StrategyBy Michael Fitzgerald | Posted 2006-10-13 Email Print
Re-Thinking HR: What Every CIO Needs to Know About Tomorrow's Workforce
Companies are finding that a service-oriented architecture can deliver on the promise of extending applications across the enterprise. But before moving to SOA, CIOs need to reexamine the way they do things.
SOA can help IT departments become more efficient while allowing them to put together systems that can boost their company's business.
At many companies, IT falls on the cost side of the ledger. Which is why so many technology executives are attracted to the idea of SOA, or service-oriented architecture.
SOA is basically a computing architecture built around servicescomputing components that can be flexibly reused and recombined. In an SOA environment, which leverages standard mechanisms including eXtensible markup language (XML), software components advertise themselves on the corporate network as offering a service, such as a verification message, that other applications can discover and use. This makes IT more productive because, in part, it's much simpler to change a service, such as a verification message, than to change each verification message in every application that has one.
At Railinc Corp., a transportation logistics firm based in Cary, N.C., Garry Grandlienard, director of enterprise architecture, notes that many of his company's applications draw on certain basic information about railcars, stored in one main database. Before SOA, changing one element of that database might have meant changing 100 applications. With SOA in place, he may not need to make any application changes at all, since he can change the service layer and it will translate the database change for all applications.
Farmington Hills, Mich.-based RouteOne LLC is an exchange established by the finance arms of General Motors Corp., Ford Motor Co., DaimlerChrysler AG and Toyota Motor Corp. to provide auto dealers with access to a variety of financing options and services. Here, SOA gives CIO Joel Gruber a cost-effective way to make changes to his internal infrastructure without disrupting all the firms that use the exchange. In August, RouteOne began piloting an electronic contract feature, called eContracts, to allow auto dealers to forego paper contracts. Key to the eContracts pilot is a service the company built to test its messaging environment. At RouteOne, a transaction, such as an auto loan application, is treated as a type of message, and the testing environment lets the company see if new message types will cause any problems. "It doesn't sound like a service," notes Gruber. "But it's a utility service that means we don't break anything for our customers when we change something."
The kinds of efficiencies being realized at Railinc, RouteOne and elsewhere are leading corporate America to embrace SOA technology. Forrester Research Inc. predicted in April that more than half of all large U.S. companies will be using SOA by the end of this year, and of those currently using it, almost 70 percent intend to increase their use of it in the future.
And many of these companies46 percentare looking at SOA for more than just cost-cutting. They believe it has the potential to make a strategic impact on their businesses, helping to expand partnerships, connect more effectively with customers and suppliers, and develop entirely new offerings. IBM Corp. claims that about two-thirds of its 2,700 SOA customers are using the technology to help create new revenue streams.
Read the full story on CIOInsight.com: SOA: Getting Good Service