• April 1, 2006
  • By Marshall Lager, founder and managing principal, Third Idea Consulting; contributor, CRM magazine

Making SOA Pay Right Away

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Service-oriented architecture (SOA) is the next big thing in enterprise software, but sometimes--especially with infrastructure--bigger isn't better, and it's hard to know where to start. IBM knows where. An SOA development leader (courtesy of its WebSphere platform), IBM has been implementing SOA for customers one step at a time. Sandy Carter, vice president for SOA and WebSphere strategy and marketing, says, "We did some data mining among our 1,800 users and discovered that most--and the most successful--were doing smaller projects to help them get started." Which projects are the ones that show the fastest payoff? There are five, as revealed in the IBM white paper "Five SOA Projects That Can Pay for Themselves in Six Months."
  • Building a single source of information. Having a 360-degree view of customers is a CRM staple. IBM implemented a delivery notification service for a retailer, occupying four developers for four months. By linking the systems in its fulfillment chain so that they communicate continuously and reliably, automatically informing customers of status changes, the retailer achieved positive revenue impact of $20 million per year at a cost of just a fraction of that.
  • Automating processes across multiple users and companies. Exceptions and errors in business require costly, time-consuming intervention. A self-regulating dispute-resolution system improves customer satisfaction and frees up labor. A financial services organization replaced its manual dispute resolution with a centralized system. Customers now log onto a Web site and identify specific transactions to challenge. The organization's cost per transaction was reduced by 90 percent, and resolution periods fell from 20 days to three hours. Total savings are an estimated $200 million per year.
  • Delivering cost savings through service reuse. Another linchpin of SOA: The source of a service doesn't matter, only its usefulness. "It's possible to solve problems with point solutions, but that doesn't help the next problem," Carter says. "You get into the spaghetti-mess of solutions that SOA is designed to prevent." An Asia-Pacific government agency that had deployed an automated verification service for documents like passports and licenses was able to share it with four other agencies in that government. The process took five weeks and saved the cost of four separate systems.
  • Selling through partner Web sites to increase sales. Online selling through third parties greatly improves revenue, but only when the partnership is seamless. SOA allows resellers to give customers direct access to the original vendor's sales system, easing the process for all. A gift merchandiser integrated its sales portal with resellers and exposed its real-time inventory system, quickly strengthening relationships with customers and partners alike.
  • Making existing resources more efficient. A North American criminal justice agency was using an IBM Customer Information Control System (CICS) mainframe to deliver high volumes of criminal records to users at dumb terminals, but the clunky interface and lack of access to packaged software was too inefficient. SOA enabled the agency to keep the powerful CICS system, but retire the terminals, routing the interface through a secure Internet portal. Users now can work from their desktops and access other software. According to Carter, the projects share one of the underlying benefits of SOA: speedy time to market. "The rapid development of new products or processes possible through SOA allows fast delivery to end users," Carter says. "Clients can rapidly assemble new services from existing assets, and it's easy to replace those services as needed."
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