From IBM Vice President in Charge of SOA and WebSphere Strategy

Sandy Carter

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Two SOA Projects That Can Pay For Themselves in Six Months

Service oriented architecture (SOA) could revolutionize the way we think about IT

Service oriented architecture (SOA) could revolutionize the way we think about IT. Why is that possible? Because SOA finally has the potential to make the concept of reuse real. Companies have been talking about reuse for years, but have never been able to transform that talk into full-scale reality. Now, you might be asking, "How can SOA succeed where previous approaches have failed?" Because the standards, best practices and governance models have finally matured to the point where reuse can actually work.

SOA is by definition, an architecture. At the same time, SOA is an approach to IT that can help solve immediate business challenges. And SOA can begin paying for itself quickly. In fact, the number of opportunities for quick return on investment can be surprising. For example, many businesses are unaware of the number of duplicate processes that occur in separate departments and applications - and how much these duplicate processes are costing them. When you examine the costs and lost revenue attributable to redundant function and duplicated effort, you begin to see the value of centralized services over having to manage multiple competing and overlapping functions.

Business has gotten increasingly complex over the past couple of decades. Factors such as mergers, regulations, global competition, outsourcing and partnering have resulted in a massive increase in the number of applications any given company may use. Even if these applications were developed in the context of a logical master plan, the situation could be difficult. But it's often the case that these applications were built with little knowledge of the other applications with which they would be required to share information in the future. As a result, many companies are trying to maintain IT systems that coexist, but are not integrated.

SOA offers an approach that can be incrementally adopted as organizations start the necessary but daunting task of bringing order to what might have become chaos. The projects outlined in the following sections have helped many companies move further along the SOA adoption path. But just as important, these projects have produced clear and demonstrable business results in just a few months.

As companies use SOA to provide standardized services and business processes, the value of IT grows exponentially. When there is only one view of each customer, supplier and business partner, and only one view of each customer, supplier and business partner, and only one business process for each specific business need, organizations can run more smoothly and put more of their energy into growing their businesses rather than taming their IT infrastructures. In the past, the prevailing belief was that the value of reuse was in eliminating duplicate development and maintenance. Now, however, it is widely accepted that the true value of reuse is in the standardization of business processes. The following three projects help demonstrate how organizations have used SOA to their immediate advantage, while at the same time laying the groundwork for more flexible IT systems that can provide competitive advantage in the years ahead.

Project 1: SOA and the Retail Industry
This major retailer has estimated the revenue impact of its SOA project at $20 million, consisted of creating a centralized service used as a single source of information for delivery-date commitments.

Many businesses can suffer in the marketplace because they do not provide the necessary means to effectively manage customer expectations. Consider what can happen when a service company makes an appointment to send a service representative to a customer's home to repair a problem. When making the appointment, the company can commit only to having the representative arrive at any time during an eight-hour timeframe. Then, after the customer has waited at home for an entire day, the company calls to inform the customer that the service representative cannot make the appointment and needs to reschedule. This ability to manage customer expectations can result in alienating customers - and even in losing some customers to competitors. This concern transcends industries and is important to any organization that depends on the quality of its customer service to maintain and grow its business.

In the retail industry, successful retailers are those who can manage, meet and exceed customer expectations. Whether it is the quality of the merchandise, maintaining necessary inventory levels or fulfilling orders expeditiously - and is expected to meet high expectations. Delivery dates must be met, and if a date has changed, the customer must be informed, regardless of who is at fault. This issue prompted a retailer to implement an IBM-based SOA.

The retailer's fulfillment chain comprised multiple systems - each of which could update the promised delivery date for an order. When someone changed a delivery date in one of the many fulfillment applications, the information wasn't consistently updated in the order-processing system. As a result, when a delivery date was adjusted, the customer was frequently not properly informed. Because these disparate systems didn't reliably communicate these updates to each other, customer representatives had to spend valuable time checking multiple order-management systems to try to answer customer queries or resolve a complaint when an order did not arrive on the expected day. The long wait for information and the inability to keep the customer informed of changes frustrated both customers and employees.

The solution? A centralized delivery-date service. Now, when a delivery date is changed, the fulfillment system sends a delivery-change notification to this event-driven service through the retailer's enterprise service bus (ESB). As a result, the order system database - and any other system that subscribes to this service - is immediately updated. This capability allows customer service representatives to respond to and address customer issues more quickly and accurately.

