Impact of service oriented architecture on enterprise systems organizational structures and individuals

In the fast-paced global economy, a corporation must be flexible and agile to meet the shifting needs of operating in an on demand environment. Aligning information technology (IT) systems using service-oriented architecture (SOA) to provide end-toend enterprise integration and virtualized IT services is a critical step. To be truly effective, however, the SOA paradigm also needs to be extended to transmute organizational structures and behavioral practices. In this paper, we first explore the governance, economic, and enterprise challenges to SOA-based IT transformation. Next, we raise the need to redesign the existing organizational models, and we propose the Human Services Bus (HSB), a new organizational structure that optimizes the workforce and streamlines cross-unit processes to leverage the new IT systems. Finally, we discuss the cultural transformation that is required to support the HSB transition and induce the changes required in management and behavioral practices. The issues and insights at all three layers—IT systems, organizational structures, and cultural practices—are based on IBM’s experience with adopting on demand methods.

Initiatives for service-oriented architecture (SOA) and on demand business are being adopted at various corporations to meet the operating challenges of business in the 21st century. Currently, the primary focus is to apply SOA concepts incrementally to existing information technology (IT) systems to exploit short-term business benefits. To unleash SOA’s full potential, however, a broader vision and perspective is required—one that permeates and transforms the fundamental layers of an organization. SOA facilitates aligning existing IT infrastructure and systems to achieve end-to-end enterprise connectivity by removing redundancies, generating unified collaboration tools, and streamlining IT processes. In addition, institutionalizing both operational and technical governance and equipping success factors. To effectively leverage the virtualized IT services layer and its collaborative tools, the organizational model must be transformed to create differentiated and flexible team-based services. The new model optimizes cross-business unit operations to deliver objectives, eliminates costly duplication, and flattens management chains. The resulting structure is flexible, agile, and well-orchestrated. Incorporating organizational redesign is a very complex task. It involves executing a well-planned transition strategy that harmonizes existing elements in the new structure. This is done by modifying existing traditions, by instituting new human resource (HR) practices and management principles, and by developing novel incentive arrangements. All of these changes need to be performed without major disruptions to the existing corporation fabric. IT TRANSFORMATION Corporate initiatives and directives are often necessary to induce the required behaviors in a company to successfully support an enterprise-wide SOA. These initiatives include establishing IT directives for creating business transformation, creating executive councils and architecture boards, institutionalizing governance policies and models, and most importantly, allocating funds to sponsor these directives. IT transformation initiatives are needed to create an on demand business and an IT environment that is nimble, robust, and less expensive. In this paper, we present several initiatives that provide insight into the enterprise transformation undertaken by IBM’s on demand strategy. One such initiative, ECBA (Enterprise Component Business Architecture),

represents the key framework for IBM’s SOA adoption. Aligning SOA funding and investment Given the realities of running a corporation, successful SOA implementations are affected by direct or indirect funding controls that enable business-unit activities to focus on projects that promote and sustain a coordinated and coherent company-wide architecture. After the business value benefits for SOA have been calculated for return on investment (ROI) and IT efficiencies (e.g., reuse and reduced development costs), a corporation’s economic behaviors have to be adapted to support the SOA vision. New initiatives need to be institutionalized to guide the organic evolution of the enterprise toward this vision. Because many large enterprises operate as ‘‘silos’’ of individual sub-brands, a corporation’s economic directives must promote a collaborative environment of IT goals that support SOA-driven, enterprise-wide IT capabilities. Funding models are highly dependent on the financial resources of the owning business unit and pose obstacles to efficient funding decisions for enterprise-wide services. Should the business units primarily control funds for IT services, should they be centrally controlled at an enterprise level in the Chief Information Officer’s (CIO) office, or should there be a combination of these approaches? The company’s financial planning activities to create IT functions and services must be coordinated at an enterprise level by the CIO to produce and maintain a set of common services that can be used by more than one business unit. To maximize the efficiency of IT implementations, a balance must be established between business-unit autonomy and enterprise-level directives for coordinated IT investment strategies. Organizational redesign may be required to streamline IT investment and institute a system of councils to define and manage IT services.

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