Many modern enterprises heavily rely on their Information Technology (IT) systems.
Because of this dependence, IT is driven by the dynamics of the enterprise itself.
Enterprises have high expectations from enterprise IT such as having high level
of flexibility and agility (Janssen and Joha, 2008).
When it was first introduced in the enterprises, IT was mostly responsible
for storage and processing capacity without having business logic. By time,
more and more business logic have been added to IT applications in the previous
20 years that made it a part of the business itself. As IT is a part of business
today, changes in the requirements of business and the need to develop new functionalities
also requires changes in the IT applications which forces enterprises to reuse
existing components efficiently to be able to reduce the costs (Krafzig
et al., 2004).
Now imagine a car manufacturer designing all the parts of the car in a way
not to let it be possible to replace a single part without replacing the car
wholly. After trying to adapt IT to business processes during previous 20 years
in many different ways, the state of the business processes of many organizations
are like the cars of this fictional manufacturer. These organizations have applications
to support the operations of these monolithic systems that are very difficult
to replace piece by piece. Fortunately, it is becoming possible to design many
business activities as Lego-like software components that can be easily put
together and taken apart. This is achieved by using SOA, a new way of designing
and implementing the software components (Merrifield et
SOA is a remarkable evolutionary step for technology world especially to help
it to complete one of its greatest unfulfilled goals. This goal is to have the
ability to connect a wide variety of systems without proprietary software (Pulier
and Taylor, 2006).
SOA intends to create a services platform consisting of many services that
are elements of business processes that can be combined and recombined into
different solutions and scenarios, as determined by business needs. This capability
of SOA to integrate and recombine services helps the organizations to have a
closer relationship between business and IT. Moreover, it provides to organizations
the flexibility to address new situations (Bieberstein et
It is clear that aligning IT systems by the help of service-oriented architecture
is a very critical step to enable end to-end enterprise integration and virtualized
IT services. On the other hand, to be really effective, SOA should be overarching
technology and needs to be extended to transform organizational structure and
the behavioral practices of the organization (Bieberstein
et al., 2005).
However, most companies that have started SOA adoption have applied it without
considering the option of re-designing of their businesses as a first step.
Having omitted this option, they have disregarded SOAs greatest value
which is the opportunity to re-design the organizational structure to make it
much more focused, efficient and flexible.
The term SOA is an acronym for Service-oriented Architecture (Moore,
2007). It is the newest approach for designing, implementing and integrating
reusable software components which is offered to organizations as a new technological
framework (Saran, 2006).
A SOA has many different elements which are needed to be considered in order
to build it. The essential ingredients of a successful SOA involves a conceptual
SOA vision, various services, SOA governance and policies, SOA metrics and enabling
behavior (Marks and Bell, 2006).
For the sake of the organizations processes, it is required to have enterprise
architecture and a SOA vision. The organizations should set their goals in terms
of the way they want their processes to function and where they want to see
their organizations at a certain point in time (Moore, 2005).
SOAs offer is a new way to system design that makes it possible to expose
resources on a network as standalone components called services (Joseph,
2006). Services are considered as the central artifact of SOA. Services
can be accessed regardless of the programming language used for development
or the platform on which the service runs. SOA governance is important and needed
to be able to make sure that different development teams will focus on fulfilling
the single SOA vision (Marks, 2005). SOA metrics are
necessary to let the organization know the current position and the direction
of SOA initiatives. Organizations have to spend some time for planning a behavioral
model to make sure that SOA initiative will be successful. The planning process
should start with the behavior of SOA which will enable the organizations to
reach SOA business goals. These behaviors are the ones to lead the organization
to service reuse, SOA conformance, governance and metrics.
Apart from the elements mentioned, there are other concepts that business executives
should take into account while assessing the potential value of SOA. These concepts
include ease of integration (Keller, 2006), software
(service) reuse and business agility (Holtschke, 2006).
