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Wall Street & Technology has a good article on SOA for Business Transformation in banking.  The article speaks to SOA implementations at Wachovia and Bank of America, and is supplemented by commentary from Microsoft, Tower Group and Butler Group. 

Below are some excerpts of interest that align with findings from the SOA Consortium's Executive Summits and (of course) my own soapbox.  I skipped the detailed technology sections, because that's the easy part. (The headings and emphasis are mine)

Business-Driven SOA

"Charged with differentiating the bank and growing its business in the face of larger-scale competitors, Wachovia's CIB division had to map out where its technology needed to be to match where it wanted the business to go, relates Bishop."

"As Wachovia and other banks are discovering, leveraging SOA's loosely coupled services to overcome siloed technology has the potential to completely change a financial institution."

"Approaching SOA with clear business goals and realistic expectations may be the most important step a bank can take, Wachovia's Bishop says. Although Certoma set the ultimate goal for the bank's SOA transformation as business differentiation, she also outlined more-specific subsets of the project, including decreased time to market and cost of delivery for new products, Bishop points out."

SOA is Not a Slam Dunk

"Yet the road to a full SOA implementation is marred with potholes and roadblocks, and according to experts, it's important for financial institutions to be aware of the key decisions they face about services, technology and governance."

SOA Infrastructure Should be Flexible

""Wachovia required that all its technology be componentized and capable of being extracted, the bank's Bishop says. Wachovia didn't want any technology built to a specific language or a specific format. "This is where a lot of SOA strategies fall short," Bishop asserts. "A lot of people in the past would build business logic and need to inherit that it was running on a Java container. We didn't want that. We wanted to reuse so that it could be moved about in different ways." According to Bishop, he bought a lot of best-of-breed technologies that are open standards-based and pluggable."

Governance and Portfolio Management -- People, Process, Tools

"To manage business components and services along with infrastructure services and components, Wachovia's Bishop relates, the bank's CIB division created a portfolio management function, in terms of personnel and tools, to govern the project and track the usage of those elements. The first step was to create an open source community, which set specific rules in terms of what the CIB's business units could contribute or use, according to Bishop. The second step was to establish peer groups across the various applications to understand who built what, how it was being used, who reused what and how it was reused, he adds. The third part of the governance plan included mandates that each development team contribute and/or reuse various components of the SOA as part of their annual objectives. And finally, Bishop notes, the CIB division created a steering committee that prioritized projects.

Bank of America delegated governance for SOA to the four CIOs within the organization, the bank's Conroy says... While Conroy says he has a pretty tight grip on technology and product governance, he's still trying to "work out the kinks" when it comes to governance over services. Service-level agreements across CIO units are the next hurdle, Conroy says, especially figuring out how to price services and allocate costs. "The two things that make SOA hard to do in a big group are governance -- who can generate the requirements and decide what your billing is -- and who pays for it," he contends."

Business and IT Collaboration Required

"An SOA implementation will bring about many changes in the financial institution, including new partnerships between business and IT, according to TowerGroup, which asserts that such partnerships are integral to overcoming the challenge of breaking down the walls between businesses in the bank."

"Bishop offers advice for banks just starting on their SOA journey. "You've got to focus," he says. "You've got to be committed. You need to do it in incremental building blocks. SOA needs to be business-aligned and needs to have a top-down map and a bottom-up approach." And bank executives need to know what they're getting into: "It's a full-time part-time job for even the highest-ranking executives," Bishop says."

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Posted by: James Taylor at May 8, 2007 10:55 AM | Permalink