BI in Action

Michael Dortch

The Big Mash-Up, Continued: What IBM and its Friends Know about SOA Can Help You with BI - and More...

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Earlier today, I listened to a live Webcast hosted by IBM's service-oriented architecture (SOA) team. The talk featured Sandy Carter and Manoj Saxena of IBM, user Ralph Warchol, VP and CIO of Clayton Homes, and James Governor of RedMonk, my (and my wife's) second-favorite IT industry analyst on the planet. (Aw, c'mon - if we don't like ourselves, who's going to, right?)

The title of the presentation was "5 Ways to Work Smarter and Take Out Costs with Smart SOA." However, I heard some things I thought you would find useful in pursuing or considering business intelligence (BI), business process management (BPM), cloud computing or software as a service (SaaS), or almost any other IT initiative supposedly aligned with business strategies and goals. Or, put another way, any other element of what I've been calling "The Big Mash-Up." Herewith, a summary, framed by recommendations from yours truly. You're welcome, of course.

Find a Business Driver - Cost Reduction, Perhaps. Ms. Carter cited a Forrester Research study that found that 76% of IT money is spent on maintenance, leaving only 24% - less than one dollar out of every four - for initiatives focused on business or technology improvements. Sigh.

Needless to say, there's a growing focus on "cost optimization" out there in the user universe, Ms. Carter said. (This is just a continuation of a trend started roughly about 10 minutes after senior business decision-makers realized just how much IT was costing them. The trend is best encapsulated by the observation that at many user organizations, "TCO" no longer stands for "total cost of ownership," but now stands for "take costs out." The "now" at the end is silent.)

Be Prepared to Market, Sell, and Evangelize Stakeholders. Mr. Warchol cited business stakeholder buy-in as the number-one factor in effective deployment of BPM and SOA solutions at his company, a major homebuilder. Another primary success factor was the ability to identify, pursue, and manage process change. Process modeling helped a lot.

Measure to Manage, Manage to Succeed. Mr. Saxena said that key performance indicators (KPIs) are not enough to measure the value of SOA efforts. KPIs such as costs and efficiencies only measure how well you're doing what you already do. You also need what leading indicators, such as time to market and time to respond to market shifts. Mr Saxena calls these key agility indicators or KAIs. Both can play important roles in making better decisions about how well you're doing and where SOA or other technological changes might best to help you improve.

Look at the Big Picture. Mr. Saxena also said that it helps to take a three-tier view of SOA - business, applications/services, and infrastructure. Having a good set of tools and methods for documenting requirements at all three layers helps to manage change, especially as people move on, in, up, and out. And both KPIs and KAIs can help to get and keep a handle on those requirements.

Strategic IT is a Cultural Phenomenon. Mr. Governor described SOA as a language with which the business can communicate more effectively to those managing IT and systems. This, in turn, helps to keep IT and the business aligned and responsive in the face of rapid and significant change. (At least, that's how I took it; I'm sure James will correct me if I got it wrong.)

When done right, SOAs (Mr. Governor said) and other strategic IT initiatives (I say) enable what Stewart Brand refers to as "pace layering," allowing various elements of the IT and business infrastructures to evolve at their own optimal paces. With a building, the foundation, electrical system, plumbing, and other infrastructure elements evolve and get updated on different cycles. The same is often true with the multiple, conjoined layers defining business and IT infrastructures. In addition, every new initiative will raise cultural and political issues and challenges. Mr. Governor's advice: pick a canonical "core service" with which to begin, to get everyone's biases and agendas out in the open around something that matters.

The Key Take-Aways:

The biggest benefits of SOA, BI, BPM, SaaS, or any other strategic, business-driven IT initiative may be its ability to help companies to identify, prioritize, rationalize, make consistent, and reuse the processes and rules by which the business makes decisions and effects change.

The biggest challenges to the success of any such initiative are often cultural and political. As such pursuits expose weaknesses and gaps in incumbent processes, those who perceive themselves as owners of those processes may resist or object. And as successful pursuits bring improvements to particular areas, those in other areas may perceive the prospect of similarly significant change to "their" areas as threatening.

Yeah, it's hard work. But if you want to run a truly agile, intelligent, and successful business, it's work worth doing. And the alternatives are harder, I promise. Meanwhile, you can get to the replay of the IBM keynote event at http://tinyurl.com/bv3489. Registration is required, and free. Yes, I think it's that potentially valuable - whether you're pursuing SOA or not.

Globalization, shrinking business cycles, and increasing competitive pressures are placing demands on business managers to make faster and better decisions. Managers require both real-time visibility into their business operations and sophisticated analytical tools to help them navigate the increasingly fast paced and complex business environment.

Michael Dortch

Michael Dortch is a veteran information entrepreneur and information technology (IT) industry analyst, consultant, speaker, writer, evangelist and provocateur. He has been striving to empower buyers, sellers and users of IT solutions since 1979. Seriously! ;-)

Joe McKendrick

Joe McKendrick is an author and independent analyst who tracks the impact of information technology on management and markets. View more

Madan Sheina

Madan Sheina is principal analyst within Ovum's Software Applications group and is based in Northern California.

Madan has fifteen years' experience working in the IT industry both as an analyst and a journalist. His research covers a range of information management technologies, with a sharp focus on business intelligence, knowledge management and data integration software.

Madan is well respected in the IT industry for his clear, incisive and no-nonsense analysis style. He has advised leading ISVs on market positioning and product development strategy, IT users on product evaluation and selection, and the financial investment community on technology trends. View more

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