Business Transformation in Action

Joe McKendrick

SOA is as Good as You Measure It

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SOA has been taking a beating as of late because there have been major concerns about its ability to deliver ROI. But ROI is only possible if SOA-based efforts are properly measured.

Two new reports, published here at ebizQ, discuss the ways SOA needs to be measured.

Dr. Jerry Smith, CTO of Symphony Services, observes that metrics help provide justification for SOA-based projects. "in order to build your justification for moving forward with your SOA project, you need to develop a set of metrics that are aligned with the business objectives of the company, not traditional software development metrics (those are still important, but not for convincing your CFO that you should get the funding for the resources you need). And remember, transparency and accountability are the watchwords of today's political and economic reality, so be prepared to continuously measure and report progress against these metrics over time."

Mark Little CTO of Red Hat, advises that enterprises put "a framework in place that allows policies and Service Level Agreements (SLAs) to be defined, enforced and audited across multiple security and identity domains. Such a framework must be able to define policies for individual services and then either enforce them or provide means by which they can be managed and enforced by some other component within SOA."

"However, just as SOA is not simply a technology, governance is not something that has to be implemented by software. Of course it can help, but it's neither necessary nor sufficient to gain successful governance of your SOA deployments. In fact, there are certain metrics associated with SOA governance that software would find difficult or impossible to measure. So what sorts of metrics should we be interested in monitoring?"

Some important metrics identified by Smith and Little:

Service Vitality Index: "The three most commonly used ways to measure development cost and impact -- percent of sales, R&D headcount and number of patents acquired -- are flawed and proven ineffective in measuring the value of innovation," Smith says."The best, most accurate and effective way to measure your SOA investment is by using the Service Vitality Index, which tracks the amount of revenue from new services over the last 12 months as a proportion of total service revenue. This will give you a basis for continuing to find additional measurement tools for your SOA implementation -- and this is critical in an economic environment where every dollar spent is so closely scrutinized."

Return on Investment (ROI) Per Service: "What complicates this metric is that some services may only perform a business task in conjunction with others, such that the ROI for a service should actually be measured across the composition," says Little. "Note that when measuring ROI in relation to SOA, it does not necessarily mean that a specific service must generate revenue."

Number of New Services Generated and Used as a Percentage of Total Services:
"Often within organizations with poor SOA governance, development teams unnecessarily create new services when an existing or slightly modified service is perfectly feasible," Smith explains. "This process not only drives up total cost of service development and maintenance, but also reduces the average revenue per service -- two CFO-oriented metrics trending in the wrong direction. In order to maximize the investment any organization has already made in SOA, it's imperative to determine how you may reuse existing services to ensure optimal productivity."

Service inter-dependencies: "We also require is a measure of the inter-dependencies of these services such that we can measure how much of a problem it will cause to take a specific service out of commission," Little says. "For example, services that are weakly dependent will be less likely to notice when one of them is taken down, whereas closely dependent services may need to be considered as a single logical unit, in that taking one down is equivalent to taking them all down."

3 Comments

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Return on Investment (ROI) Per Service ...


That is a part with which I have some difficulties. I do not easily see how you go about this in the planing or arbitration process.

The other day took Oracle SOA certification and I must say that part was completely closed to me. They were asking for choices based out of numbers I must say I could not match to the situation. So, after, I went out to seek light on the subject, but I am still in the dark.

Cheers,

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Good metrics to measure ROI ..

Someone once said and I kind of support the fact that SOA ROI does not come immediately or in the first project itself. It does not even come in the second project. Gradually as you extend SOA across applications and your common data objects become really "common" the returns will start flowing in.

http://www.infosysblogs.com/oracle/2009/05/top_down_or_bottom_up_soa.html

The other day took Oracle SOA certification and I must say that part was completely closed to me

In this blog (formerly known as "SOA in Action"), Joe McKendrick examines how BPM and related business and IT approaches can promote business transformation.

Joe McKendrick

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

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