For the first breakout session today, I heard Bill Swanton, who’s VP Research at AMR Research. Although the topic was “BPM is the value in SOA”, Swanton talked a lot about SOA-ing your ERP. AMR has obviously done a lot of research in this area, and he had some good thoughts on the ERP long-term lifecycle. ERP systems are often monolithic, and therefore not so easily pushed aside or interfaced with services. What ends up happening is “SOA by evolution”, where an ERP system (he mentioned SAP ERP and Oracle Fusion in particular) is wrapped to create specific service interfaces, although the internal processes remain fixed.
He did discuss the use of technology is a catalyst for changes in business, and stated from their research that 66% of organizations implementing SOA are hoping to improve their business processes. I’m not sure that I agreed with his characterization of BPM and BAM as “key components of SOA”, but I loved the analogy of SOA as the corporate “patch panel”.
He had an interesting chart about how SOA needs vary with the complexity/enterprise spread of existing systems, and degree of customization. If different software is used in different business units and there’s a lot of customization, then the goal of SOA is usually to reduce development costs and reuse existing custom software; there will be a tendency to layer custom layers on top of the existing custom development. At the opposite corner of the chart, where an organization has an enterprise-wide ERP with little customization, they’re looking to compose unique business processes out of the ERP vendor’s provided services that can be a competitive differentiator for them.
Swanton sees a number of short-term challenges — and therefore slower ROI — as organizations transition from traditional applications through hybrid solutions to a true SOA, one of these being the showdown between ERP and SOA vendors for same space. He notes that the ERP vendors are not, in general, making radical changes, which seemed to imply that the SOA vendors might pull ahead on this front.