Just recently in some meetings in London with a few large banks a common question surfaced around how does one justify and fund SOA projects? With the two banks that I visited this question was raised by architects, IT executives and business stakeholders. In fact in a few cases the question was posed as what is the ROI of SOA.
In my discussion I stressed the importance of not defining projects as SOA projects but instead realizing that SOA principles and technologies is something organizations adopt and apply to projects or initiatives.Stakeholders, executives, organizations must fundamentally decide what business benefits they are going to chase and when. This is business as usual although albeit some organizations are better at this than others.
I articulated that in the hundreds of projects I have been involved with and /or have detailed awareness of the business reasons can fall into one or more of the following: (1) Move to architectures capable of business agility and game changing business models; provide a flexible business model; (2) Reduce cycle times and cost for external business partners; integrate core processes, facilitate flexible dealings with business partners; (3) Increase revenues, create new routes to market, and/or create new value from existing systems; (4) Integrate across the enterprise; integrate historically separate systems; facilitate mergers and acquisitions; (5) Drive down cost and operating expenses, eliminate duplicate systems, build once and leverage, improve time to market; (6) Reduce risk and exposure, improve visibility into business operations, comply with federal mandates; and (7) Facilitate cross business unit or line of business sharing.
I then asked the question is ROI an effective approach for persuading your decision-makers of the value of SOA or you as decision-makers? Often we assume that measuring and demonstrating ROI is a critical success factor but reality is it depends. In some business context ROI is a persuasive tool in others such a focus can be unhealthy and in other cases an ROI approach simply does not fit.
I stressed that even though they are data based, economic models are often influenced by points of view. We all see this in home improvement projects or major home expenditures. Your spouse or partner thinks the ROI is high, your kids if its something they will benefit from think its even higher, and you may have serious doubts.
So more about my discussion of the benefits of SOA in a latter blog but suffice it to say everyone agreed that yes, first and foremost we must decide what benefits we want to chase, define the initiatives and corresponding projects
How do we fund SOA projects?