Business Transformation in Action

Joe McKendrick

Roundtable: How the Economy Impacted SOA in 2009

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Predictions of the collapse of service oriented architecture endeavors in the recent economic slump did not pan out -- companies remained committed to moving forward with SOA. Now, with a recovery shaping up, SOA may play a key role in strengthening companies for the next growth phase. The challenge will be effectively governing the way SOA evolves.

At the recent SOA in Action conference, I had the opportunity to join Miko Matsumura, vice president and deputy chief technology officer for Software AG, and John Favazza, vice president of research and development for WebLayers, Inc., in a scintillating and informative roundtable discussion about the role SOA plays in business growth, and how how effective governance can make this happen. (Listen to the audio Webcast here, or read the full transcript here.)

John Favazza said that there has been some moderation of SOA efforts, but no one engaged in cutbacks of any kind over the past year. "We've seen [customers] maybe slow down the projects they are working on, so they push out their timetables," he related.

Companies seemed to take two approaches to SOA during the economic slowdown, he oberved.  "Some are locking things down and becoming more tactical," he said. "Then we have this other group of customers, a smaller group, who actually used this downturn to focus on strategic initiatives. Their plan was when the economy starts ticking back, they're going to be well prepared."

Miko Matsumura said his company saw the same thing over the past year, and echoed the findings of Forrester analyst and SOA in Action keynote speaker Randy Heffner, who observed that only one percent of companies in a Forrester survey indicated they were pulling back from SOA altogether. 

Miko also observed that merger and acquisition challenges, along with consolidation, have been driving a lot of SOA business cases over the past year. "We're seeing a lot of market consolidation, IT integration efforts consolidation and removal of redundancies -- what I would call size and scale benefits," he related. In turn, Miko reported seeing more investment in SOA strategies to help prepare for the next economic upswing. "We see people who are investing in expanding their capacities and capabilities going forward."

Miko also pointed out that as we enter a growth phase, governance will become critical as companies seek to apply SOA approaches to their siloed organizations and siloed technology infrastructures. "The thing that I think is really important from a growth perspective is this notion of complex demand, as an organization grows to a significant size," he said. "They experience market fragmentation, they have to expand to new customers, they have to start to verticalize, geographically localize, and offer more niche versions of products and services."

In turn, this leads to more complex consumption of IT capabilities, he continued. "It means you have more channels. You have more leverage. more reach. and more mass customization. You need capabilities to serve a much larger number of potential customer silos, which is part of the fragmentation that comes with the size of enterprise."

This complexity will demand more service orientation, and more comprehensive governance of resulting services. John added that "as the economy grows, there's going to be more pressure on the IT organizations that are there today. We're seeing a lot of them become more distributed. The reason we think that governance is so important is now there are teams all over the world, and there are all these technologies. The governance needs to be automated all these different groups to make sure the policy enforcement is done more appropriately."

(Listen to the audio Webcast here, or read the full transcript here.)

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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