Service oriented architecture: IBM's practical guide to measure on return on that investment

Measuring the return on investment of the SOA deployed is becoming a very critical issue for companies.

IBM'S ROI MEASUREMENT GUIDE

IBM the BIG BLUE giant of Software industry laid out a study to measure the return on investment of SOA projects.The study mounted by takin into account around 35 SOA projects, across a range of industries and regions.

It was discovered that indeed, every last one of them exhibited improved flexibility, and the vast majority decreased costs– as well as realizing a host of other benefits.

But then something else was also also obvious, something verintriguing: Companies, if they developed a business case at all for SOA, weren’t doing it in the traditional way – replete with exhaustive evidence. They all recognized the difficulties and limitations inherent in building a business case for any fast-emerging technology. But whether they built a business case or not,they all implicitly understood that SOA entails massive business benefits – not least in the
crucial area of innovation – and that given the speed with which SOA was conquering their industries, they had better get on with it if they didn’t want to be left out in the cold.

Striking the middle ground – between no business case and the traditional one – IBM has developed a simplified approach to measuring the business value of SOA.

Let have a very simple way of understanding how to measure it.

All of us know why service oriented architecture is being so much on the hype, it helps in dissolving the business processes into "services" that gives the flexibility to be reused.

CHALLENGES IN MEASURING ROI ON SOA

It is indeed very difficult to measure the ROI of an emerging technology, and according to a British study 89% percent of companies use guess work or intuition while measuring ROI.

SOA INVESTMENT FRAMEWORK ANALYSIS

This is by establishing different sub frameworks which includes

• Benefits framework
• A cost framework that focuses on limited choices and ways to depict the costs incurred.

We also see there are different steps in the investment analysis framework, which basically composes the two sub frameworks.

• Selecting the expected benefits from the benefits framework

• Identifying the applicable cost scenario

• Calculating the initial, simple return

• Assessing and selecting the cost scenario for the second and subsequent implementations
  

• Keeping the benefits constant, calculating the returns for the second and subsequent implementations.