In today’s environment, business dynamics and technological innovations have left organizations with a disparate mix of operating systems, applications and databases. This makes it difficult, time-consuming and costly for IT departments to deliver new applications that integrate heterogeneous technologies. The key to success in the networked economy is being able to create business processes to automate value chains, and to modify these processes as business requirements change. Innovation in enterprise architecture will come from service-oriented architecture (SOA), business process management (BPM), business rules management (BRM) and business activity monitoring (BAM).
SOA transforms business computing assets into well-defined services. It can work effortlessly with BPM because of the reliance on services.
The Yankee Group 2005 Enterprise SOA Survey discovered that 84 percent of enterprises either had already deployed SOA technologies or were planning to invest in SOA during the next 12 months. The IT organizations of these enterprises have demonstrated that projects using SOA technologies can be developed more quickly and less expensively than those same projects not using SOA. SOA is resonating well with the overall strategic initiative of “doing more with less.” Yankee Group documented the benefits of SOA in the March 2005 DecisionNotes, “Enterprises Gain Agility by Making Long-Term Commitments to SOA” and “SOA Closes the Gap Between Technology Benefits and Business Requirements.”
SOA Needs Company
As early-adopter enterprises expanded the number of SOA projects in 2004 and 2005, they encountered additional challenges, such as information security and Web services management. These SOA pioneers tell Yankee Group that they are currently evaluating these additional requirements and examining product- based solutions. Some are also identifying requirements for process coordination and analytics. The latter two will encourage strategic examination of business process management, business rules management and business activity monitoring deployments across the enterprise–and not merely as tactical point solutions. BPM and BAM can be key horizontal technologies in an enterprise architecture that is grounded in SOA principles, where the goal is to make a company more agile to react to events in real time. The inclusion of BPM, BRM and BAM in an SOA is a crucial step toward establishing an IT infrastructure that cost-effectively supports the transformation to a real-time enterprise. BPM, BRM and BAM help create the basis for an accelerated response to ever-changing business requirements.
Delivering More Value
SOA transforms existing business computing assets into well-defined services. It can work effortlessly with BPM because of the reliance on services. SOA exposes services while BPM consumes them. When properly implemented, SOA opens a vast inventory of services for BPM to piece together into an all-inclusive flow of services.
While BPM defines and orchestrates the flow, BAM enables the real-time management of the process to increase efficiency and reduce operational costs. BAM aggregates, analyzes and presents relevant and timely information about business activities inside an organization and involving customers and partners.
BAM provides more accurate information about the status and results of various operations, processes and transactions so a company can make better decisions, more quickly address problem areas and reposition itself to take full advantage of emerging opportunities.
BAM leverages the information and analytics concepts of business intelligence (BI) and extends them by including event management, business rules and workflow. These extensions are intuitive methods that enable organizations to discover events that are relevant and actionable, such as a requested change to a customer order or a change to the availability of raw materials. BAM also differs from BI in that information is accessed directly from the message infrastructure rather than from a data mart.
The drive to use SOA to create a more agile infrastructure also highlights the importance of externalizing highly volatile business logic that is subject to change.
Highly volatile business logic can be defined as business rules. In the traditional application structure these business rules are buried in the application while in a more modern approach they are separated. Just as process flow can be separated from application code into an external BPM engine, the same can be done with business rules. Separating both process flow and business rules empowers a business analyst to make operational changes more quickly, providing maximum flexibility and adaptability.
An important shared characteristic of BPM, BAM, BRM and SOA is that they all deliver tactical cost/time benefits while building a base for competitive growth. Each one contributes to the overall agility of a company’s IT infrastructure in the long term.
Business application companies such as Oracle/PeopleSoft/Siebel and SAP are contributing to the new opportunity of SOAs by supplying a new class of business applications called service-oriented business applications (SOBAs). SOBAs provide extended functionality for use on Web services standards and should contribute significantly to a company’s repository of business services.
Lastly, BPM and BAM are as much methodologies and disciplines as they are products and technologies. So the evolution toward service orientation as an enterprise elevates process thinking, analytics and performance measurement as core competencies to achieve competitive advantage. Accordingly, companies should establish best practices around these disciplines in parallel with implementing the supporting technologies.
Sharing Drivers
SOA, BPM, BAM and BRM share similar investment drivers. For example, regulations such as the Sarbanes-Oxley Act and Basel II require the monitoring of critical business processes and the ability to report abnormal situations in the processes themselves. The total cost of complying and staying in compliance can be reduced by using a combination of these technologies.
Another shared driver is the company’s goal to reduce the overall cost of developing, deploying and maintaining sophisticated business applications. Deploying all of these technologies will maximize the reduction in cost and exceed the cost reduction that any individual technology can deliver.
A third driver concerns a company’s desire to leverage past investments in IT. SOA, BPM and BRM enable companies to reuse existing IT (e.g., logic and data) to create new business applications. Not only does this improve the ROI for IT investments, but it also makes the enterprise more flexible and less dependent on certain ways of doing business because applications can be changed faster and more easily.
Networked Economy
The key to success in the networked economy is the ability to create and modify processes to automate value chains in concert with changing requirements. Faster change management will help enterprises integrate their processes over the Internet so they can achieve greater efficiency, generate more revenue and enter new markets. Adopting SOA, BPM and BRM can streamline a company’s desire to use IT to be more competitive and proactive.
According to Webster’s dictionary, synergism is defined as the “simultaneous action of separate agencies which, together, have greater total effect than the sum of their individual effects.” SOA, BPM, BRM and BAM individually offer benefits, but those benefits can be multiplied by synergistically combining them into an open, sharable software infrastructure. Each one can enhance the returns of the other. As enterprises investigate how to improve their software application infrastructure using SOA principles, they will examine other valuable infrastructure components such as BPM, BRM and BAM.
Interest in service-oriented architecture is growing, but the most effective use of the architecture requires strategic commitment to BPM, BAM and BRM, as well.
SOA Recommendations
- Create a reference architecture to maximize the benefits from SOA. Enterprises should establish a reference architecture that identifies the key complementary technologies in an SOA. These should include BPM, BRM and BAM. Enterprises should take inventory of their current/planned investment in these technologies and inquire what SOA plans their suppliers have to coexist, leverage and exploit the principles embodied in SOA. At a minimum, the BPM, BRM and BAM should articulate their vision and plan to expose their functionality as consumable services.
- Devise an internal central point of contact to facilitate the transformation to a more agile technology infrastructure. Enterprises should establish a permanent competence center within the company to act as a link between business units and application teams. The center should proactively promote the best practices and benefits of advanced technology, provide technical skills, build strategy and deliver measurement models to get the maximum return on investment from adopting application infrastructure technologies.
- Develop a desired library of services with associated characteristics. This library can be assessed to determine which should be targets for BPM, which for BRM and which for BAM.