With SOA, it is possible to create solutions that are portable and interoperable
using the existing systems which are actually isolated systems by the help of
open standards. Starting point of open standards supporting interoperability
is web services. SOA enables the creation of applications built as a combination
of loosely coupled and interoperable services (Carter, 2007).
Reusability of the services can be best explained by using mass customization concept from manufacturing which is using combinations of standard modules to form an individualized product. SOA is used to apply this approach to the business processes of the organization. Basically following this concept, the services introduced by SOA can easily be reused to create new business processes. As services created using existing back-end infrastructure, this approach will provide the ability customize products in a mass scale.
The fact that nowadays the market and customers are becoming increasingly demanding
requires more flexible IT capabilities to respond in time to changing business
processes and business rules. IT systems serving for customer relations focus
on the benefit of enterprises while customers receive insufficient information
from enterprises. Achieving information symmetry in customer relationships,
providing bi-directional information flow between customers and enterprises
is one of the various ways of keeping competitive advantage. Customer knowledge
management and customer support systems can run with a technology infrastructure
based on SOA (Lin, 2010). Opportunity to increase growth
and revenue, reduction in time-to-market values and cost reductions are some
of the motivations of business agility. SOA fosters the ease of integration
in the applications of the enterprise through interoperability and enables the
usage of existing applications of the enterprise by wrapping them as services.
For this reason SOA is expected to increase the agility of the enterprise in
the long-term (Tews, 2007).
BUSINESS VALUE OF SOA
In order to stay up-to-date and survive in this highly competitive business
world, businesses can not ignore leveraging diverse technologies in their day-to-day
operations and long-term strategy. Organizations are seeking for the opportunities
to broaden their connectivity and increase their revenues; however they do not
forget the need for innovation which is possible by restructuring the applications
for more flexibility and lower costs (Mahdavi and Shirazi,
It is clear that SOA has a significant potential business impact to an enterprise; however this is possible only if the proper business modeling and context are considered during the planning and implementation of SOA. If a company is not responsive enough to changing business and market conditions, SOA may provide the baseline for the needs of this agile and rolling enterprise vision. This is achieved by delivering a strong business value proposition.
It is also important to decide whether a specific activity is valuable from
business perspective. If an activity or the capability delivered by the activity
differentiates the company from the competitors, or has a great influence to
keep the customer loyal or drives a key performance measure (like manufacturing
cost, quality or time to market), then this activity is considered as an activity
providing business value. Moreover, anticipating the changes in the market and
developing new customer, partner and supplier Merrifieldrelationships can be
considered as additional business drivers for SOA.
Business benefits of SOA include not only tangible benefits but also less tangible
but more compelling benefits. It is also important to understand how soft issues
are relevant to achieve service-oriented architectures (Marks
and Corp, 2004). These soft issues are the most difficult aspects of achieving
SOA and they are also the key to ultimate success of SOA.
ORGANIZATIONAL CHANGES FOR SOA ADOPTION
Currently, in most organizations corporate governance and IT governance continues separately only with an intersection for SOA governance. The organization does not have a complete alignment of governance practices, so the CEO is not able to find out the responsible person when a customer service request arises. On the other hand, the recommended future structure allows corporate governance to overarch the IT and SOA governance which ensures that everything is driven by business so that IT and SOA goals and directions line up under the business goals.
To be able to achieve a successful SOA adoption with corporate governance overarching
SOA governance for business and IT alignment, several changes are recommended
by different SOA experts and practitioners: As SOA is a concept for distributed
systems and distributed processes have become reality recently, many of the
existing organizational structures do not either support or provide sufficient
functionality (Josuttis, 2007). In functional structures,
as a result of centralized control, multilayered bureaucracies occur resulting
in less responsiveness to changing business conditions. In geographic divisions,
there are problems like duplication, extra costs and inconsistent messages to
different markets. Other divisional structures might cause silo effect. Finally
in matrix structures it is difficult to balance the activities within different
subsets as the organization is very complex. Even though many people agree that
SOA requires change in the organizational structure, most companies that have
started SOA adoption have applied it without considering the option of re-designing
of their businesses as a first step. Having omitted this option, they have disregarded
SOAs greatest value which is the opportunity to redesign the organizational
structure to make it much more focused, efficient and flexible.
