turn its IT investment into a business driver for the company.
The same can be applied to many other technologies - technologies such as SOA, BPM and EAI are more closely related than it might initially appear, with most being complementary or even interchangeable. By focusing on how old and new IT concepts can be applied to existing technologies and integrated via tools that tolerate diversity of technology rather than attempting to stipulate a single choice of technology, IT managers are driving significant business results at very moderate costs.
Chris Johnson is vice-president of product management at Sterling Commerce
This was first published in January 2008