Software development techniques behind the magic user interface

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Latest Recession Proof Trends in SOA

The next paradigm – multi-enterprise SOA

The concept of a "paradigm shift" was first popularized by Dr. Thomas Kuhn in his book The Structure of Scientific Revolutions. Kuhn described a phenomenon in which one worldview, or paradigm, becomes adopted so widely that its concepts, beliefs, terminology, values and techniques eventually become unexamined assumptions, leading to a condition of "paradigm paralysis" that prevents people from seeing beyond their current mode of thinking. The shift to a new paradigm is triggered only when the prior worldview is stretched beyond its limits and a radical new worldview originally seen as heresy disproves central assumptions of the prior paradigm and is widely adopted (to begin the cycle again).

The concept of service-oriented architecture (SOA) has caused a profound shift in the worlds of business and technology, causing important changes that will stand the test of time in how millions of people think and work. However, I believe the practice of SOA is overdue for a paradigm shift - a shift of focus away from enterprise architectures and applications toward larger, fundamentally different problems that need to be solved in the space between enterprises - a problem/solution domain I call multi-enterprise SOA. Multi-enterprise SOA manages the flow of business processes and data across departmental, organizational, and geo-political boundaries, enabling organizations to rapidly adapt to changing business, technology and legislative environments and facilitating IT-driven growth in a way that enterprise-internal projects generally cannot. This concept of multi-enterprise SOA includes several principles that SOA practitioners may view as heresy.

Heresy #1 - IT Does Not Matter (As Much)
For many organizations, the current practice of SOA is strongly based on the principles and habits of inside-the-enterprise information technology (IT). As practiced in many companies, SOA is, in essence, just another application development and integration tool set. As a result, the most common use of SOA technology is to integrate existing inside-the-enterprise applications.

SOA technology is a fine choice for internal integration projects; I don't mean to dissuade IT from using SOA. The problem is opportunity cost - if an organization focuses its SOA efforts (time, budget, management attention, etc.) inside the enterprise, its opportunities for meaningful innovation will be small compared with what could be accomplished outside the enterprise.

Doing business in the global arena creates a great number of problems and opportunities that can only be solved outside a company's four walls. Trends of industry consolidation (mergers and acquisitions) force companies to be ready to quickly respond to major structural changes in their supply chain, demand chain, or ownership. The complex demands of a global environment - extended supply chains that must be managed, multiple tax and regulatory regimes that must be accommodated, multiple subsidiaries or partners that must be coordinated - all point to the unique requirements of and need to address the multi-enterprise environment.

There are many different multi-enterprise opportunities that can provide substantial return on investment (ROI) if properly addressed. For example, in an AMR Research[1] study that analyzed companies implementing demand-sensing solutions, several companies achieved amazing results:

  • 15% reduction in inventory
  • 17% improvement in perfect order performance
  • 10% higher revenue and 5-7% higher margin than competitors

It's hard to imagine an internal systems integration project that could deliver business results of this magnitude.

According to a recent Gartner report, "by 2011, midsize-to-large companies will at least double the number of multi-enterprise and interoperability projects they're managing and will spend at least 50% more on business-to-business (B2B) projects compared with 2006." Gartner also stated, "Global 2000 companies will double the number of automated multi-enterprise transactions, documents and process-execution events between 2006 and 2011."[2] SOA concepts and technologies can play a crucial role in making these multi-enterprise projects successful and can deliver a much higher ROI than internal systems integration projects.

More Stories By Chris Johnson

Chris Johnson is the vice president of global product management for the Integration Suite product line at Sterling Commerce (an AT&T company).

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