SOA is a simple three-letter acronym that causes a lot of confusion. What exactly is SOA and why is it at the forefront of IT initiatives around the world? Interestingly, if you ask your peers what SOA means, you'll get a wide variety of responses. Some people will talk about modular applications or reusable components, while others will describe loose coupling or standards-based integration. Other people will describe it as the next generation of IT infrastructure, and invariably you will get the most stripped-down description, "Web Services." Of course, SOA incorporates all of these concepts, but what is missing in these definitions is the value that SOA brings to organizations. In other words, the translation of IT benefits to business benefits has been lost.

The value of SOA is difficult for the business functions within organizations to understand. Why? Because IT tends to overly focus on the underlying infrastructure aspects without exposing the value in ways that those outside of IT can easily see and experience. Think of an older house with knob-and-tube electrical wiring. Replacing the wiring can provide a number of advantages in terms of capacity, grounding, and safety, but it makes the most sense to replace it when there is an associated tangible benefit. It is at this point where the value of the infrastructure improvement can be easily understood. In the same way, SOA initiatives need to tie a business benefit to the important work that is taking place. The best way to show this value is to demonstrate business agility - the ability to respond more quickly to changes in the business environment.

Business Agility - The Value Driver for SOA
"Agility" is a concept that is often used to describe the benefits of SOA, so it is important to step back and look at why and how organizations are seeking to accelerate and easily adapt to changing conditions. First off, in many industries the frequency of change is increasing. The reality of the world today is that technology makes it easier to compete across multiple geographies, while at the same time it creates more complexity due to varying market conditions, regulations, consumer preferences, and competitors. From a systems standpoint, there is a need to be able to manage changes that are constantly taking place more quickly and easily. While some of these changes are related to integrating disparate applications and data sources, the most important benefits can be derived from having applications that are smarter and easily adaptable to changing business needs. In fact, applications must be able to deal with the following agility pressure points:

• Making more decisions in real-time, closer to the point of sale, with the maximum degree of decision automation when there is sufficient information about the customer, transaction, or process
• Making more complex decisions based on more data points and interrelated conditions
• Providing customers with more personalized service or offers based on the context of the current transaction and prior interactions
• Enforcing decision consistency, including across distribution channels, geographies, or business units, when regulations or policies require that people or processes follow specified standard operating procedures
• Enforcing decision compliance based on local regulatory environments for a specific customer or transaction

Looking at these requirements, it is easy to see that there are a number of opposing forces working (more consistency versus increased personalization, more automation versus the need to handle more complexity). But at the core of all of these various pressure points is the need to manage the business decision variations that are at the heart of how applications operate. If you want to improve business agility, you need to be able to build services that allow decisions to be defined more easily, controlled and maintained based on the ever-changing business environment.