December 17th, 2006
Ten companies where SOA made a difference in 2006
The year 2006 was a busy one for SOA proponents; many service-oriented architectures moved from the pilot stages to live deployments. Many companies have been able to demonstrate value from their SOA efforts; here are some outstanding examples I reported on in this blogsite throughout the year.
Abstracting enterprise information from underlying systems. eBay employs SOA as a software-based integration tier to manage more than two petabytes of data; or 200 times the size of the Library of Congress. eBay is made up of more than six million lines of code and the company rolls out more than 100,000 lines of new code every two weeks. In addition, there are 30,000 software builds per week. "We leverage both component-oriented and service-oriented architecture technologies," says James Barrese, vice president of systems development at eBay. "eBay has built a service architecture and uses it to enable integration across disparate technology stacks. For example, we have enabled open interoperation between our C++ and Java technologies via services."
Reducing application inventories. At the time this report was originally posted last spring, IBM had 77 shareable and reusable services in production — ranging from authentication to order fulfillment — as part of its own service-oriented architecture. Howie Miller, IBM’s vice president for enterprise architecture, said that the most notable outcome of IBM’s internal SOA efforts is the fact that Big Blue was able to reduce its inventory of 16,000 applications in 1998 to 4,000 applications today. The secret sauce to streamlining down to a quarter of its applications was governance, Miller explained. “The governance model helped us achieve that nice statistic. Over the past decade, IBM has trimmed down its own internal portfolio from 16,000 applications to 4,000. It’s how we plan to go from more big integrated spaghetti code applications to more component-based Web services. That same governance model will be part of what gets us moving forward to the SOA-based approach.” Decisions about new technology investments are vetted through an Enterprise Architecture Council and Investment Review Board run by the CIO.
"Rocking the boat," bringing IT closer to the business, and improving business productivity. IT movers and shakers at Wachovia Bank used SOA techniques to "rock the boat" and changed their organization's culture. Wachovia's SOA consists of business services and frameworks available for reuse across the enterprise. Reuse was the driving force behind the project. Susan Certoma, CIO of Wachovia, observed that "each business had been building similar capabilities over and over," which included desktop presentation, data management, workflow management, messaging, and customer information management." One of the most notable improvements gained from the SOA has been in the productivity of the investment brokers. Before, Certoma said, a lot of them were modeling deals in Excel, and it would take anywhere from half an hour to a couple hours.â€Â? One new shared service enabled developers to put together a high-performance modeling application that shaved this modeling time down to minutes. Another business unit was able to develop an equity desktopÂ? application in 90 days that traditionally would have taken six to 12 months to design and build from scratch.
Breaking up inflexible systems that were unresponsive to the business. Harley Davidson’s credit and loan origination process relied on tightly coupled financial systems that were cumbersome to adapt to new marketing programs. That made it difficult to seasonally adjust programs, such as for the annual springtime surge of showroom visitors who have dreams of riding motorcycles on the open road. "The way our systems are very tightly coupled, being very rigid from how they are architected, if we made one change to one of those systems that supports one of those processes, we basically have to touch all of the systems," says Jim Haney, CIO of Harley-Davidson. The answer? Break it all up, he said. "We actually busted apart all of
those systems, and put the SOA in the middle of all that. We loosely coupled these things. Our goal is to be able to change any one of those systems. If we see key indicators in the industry, we want to very quickly put different marketing programs in place, and not have to go and touch and test every single system."
Cutting operational costs. Hewlett Packard implemented an SOA that has seen up to $70 million in savings. HP says the initial paybacks from SOA came through consolidation, reduction of redundancy and reuse across services. Terri Bennett Schoenrock, executive director of SOA services for HP, said at least $1 million of the savings happened right out of the starting gate — "The cost savings actually start on implementation. When we look at where we measured return on investments; return on investment actually happened on go-live with our own implementation of our e-business center. Return on investment starts Quarter 1. We doubled our revenues. We halved our transaction processing requirements. We really recognized improvements right away. We achieved $1 million in cost reduction from fraud the first year we went live."
