Gartner recently predicted that 50 percent of all new mission-critical applications and technology initiatives will be based on services-oriented architecture (SOA). That said, all of the leading enterprise vendors are touting SOA infrastructures, which promise the development of modular business services that can be easily integrated and reused, resulting in information technology (IT) that is truly flexible and adaptable. Because an SOA infrastructure can lead to significant time and cost savings, IT organizations can focus more resources and budget on innovation and on delivering new business services.
With so many mission-critical applications that are core to an enterprise's business, how do companies know which should first be moved to an SOA-based environment?
Consider a company's CRM system. CRM applies sales, marketing, customer service, e-business, and business analytics tools and techniques in support of an organization's business strategy. The tighter the link between CRM tools and an organization's business strategy, the greater the impact on the overall success of the business.
Moreover, customer service is a key business factor that will drive CIO decision-making over the next 12 to 24 months. The contact center, which integrates and synchronizes post-sale customer interactions, is the most critical point for customer relationships. A contact center should integrate Internet and call center interactions, all with the goal of providing a consistent customer experience, regardless of geographic locations. Good customer experiences reinforce brand loyalty and keep sales moving; bad customer experiences cost the enterprise money and credibility.
Other critical elements of a comprehensive CRM strategy include time management, sales management, telemarketing, telesales, marketing, e-business, field service support, business analytics, supply chain management, multimodal access, and data-sharing tools. To increase the speed of business and deliver superior customer service, all of these components are now multichannel, which means they can be accessed through many types of devices, anytime, anywhere. This makes for a complex system.
Services-Oriented Architecture Combines Efficiency and Effectiveness
Building these critical CRM applications on an SOA-based infrastructure has a powerful advantage as SOA platforms are designed to enable applications to share and reuse the same code base, as well as to power multiple channels. The greater the number of channels that can reuse common service capabilities, the higher the impact of SOA will be.
Achieving a True 360-Degree View with Services-Oriented Architecture
Transforming a business to become customer-centric requires a strategy focused on information acquisition, analysis, and proactive action on a 360-degree view of the customer. The real payoff from a services-oriented business application, therefore, will be the fusion of end-to-end business processes that deliver the holistic view and the agility of the business application to adapt to ever-changing market conditions.
Take a typical order-to-cash problem. This is a complex process that includes a number of steps: identification and verification of the customer, capturing the activity, verifying credit, checking for contract, ensuring inventory and status, determining and providing a quote to the customer, generating an order, provisioning, shipping, invoicing, and applying the payment.
This process spans several systems including CRM, ERP, and supply chain management (SCM); the process may take minutes or days to complete and requires oversight by highly trained individuals. It is unlikely that you will ever expose your order management system to your customers -- but you would like to drive sales through your Internet channel to drive down the cost of sales. While CRM systems are typically the only touch point for your customers, at some juncture there will be an interaction with back-office applications.
In many companies today, orders are passed manually to the back office. However, in order to manage an increase in sales orders, through the "always open" self-service channel on the Web, you will have to deliver a composite solution that ties critical front-office processes to the back-office applications. Traditional integration approaches have failed because of a lack of standardization (transports, data formats, and protocols) and poor architectural planning and awareness (point-to-point integration). The success of SOA depends on the acknowledgment and acceptance by the industry of the need for standards to deliver loosely coupled, best-of-breed, composite applications.
Through the use of middleware, based on SOA standards such as SOAP, WSDL, and BPEL, companies are able to acquire and reconcile information from CRM, ERP, and SCM information sources, resolving these integration challenges. In the above order-to-cash example, an SOA infrastructure could track and trace any order submission across the entire fulfillment supply chain in real time. The platform used for such applications combines the infrastructure of application servers and integration hubs with portal, content management, search, and collaboration capabilities. SOA-based middleware also delivers insight into the end-to-end process through business activity monitoring and real-time business intelligence, and further helps filter the events that are urgent based on real-time conditions of the business.
Through SOA, companies can see value today, by realizing the cost-effective use of information assets and delivering dynamic composite chains of loosely coupled, best-of-breed components and applications to reflect real-time business needs and conditions. Multichannel application areas make an excellent starting point for SOA-based initiatives. Once organizations are up to speed on these initial initiatives, integrating back- and front-office systems to attain that ultimate goal of the 360-degree customer view is merely an extension of the foundation you will have already put in place.
Mike Betzer is the vice president of CRM strategy at Oracle. Betzer has overall responsibility for CRM product strategy for Siebel, Oracle E-Business Suite, PeopleSoft Enterprise, and Oracle Fusion CRM product lines. Stephanie McReynolds, director of product management at Oracle, leads the event-driven architecture technology components team, including Oracle's sensor, RFID, complex event processing and business activity monitoring solutions.