As opposed to requirements of SOA which requires sharing capabilities as services
and reusing existing assets, in traditional architectures budgets were allocated
in silos at the project, group, or department level. For this reason, SOA also
requires new procedures for funding new services and architecture. The real
benefit of SOA will be realized when organizations stop investing locally to
departments and start investing on enterprise-wide assets. If the organization
can not address the financial issues, especially the central funding of reusable
services, it might result in duplicated services and infrastructure where each
of them will address the needs of individual projects and will not be used across
departments (Afshar, 2007).
Not only the organizational structure and the funding model but also the people and the roles are expected to be influenced by SOA transformation. Some of the changes required include creating a group of employees called process officers for improving business processes, developing SOA specific skills, encouraging sharable and reusable services and creating a group responsible from SOA governance. As a best practice, foundation of an Integration Competence Center (ICC) to be able to facilitate trainings for managers, stakeholders, project managers, business analysts and quality assurance team is recommended since usually SOA adoption starts with a group of architects and developers and explaining SOA philosophy to employees enterprise-wide is essential.
By the help of service management capabilities of SOA, it is much easier to maintain a SOA enabled system than a system with monolithic applications. As the cost of maintenance is between 60 and 80% of total cost of an application, even 10% reduction will return a lot to the enterprise. SOA adoption requires departments to share operations and application code, companies to outsource more than before and business units to move part of operations to customers and suppliers. SOA transformation definitely requires collaboration from the initial ideas at the start, to operations and maintenance at the end. Collaboration may not be so easy in organizations in which there are isolated departments acting on their own. Changing the culture of the organization will be the only way in such cases to ensure successful SOA adoption and any model within the enterprise which undermines the value of collaboration can jeopardize success.
One of the key success factors of SOA transformation is the management support.
SOA is a new strategy which will require transformation not only in technology
but also in culture and the structure of the organization and therefore top
managers have to understand these impacts SOA will have in the enterprise. Moreover,
they have to provide enough time to SOA team to be able to put in place the
new processes and should not expect to get the benefits of SOA in one year.
SOA is a strategy which requires long term commitment and will take several
years to be established properly.
MATERIALS AND METHODS
The research model of this study was developed to determine the required organizational changes for a successful SOA transformation. As Fig. 1 illustrates one major dimension of the research model defines the required organizational changes based on new roles, new corporate governance and new IT investment and funding models. Other dimensions find out the reasons of SOA transformation and the extent of SOA. The last dimension examines the success of SOA transformation.
The field research instrument involving 11 questions was designed based on literature survey and the research model in Fig. 1. The questions are close ended questions of multiple choice, multiple answers or 5 point Likert scale type except one open ended question.
The sample is small since there are not many SOA transformations going on even
though many CIOs all over the world are considering this new information
architecture in their organization. The survey has been offered to 50 professionals
who have hands on experience and 34 of them responded to the survey which means
68% return rate. Table 1 provides information about the respondents
|| Research model
|| Years of experience of respondents (n = 34)
The respondents are from Turkey and several European countries including Denmark,
Greece, Italy, Poland, Romania and Slovak Republic.
As SOA is a new design approach, it was almost impossible to find people who have more than 5 years of hands-on experience during the implementation process of the survey which lasted from May 2008 to July 2008. Table 2 provides information about the sector of employment of interviewees and Table 3 clarifies the extent of SOA in their organizations. Table 4 shows stages of SOA in these organizations.
Service quality determines the degree of customer satisfaction which influences
decision to repurchase and reuse the service (Sudhahar et
al., 2006). User satisfaction is vital for the continuance of an organizations
IS functions. Although IS research gives little evidence about the factors predicting
whether an IS user will or will not reuse an IS service Kettinger
et al. (2009) shows that IS service quality plays an important role
in predicting behavioral intention to reuse the service. On the other hand reuse
of existing software can promote software quality (Fichman
and Kemerer, 2001). In this study if it is assumed that SOA increases service
quality since it is implemented for improving services then the following hypothesis
can be tested:
||H1: Extent of SOA transformation in an organization
is correlated with the need for Fostering service (software) reuse
Agility of a company is an ability for adjusting to any unexpected changes
in the business environment. The responses of an agile company to environmental
changes are rapid and efficient which contributes to sustain its competitiveness.
