Innovate with SOA

A commitment to innovation in any organization can be stymied by the day-to-day reality—and resulting ennui—of accomplishing the basic work done that has to be done. Within IT organizations, for example, it’s generally accepted wisdom that a very high percentage of resources and budget are dedicated to maintenance and support, to ongoing operations, rather than to nurturing innovation.
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The well-known 80/20 rule applies here—not only do 20 percent of customers typically drive 80 percent of sales, but 80 percent of resources are deployed to cover routine tasks. (The original usage of this shorthand, by the way, was by an Italian economist, Vilfredo Pareto, who used it to describe unequal distribution of wealth in Italian society in the late 1800s.)

A slightly altered ratio has become popular in IT recently, with publications such as Business Week and Information Week (to list just two examples) alleging that 70 percent of IT budget goes to maintenance, 30 percent to innovation. Following up on this point, Dell Chairman Michael Dell was quoted recently saying that 70 percent of IT budget in Japan was spent to maintain existing systems, with only 30 percent reserved for new systems, “a ratio that needs to be reversed,” in Dell’s words.

HP CEO Mark Hurd and Dianne Schuenemann, Merill Lynch’s Head of Global Infrastructure, both alluded to the need for more innovation in IT budgets during keynote speeches at TIBCO’s TUCON User Conference in 2007. Numerous other business leaders stress the need for innovation in their organizations today.

All of the above may be optimists: an assessment found in a Gartner report cited by CIO Magazine recently sets this ratio at 91/9! Finnish computer scientist and professor Dr. Jussi Koskinen uncovered a similar ratio in 2000, examining worldwide software budgets and finding the portion of software maintenance costs to exceed 90 percent of total budget.

Koskinen also found that this was hardly a new phenomenon, pointing to research that indicated software maintenance costs of at least 67 percent of total budget dating back as early as 1979. He also uncovered the cheerful nugget that there were 250 billion lines of source code being maintained at the turn of our new century.

The Name of the Game is to Maintain
Maintenance and support are unavoidable and not necessarily a bad thing, as they do represent a company’s commitment to ongoing operations. But maintenance and support are not something that managers want to spend northwards of two-thirds of their budgets on. Innovation is, of course, perceived as a good thing; it’s what keeps companies in their respective ballgames, and also allows them to sneak or leap ahead of their competitors.

The use of ratios such as 80/20 and 70/30 implies that there is a numerical, logical path available to us to build more innovation into our organizations. So, how do you go about trying to reverse the 80/20 ratio? Well, there’s an unimaginative way to do it—simply slash maintenance and support budgets and thereby increase the percentage of overall budget that’s dedicated to innovation. This has been reported by numerous CIOs, according to analysts and vendors interviewed for this article.

But that attitude won’t get you far. In fact, there may be a crisis brewing within the ranks of CIOs, who are increasingly perceived as being unimaginative providers of a utility, according to a recent article by John Sloat in InformationWeek. Entitled, “The Evolution of the CIO,” this article describes what may also be called a regression or devolution.

A key metric cited in this article comes from the Society of Information Management (SIM), which found a precipitous drop in the percentage of CIOs reporting to the CEO, from 45 to 31 percent. Additionally, the article cites a survey of 724 senior business technology professionals conducted by InformationWeek in which 41 percent of respondents said the influence of their CIO is “one the rise,” another 18 percent said this influence was “on the decline,” and 40 percent reported “no appreciable change.” One consultant consulted for the article went so far as to say that some CEOs are beginning to question whether their companies even need a CIO, the article reports.

The same survey found 43 percent of respondents saying that line-of-business managers are taking on more responsibility for IT projects. A possible reason for this may lie with the observation of a top Forrester researcher who notes that although IT “runs every business process today…they don’t take ownership.” Somebody will take ownership, “and soon,” the article states. The reality is that the costs and efforts associated with IT groups are those of maintenance—a necessary evil to be sure, but nonetheless something that are just perceived as sunk costs.

The obvious strategy for CIOs (and by extension, other IT managers) is to encourage line-of-business managers to participate in a collaborative relationship focused on innovation, rather than simply try to get formerly techno-ignorant managers up to speed then assume an adversarial relationship with them.

