In 2003, the IT world was shocked by the Harvard Business Review article, "IT
Doesn't Matter." The premise of Nicholas G. Carr's article was not that
we can live without IT, but rather that IT is not a competitive advantage. Every
company has IT, so IT isn't a competitive differentiator.
The purpose of this article is to demonstrate how service-oriented architecture
(SOA) can be a strategic IT differentiator for your company. I will demonstrate
at a high level the goals of SOA and how it can create leverage to unlock knowledge.
This unlocking of knowledge can lead to strategic advantages for your company.
In reviewing Carr's article about IT not being a competitive differentiator,
we know that those companies not investing in IT at all are at a competitive
disadvantage. To stop investment in IT means a loss of efficiency and therefore
competitiveness. However, is it really true that investing in IT is not advantageous?
Are there investments in IT that other companies are not making? Are there investments
in IT that your company is making that other companies aren't? Or, are all companies
investing in the same areas -- hence the lack of competitive advantage?
Are all companies using IT generically enough that IT really doesn't matter?
The professional CIO and CTO know by experience that IT does matter. However,
I would guess it is likely true that many companies have fallen into the rut
of IT management. If processes are working to a large extent, why rock the boat
with innovation or change? We have bigger fish to fry and other priorities,
such as keeping IT costs down and dealing efficiently with internal customer
Companies that treat IT as a cost center are demonstrating that they view IT
as a commodity. They are in the same boat as the "IT Doesn't Matter"
camp. There is little strategic differentiation going on here. On the other
hand, companies that view IT as a strategic tool to leverage their differentiation
will realize significant return on investment.
The reality is that the strategic use of IT does matter. The proper use and
investment in IT to reduce costs, streamline employee work, improve employee
collaboration and automate processes is amazingly underutilized and underappreciated.
Even with the many disparate IT software systems in place today, IT is still
not fully taken advantage of.
In Africa, farmers will actually till the land by hand even though cows are
grazing nearby. The cultural idea is that "farmers work for cows, not cows
for farmers." The parallel is in use today. We work for computers, by using
it as a glorified typewriter and electronic filing cabinet. The computer is
used like another tool that revolves around a person doing a business process.
Why don't we make computers do the work? They are certainly capable!
Why do so many things in our companies need to be handled by humans? Is there
anything we can automate? Is there anything our employees constantly do over
and over again? Can this be automated? Can we remove the person from the business
process altogether? IT can then produce significant competitive advantage as
it is leveraged in this way.
The SOA paradigm is a significant piece of the IT leverage puzzle. It can be
a differentiator in a company's strategic competitive IT advantage. The overarching
goal of SOA is to act as a common broker and communicator of business processes.
We will discuss two forms of leverage here that SOA brings to the table: the
leverage for developers, and the leverage realized by companies that currently
have silos of business processes and data that could be tapped. Let us first
discuss the leverage realized to software developers and how that creates efficiencies
and IT savings.
SOA provides leverage for a company's business processes by allowing software
developers to interact with a single software source for the company's business
rules and data. Such services can even tie in disparate software systems to
implement a single business process. Why is this significant and why does it
Specifically, the business rules and processes of a company are the hardest
to pin down in terms of writing software. Business rules and processes can change
and should change over time to maintain competitiveness and to respond to market
or regulatory needs. As such, a single software source for these changes means
that all the many different software systems that use these business rules will
automatically reflect these changes as the rules are changed in this one place.
Further, because business processes are now defined and programmed against
one software source, software developers will not need to worry about changing
code in other systems. Software developers implementing newer software systems
will not need to worry about repeating the wheel in terms of business rules.
The leverage from this approach is to free up programmer resources to work on
higher level tasks.
This avoids the common issue of new programmers needing to figure out all the
business rules before starting a new software project. The leverage here is
significant because the hardest part of programming is coding for the business
rules rather than writing the software that interacts with these business rules.
This approach creates a strategic advantage going forward, in that changes
to business rules will be easier to implement, less costly to implement, and
strategically more advantageous. The ideas and resources available for additional
software built on top of existing business rules can lead strategically to higher
level slicing-and-dicing of data, higher level and transparent views of the
data and business processes.
This can lead to strategic advantages by leveraging the knowledge you have
inside your organization and making it available to sophisticated and customized
views and processes built on top of this -- unlocking this knowledge.
As SOA is implemented across an organization, the benefits from taking information
and rules currently stored in software silos is incredibly understated. The
ability to make data and business rules accessible to other departments in one's
organization and to other types of software in an organization can create breakthrough
For example, in many organizations marketing is cut off from sales, in such
a way that sales do not know what marketing does for them. In turn, marketing
may vaguely be aware of the results of their marketing campaigns. If marketers
tracked and shared their campaigns with sales, and if sales in turn shared information
on leads and the resultant sales directly tied to such campaigns, then marketers
could fine-tune their campaigns.
Sales could then benefit directly from this due to more efficient and effective
campaigns on their behalf. There are customer relationship management systems
that do this, but the point here is that the sharing of information between
departments can create efficiencies.
The sharing of information that SOA provides can likewise create efficiencies
between departments -- and it may not yet be known by how much. In fact, it
may be that because information and processes have always been in silos and
hard to get at, we've never even had the idea to determine what benefit sharing
it could have.
It is up to you as a manager of IT to determine and ascertain the unique benefits
SOA can bring to the table. IT combined with SOA can unlock your knowledge silos.
SOA could be one of the keys that brings strategic competitive advantage to
About the Author
Shawn Arney has been a software developer since high school. His interest in computers and programming began in boarding school in the Philippines. Besides knowing several computer languages, Arney speaks several foreign languages including Filipino Visaya, Tagalog and ancient Greek.
Arney attended computer science courses at California State University, Chico. He received his Bachelor of Science in Applied Economics at the University of San Francisco.
Arney has been involved with Microsoft programming since 1996. As a software developer and consultant, he has worked with both small and Fortune 500 companies. Arney has three Dynamics CRM certifications from Microsoft and is a Microsoft Certified Solution Developer. His recent book on Dynamics CRM for the business professional is currently being edited and will be released in August. Arney makes his home with his wife and three young children in the Rocky Mountains of Colorado.
Arney Consulting is a Microsoft Gold Certified Partner. Arney Consulting enables companies to increase sales and margins by customizing software to streamline one's business. Arney Consulting specializes in customizing internet software, business portals, mobile phone software, and Microsoft Dynamics CRM. Arney Consulting can work with customers anywhere. We have offices in Colorado Springs, Denver, and San Diego. Please visit us at www.ArneyConsulting.com.