Harvard Business positioning SOA in Business Terms

Ever wondered about how to position SOA in business terms?

Hereunder the intro of an Harvard Business Review article about this:

"If your company embraced the reengineering revolution and is now hitting a wall, look beyond business processes to the new frontier of efficiency: the activities that make up those processes. Advances in IT--especially a relatively recent one called service-oriented architecture--are making it possible to design and deploy business activities as Lego-like software components, which can help transform your business into a highly productive plug-and-play operation. SOA enables discrete activities to be accessed via the internet and to be easily updated, shared, bought, and sold--both within your organization and externally. Most companies have thought of SOA merely as an easier, less expensive way to maintain the software that supports existing operations. By failing to revisit their organizational designs before applying SOA, however, these businesses are missing an opportunity to replace proprietary processes and activities with standardized, fungible ones. That's the nuanced argument made by Merrifield, of Microsoft; Calhoun, of Accelare; and Stevens, of Synaptus. To guide you through the intricacies of revisiting your operations, they outline an approach called a business capabilities analysis. Their method involves diagramming your company's work activities, describing the capabilities that support them, valuing and assessing the performance of both, and creating a heat map that helps identify the priorities for an improvement program. The authors share real-world examples of companies that have reaped rewards from this self-analysis and subsequent SOA implementation. They also acknowledge the barriers to applying SOA, including the gulf between CEOs and their IT departments. The leaders who overcome such obstacles, say the authors, will pioneer the next great leap in corporate productivity."

Ever wondered about the process about how to determine which aspects of your business operations will best benefit from SOA technology ?

The same article suggests the following 5 step process:

1. Describe your operations in terms of desired outcomes.

Resist any temptation to describe your operations in terms of the work people do (“We send customers invoices requesting on-time payment”) or how they do it (“We check orders against our invoices”). This leads to a long list of operations that sound different but that all mean the same thing.

Instead, describe operations in terms of desired outcomes—such as “Collect customer payment.”

2. Identify the activities supporting your desired outcomes.


To support the desired outcome “Generate demand,” managers at a financial services firm listed three activities: “Manage partner relationships,” “Market services,” and “Sell services.”

3. Identify the capabilities supporting each of your activities.


At the financial services firm, capabilities for “Sell services” were: “Manage orders,” “Manage sales,” “Manage immediately filled sales,” “Configure service pricing,” “Manage contracts,” “Qualify prospects,” and “Conduct business intelligence.”

4. Identify activities most critical to your company’s success.

Your most critical activities are those that differentiate your firm from competitors, strongly influence whether customers buy from you and remain loyal, or drive a key performance measure (such as manufacturing cost, product quality, or time to market). Grade current performance on each critical activity’s supporting capabilities.

5. Design a more efficient operating model.

Identify activities that lend themselves to a plug-and-play approach. For example, analyze whether seemingly similar activities in different areas really are the same (in which case they could be automated for use by multiple areas. Place each activity in one or more of the following categories:

Primary: Keep in-house and designate as a top priority for improvement.

Shared: Share with other divisions.

Shifted: Transfer to customers, suppliers, or operational specialists.

Automated: Use SOA to automate any of the above through Web-based services.


Insurer Harvard Pilgrim Health Care’s critical activities included identifying subscribers at high risk or in the early stages of developing chronic illnesses such as diabetes and heart disease. Spotting these people early would enable the company to enroll them in preventive care or disease-management programs before their conditions grew serious. But that required sophisticated datamining and -analysis technology that could comb through claims and other information. Recognizing it lacked this technology and expertise, the insurer moved those activities to an outside specialist.

Harvard Pilgrim also outsourced noncore activities (such as pharmacy-benefits management) so it could focus its resources on improving activities that afforded a strategic advantage (including creating new offerings and selling to large groups).

Almost bankrupt in 2000, Harvard Pilgrim is now solidly in the black. It has a host of loyal customers. And it has repeatedly received top awards or rankings for its service quality and customer satisfaction.

Read the full Harvard Business Review article here: http://harvardbusinessonline.hbsp.harvard.edu/b01/en/common/item_detail.jhtml;jsessionid=DZ1125C2YK2DEAKRGWDSELQBKE0YIISW?id=R0806D&referral=7855

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