• October 19, 2005
  • By Coreen Bailor, (former) Associate Editor, CRM Magazine

SOA Continues to Pick Up Steam

Service-oriented architecture (SOA) will be the peak driver of corporate IT infrastructure investments in 2006, according to a pulse survey conducted by Capgemini. The survey, based on a poll of about 150 attendees at Siebel Customer World this week in Boston, revealed that 44 percent of respondents indicated SOA will be the priority for their organization's IT infrastructure in 2006, compared with technologies that garnered a smaller percentage, such as BI (with 35 percent). Additionally, 43 percent of respondents currently use SOA technologies, while 71 percent are considering using SOA as their company's IT infrastructure. The results coincide with the findings of a new report by Aberdeen Group focused on SOA's penetration into supply chain management (SCM). "The Service-Oriented Architecture in the Supply Chain Benchmark Report: What Supply Chain Managers Need to Know," sponsored by DW Morgan, One Network Enterprises, and Sun Microsystems, is based on a survey of approximately 300 line-of-business executives. Forty-five percent of companies surveyed have SOA projects involving the supply chain under way, while another 17 percent is planning projects in the next 12 months, and 20 percent said they would like to learn more. Of the remaining 18 percent, 14 percent have no action planned, and 4 percent are not interested. SOA gives companies the opportunity to speed up information integration while configuring business processes that can quickly meet internal and trading partner requirements, according to John Fontanella, senior vice president of supply chain services at Aberdeen. "There's very poor integration of the different applications that companies use to manage the supply chain," he says. Organizations employ a variety of applications and services for supply chain management. Only 6 percent of the companies surveyed use ERP exclusively in their SCM initiative, while 94 percent use a mix of best-of-breed applications, on-demand services, ERP systems, and desktop applications. "The current thinking is, if we standardize on a common application platform like an ERP platform and use as many applications as we can from the ERP vendor, then we'll get the integration," Fontanella says. More than 60 percent of companies with annual revenues of more than $1 billion say they either have or are in the process of standardizing on common ERP platforms for SCM, according to the report. Seventy-five percent of respondents with annual revenues surpassing $1 billion report that their supply chain apps limit the services these firms can offer customers. The report also segments survey respondents into three groups. Likely adopters are companies inclined to purchase the right software for a particular issue, have strong governance policies, and hold their IT counterparts in high regard; cautious adopters are similar to likely adopters, but tend to be very loyal to their ERP system vendor and have plans in place to reduce their application portfolio to standardize on ERP application platforms; and laggards, which are companies that lack any consistent IT strategy. For companies to capitalize on the promise of SOA, however, "businesspeople have to start to understand their processes, have to stop thinking about processes in the context of the way technology is currently deployed," Fontanella says, "and look toward the future, where there's more integration. It will be easier, it will come much cheaper, it will come much faster, and [be more flexible]." Related articles: Where's the SOA Train Headed?
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