One way for IT execs (and their business-line compadres) to get a handle on innovation is, first to inventory all their existing assets. Determine the value of these assets (such things as hardware that can run a thousand user applications, an application that checks credit, a service call that looks up a customer record) then work to leverage them by exposing them as heterogeneous services rather than siloed applications. The services-based approach to IT is not new at this point in time. But it is still a novel idea to many organizations to begin to inculcate innovation by liberating the services within existing assets and rebuilding those services into a services-oriented architecture (or SOA).

“Imagine all assets being a portfolio of innovation,” says a software executive interviewed recently by NOW Magazine. This includes legacy assets, and yes, this includes legacy mainframe assets. Not the “hairball” of Sun Chairman Scott McNealy’s piquant description, mainframes instead should be viewed as potential repositories of “gems and jewels,” according to this exec, who points out that “innovation doesn’t have to sit in one area.”

It’s clear that regardless of the innovation game, SOA is a required strategy based on the need to reduce IT expenses through massive re-use and flexibility. As companies realize the role SOA can play in completely rebalancing the maintainance-to-innovation spend, the demand for “service-orienting” everything should take off, by this reasoning. The potential for exponential growth in services will lead to new complexities and challenges, of course. So then the question becomes, how will these services be developed into composite applications, deployed, managed and governed?

End-users, after all, whether employees, partners, or customers, don’t get their groove on, at least these days, by mastering the intricacies of siloed, specific application environments. It’s what those apps can do—the services they can provide—that rock users’ worlds today.

Service virtualization rocks IT managers’ worlds as well. When services become pervasive, how are you going to manage them? How do you deploy, then govern them? This is where SOA boldly steps in. Repeating the mantra that SOA is not a product, you can’t buy a SOA, it is imperative to realize that you can build one.

This is where virtualization escapes the confines of buzzwordism and enters the realm of the practical. When assets are pulled out—decoupled, liberated, decomposed, whatever term you wish to use—of legacy systems and integrated into new, composite applications, web services, or nascent SOAs, they must be virtualized, and here is where the concept of “service virtualization” gains traction.

We’ve been down the virtualization road before, quite recently, in fact. With hardware and applications becoming increasingly pervasive, so grew the challenge to effectively use these assets, and virtualization blossomed. People familiar with age-old concepts such as virtual memory and virtualized storage suddenly needed to wrap their minds around the virtualization of hardware platforms (not just the storage subsystems) and the software that resided on these systems.

Once down this virtual path, it requires only a minor leap of faith to envision service virtualization. As applications become virtualized, it becomes clear that the value of those apps lies within the services they deliver. So those services must be pried out, then integrated into the new, virtualized environment.

We’re All Architects Today
Without getting hung up on the role of the architect, it is clear—paraphrasing Richard Nixon’s comment about Keynesian economics--that we are all architects today. That is, all members of the IT department as well as business-line managers must think conceptually—think innovatively—about their IT assets, infrastructure, and what it should be doing for the business.

SOA can serve as the secret sauce in letting your company start to turn your innovation spend inside out, to start to reverse that seemingly intransigent 80/20 ratio. “Don’t look at existing assets as closed assets,” says one software executive. “Leverage them to start to reverse 80/20.”

Innovative services are created and deployed by thinking in this new, open way. The innovation may lie in creating a new interface that lets users access numerous applications while they are completing what looks to them like a single process. The innovation may lie in faster performance that allows a new feature or two (perhaps a quick survey or bonus offer) to be added to the process. Or the innovation may lie in the creation of an entirely new experience—a community-oriented asset-sharing service, for example—that nevertheless leverages something as wizened as a long-existing relational database.

NOW Magazine bills its focus as “Enterprise Architecture Principles and Practices.” Best practices typically form the core of the ubiquitous Centers of Excellence that one finds at major technology provisioners and buyers throughout the world today. But why not turn those Centers of Excellence into Centers of Innovation? In fact, “practices” today can also refer to “next practices,” and core to innovation is the concept of identifying next practices, making them operational, setting them up as best practices, then moving on in a constant innovation loop.

Many universities have developed such centers, as have various entrepreneurial incubator-type organizations. But this brings back to the nature and definition of innovation. Rather than seeking to build that better mousetrap, a corporate Center of Innovation can focus on those Best Practices that understand all IT assets as gems and jewels, and work to reverse the ratio in ways that don’t reflect a zero-sum game mentality. Are you up to this challenge? Have you already risen to it?

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BY Roger Strukhoff
Source：SYS-CON

This article originally appeared in NOW Magazine, which retains all rights.

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