Delivering new products and services. Ameriprise Financial,which has had an SOA effort underway since 1999, has been able to save millions of dollars in development costs through reuse of crucial business services. Tracy Legrand, chief architect for Ameriprise, said his firm was seeing at least $10 million in savings "in things around time to market, and how quickly we could deliver new business products or services. We had savings around avoiding duplicate build functions. What tends to happen in large companies is that's its easier often to just think about building a new service that does 80 percent of the same thing as an existing service."
Handling growing transaction loads as simply as possible. Amazon, the online retailer, needed a flexible architecture to handle what is now a base of 60 million customers and one million partners. The company orginally used a mainframe, but it wasn't enough, said Werner Vogels, vice president of worldwide architecture and CTO at Amazon. The solution we arrived at within the next couple of years was to build Web services that could form a transaction layer to handle online business applications, while shielding the retailer’s databases. "We were doing SOA before it was a buzzword," Vogels said. "Service orientation works. We never could have built Amazon's platform without service orientation." Vogels said he also admonishes Amazon developers to keep services as simple as possible, and don’t get attached to any one technology or standard.
Enabling the "separation of powers" between corporate, divisions, and departments. It would be impossible and dangerous to manage a nation of 300 million citizens with a single government entity, and likewise, just as difficult to manage the IT of a company with 300,000-plus employees and more than $1 billion in revenues every 11 days, not too mention what is perhaps the world's largest technology shops. Skip Snow, senior vice president and chief SOA architect for Citigroup, said the company's SOA governance structure is federated in nature, with a "separation of powers" similar to the way the US federal government is structured. That includes an “executive branch” (IT) oversees operational aspects, as well as development and design; a legislative branch” (executive management and board of directors) establishes the goals and directions of SOA efforts; and a “judicial branch” (enterprise architectural boards) that deals with conflict resolution and compliance audits. In addition, Snow added, Citigroup’s SOA initiatives are divided along a separation of powers between the federal (enterprise) level, state (divisional) level, county (line of business), and municipal (departmental) level.
Moving business rules out of applications. OnStar, the vehicle communications platform, was moving its software business rules, now embedded in applications, to a middleware layer of reusable components. Kathy Kay, OnStar director of application development and support for OnStar, is quoted as saying that the strategy "will allow us to reuse different functions and business processes more easily. We will pull out functions to create separate processes."The company said at least seven or eight application platforms will be moved to the SOA middleware layer, starting with Emergency Services, Vehicle Services, Business Objects and Billing. Such applications help handle service calls and provide remote vehicle diagnostics.
Making movies. Well, not directly use SOA to make movies, but to help run the companies that make movies. DreamWorks Animation SKG, producer of the Shrek trilogy (number 3 is due out in 2007), made a transition to SOA to simplify and consolidate key business operations. The company took a smelly green monster of an IT infrastructure — in the formof 12 legacy ERP applications running on Sun servers — and made it a bit more handsome, in the form of Linux servers, Oracle databases, and JBoss middleware. Abe Wong, head of IT for DreamWorks Animation, cites the reusability ofSOA-based components as the greatest advantage coming out of the project. "We can increase the speed to write and deploy new applications with many of the reusable components that’s now part of the architecture," he said. "For example, we reused the same employee authentication SOA component for all 12 applications we developed." The SOA model also supports company directories, employee bulletin boards, vacation requests, and cafeteria menus. It also supports a new copyright-tracking application with authorization and authentication features for incoming film scripts.
Some people accuse SOA of being a fairy tale, but there’s hope, no matter how ugly your technology is.
Joe McKendrick is an author and consultant with deep knowledge and insights regarding trends and developments in the technology industry. See his full profile and disclosure of his industry affiliations.
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| 12/19/06