The retailer's delivery-date service was a SOAP over HTTP service managed by an ESB. The existing IBM WebSphere MQ interface on the fulfillment system was routed to call the new service through the ESB. To support the protocol transformation of WebSphere MQ to SOAP over HTTP, a mediation was developed that sits in front of the service implementation. All requests from the fulfillment system's WebSphere MQ interface are routed to this mediation where the WebSphere MQ to SOAP transformation occurs. The SOAP request is then forwarded to the delivery-date service. The product used to develop the ESB provides all of the administrative support necessary to enforce the routing of these WebSphere MQ to SOAP over HTTP services, avoiding the need to do this routing programmatically and minimizing development time and resources. The design also enables publish-subscribe capabilities where the delivery-date service is published on the ESB. Through these publish-subscribe capabilities, other systems within the retailer can subscribe to the service so that they are also notified of the delivery date change, encouraging further component reuse. This publish-subscribe model also enables all dependent systems to be notified simultaneously.

This is a simple SOA project. The total effort to create two centralized services and build an ESB required four developers for four months. But the impact to the business is extensive. Customers are no longer disappointed with missed delivery dates and contradictory delivery information. The number of cancelled orders has declined, as have the number of delivery attempts that are unsuccessful due to scheduling confusion. Even more important, the retailer is profiting from the repeat business of customers who value the company's ability to meet its delivery commitments.

Project 2: Financial Services SOA
Financial services organizations all over the world are struggling to reduce costs and increase customer satisfaction, while at the same time dealing with an increasingly complex array of security concerns. These competing challenges often result in situations where companies must choose to spend more or risk customer dissatisfaction. The financial services organization discussed in this scenario used SOA to help lower costs and improve customer satisfaction, all without compromising security.

A common thread among all industries is the movement to automate processes that are traditionally labor- and cost-intensive. Often the most expensive processes are those that are required to handle the exceptions in the everyday business. Whether it concerns reverse logistics within a supply chain or billing disputes for services rendered, handling such exceptions can be expensive because of the enormous amount of human intervention that is often required.

This project enabled a financial services organization to significantly decrease the labor-intensive processes and high costs associated with disputed transactions. Automating this process by creating a centralized service helped enable the organization to realize estimated cost savings of more than $200 million per year. It achieved these savings by replacing a manual and archaic set of processes with an automated service that was surprisingly simple to implement.

More Stories By Sandy Carter

Sandy Carter, vice president in charge of IBM's SOA and WebSphere strategy is a graduate of Duke University with a B.S. in Computer Science and Math and an M.B.A from Harvard University. Her professional associations include Member and Best Speaker Award, the Marketing Focus Advisory Council; Board Member of the Grace Hopper Industry Advisory Committee; and membership in Chief Marketing Officer (CMO) Inner Circle.

She recently won an Award from AIT United Nations for helping developing countries, is an active member of the Women in Technology Group, and the Lead IBM Partnership Executive at Duke University.

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Most Recent Comments
j j 09/28/06 02:31:49 PM EDT

Service oriented architecture (SOA) could revolutionize the way we think about IT. Why is that possible? Because SOA finally has the potential to make the concept of reuse real. Companies have been talking about reuse for years, but have never been able to transform that talk into full-scale reality. Now, you might be asking, 'How can SOA succeed where previous approaches have failed?' Because the standards, best practices and governance models have finally matured to the point where reuse can actually work.

j j 09/28/06 10:57:18 AM EDT

Service oriented architecture (SOA) could revolutionize the way we think about IT. Why is that possible? Because SOA finally has the potential to make the concept of reuse real. Companies have been talking about reuse for years, but have never been able to transform that talk into full-scale reality. Now, you might be asking, 'How can SOA succeed where previous approaches have failed?' Because the standards, best practices and governance models have finally matured to the point where reuse can actually work.

SYS-CON Australia News Desk 04/21/06 11:51:54 AM EDT

Service oriented architecture (SOA) could revolutionize the way we think about IT. Why is that possible? Because SOA finally has the potential to make the concept of reuse real. Companies have been talking about reuse for years, but have never been able to transform that talk into full-scale reality. Now, you might be asking, 'How can SOA succeed where previous approaches have failed?' Because the standards, best practices and governance models have finally matured to the point where reuse can actually work.

SYS-CON India News Desk 04/21/06 11:15:09 AM EDT

Service oriented architecture (SOA) could revolutionize the way we think about IT. Why is that possible? Because SOA finally has the potential to make the concept of reuse real. Companies have been talking about reuse for years, but have never been able to transform that talk into full-scale reality. Now, you might be asking, 'How can SOA succeed where previous approaches have failed?' Because the standards, best practices and governance models have finally matured to the point where reuse can actually work.