Study says SOAs are flexible enough to enhance both the top and bottom line

By focusing on IT cost savings as the justification for service-oriented architecture (SOA) projects, IT managers may be overlooking another potential benefit: increased sales.

That's the conclusion of a study conducted by Wellesley, Mass.-based Nucleus Research and enterprise integration vendor webMethods.

Nucleus looked at the benefits derived from using webMethods Fabric, an SOA-based platform for creating and managing business processes that require interaction between disparate applications.

An SOA is a technology infrastructure in which software applications have been broken into modular components—called services—and placed in a repository where they can be accessed either by users or other services. A key feature of an SOA is the ability to reuse services in multiple business processes.

The Nucleus study found that service reuse cuts programming times by 25 percent to 45 percent. In addition, an SOA can make a company agile enough to change business processes in response to market conditions or customer demand.

For example, one technology distributor used webMethods Fabric to more quickly integrate with trading partner systems, which in turn contributed to $200 million in new high-margin business.

Rick Clements, a director with webMethods, says the study proves SOA is not just a new form of technology. "It's a strategy for business transformation," he declares.

David O'Connell, a senior analyst with Nucleus, says companies should strive for revenue-enhancing benefits when deploying an SOA, but should expect the initial benefits to come primarily in the form of cost savings. "You first need to prove you can save money by improving internal processes," he says. "Then you can move on to the fun stuff, such as integrating with trading-partner systems or facilitating new revenue streams."

O'Connell and Clements agree that phasing in an SOA is a good idea, tackling shorter projects first, but looking to build on existing services. "It's important to have a number of projects with overlaps or intersections to drive reuse," says O'Connell.

Users don't have to limit themselves to a single vendor as their SOAs expand. It's important to know that vendors often specialize in working with certain types of applications; so a single vendor may not have the necessary expertise to assist on every project.

"The beauty of SOA is, at least in theory, you can intermingle infrastructures from any number of vendors," notes Niel Powers, VP of products at Progress Software's OpenEdge division, which offers application server and other SOA-related software.

Progress recently acquired Actional, which offers software to connect mainframe-based systems with an SOA. "You can't put together an SOA if you eliminate mainframes," Powers says, "because some of the functionality—and a ton of the valuable data that enterprises still need—resides on mainframes."