Business Transformation in Action

There has consistently been debate about how the funding for SOA efforts should come about. There are those that advocate a centralized enterprise source for funding SOA project, while others propose chargeback arrangements for service similar to traditional IT chargeback mechanisms in place at many companies.

Of course, the onus for laying out initial funding for SOA is on the first deployer, which makes availability to other business units awkward. Who buys the first round of SOA? Should the local department bear the full freight and risk?

Leo Shuster, a contributor to SOA Magazine, took up the question of SOA funding in his latest article on SOA project management, and urges enterprises to look at a hybrid centralized-local model for paying for SOA efforts.

The problem with localized or departmental funding, he says, is that SOA projects often require resources that are outside the project's scope -- especially since enterprise services are intended to serve a broader roadmap.

A central approach to SOA funding is best, but with local control, Shuster writes. Unless there is extermely strong governance and control mechanisms, a purely centralized approach would be too costly:

"Providing supplementary funding to projects building services is probably the most realistic approach. A central fund needs to be established to cover the efforts falling outside of the project scope. Since shared services would typically incorporate other projects' and enterprise requirements, the actual cost ends up being higher than what projects budgeted for their needs. Thus, the easiest way to distribute supplementary funding is to allow the projects to pay for functionality already included in their budgets and cover all the additional costs through the central fund."

Centralized support to underwrite local service development efforts makes a lot of sense, and helps keep SOA efforts within a broader enterrpise context -- one of the biggest challenges with SOA work these days.