Although there are various methods to measure agility of a company (Ganguly
et al., 2009), the need of a company for higher agility can easily
be observed by its manager and employees based on the business objectives they
|| Sector of employment of the respondent (n = 34)
|| Extent of SOA in respondents organizations (n = 34)
|| Stage of SOA in the respondents organization (n = 34)
Raschke (2010) states that IT is a platform for business
process agility influencing efficiency and quality of results. Since one of
the aims of SOA transformation is to increase competitive advantage which includes
higher efficiency and quality and less time the following hypothesis is constructed:
||H2: Extent of SOA transformation in an organization
is correlated with the need for Supporting ever changing business environment
to become more agile
Weinel et al. (2011) show that employees
perception of collaboration is positively influenced by social presence which
is defined as the degree to which a person is aware of another person in a technology
mediated communication setting. SOA enhances collaborative environment allowing
flexible interaction between different components (Fang
and Sing, 2009). Collaboration also fosters organizational learning (Curran
et al., 2004; Lee and Tsai, 2011) which may
contribute to the success of SOA transformation. This idea leads the following
||H3: Organizational perception about the
influence of collaboration on the success of SOA transformation varies according
the level of SOA transformation in the organization
In order to be successful IS implementations require a fit between the design
of the system and the organization structure. For example, the fit between the
organization structure and standardized business process designs embedded in
an adopted ERP system determines the implementations success or failure
(Morton and Hu, 2008). Similarly, there may be a necessity
for a match between SOA and organization structure which arises H4a
||H4a: SOA requires changes in the organizational
||H4b: Organizational changes depend on the current structure
of the organization
Organizational changes involving IS implementations create costs. Sharma
et al. (2008) confirmed that interdependencies between changes are
key drivers of IS implementation costs. During SOA transformation new implementations
will be necessary and there are various methods for financing the planned costs.
Organizations may need to use a different funding model for SOA transformation
than the funding model used for previous IT implementation projects. This idea
is tested with H5:
||H5: SOA requires change in the funding model
of IT implementation
SPSS 16.0 is the software tool used for statistical analyses of the study. The reliability analysis for five variables of reasons for SOA transformation results a Cronbachs Alpha of 0.708. The Cronbachs Alpha is 0.717 for the analysis of 29 organizational change requirement variables. Four variables of successful SOA transformation have a Cronbach alpha of 0.635.
The first hypothesis H1 had been tested using cross tabulation. The Chi-square test led to Fishers test which concluded a statistically significant difference with a sig. = 0.001 (Sig.<0.05). This result shows that there is a strong relationship between the extent of SOA transformation and Fostering service reuse. The enterprise level SOA transformations consider service reuse as the main reason to start this transformation. On the other hand, the most divisional level transformations do not start the transformation to be able to foster software reuse. Reasons for SOA transformation are shown in Table 6.
For H2 cross tabulation technique led to a Fishers exact test and resulted a significance of 0,029 (sig.<0.05). This statistically significant difference indicates that Supporting ever changing business environment to become more agile as a reason to start SOA adoption depends on whether the SOA project is at enterprise level or divisional level. When the extend of SOA transformation is at divisional level agility may not be an aim of this transformation.
A non-parametric test, K independent samples test had been used to test the
H3. It is not possible to assume that the extent of SOA transformation
fits to a distribution like normal distribution and there are more than two
independent groups. Kruskal Wallis test variable is the ordinal variable which
shows the organizations perception of the impact of collaboration in SOA
success. Grouping variable is the level of SOA transformation in the organization
which had 3 possible values, enterprise level, departmental/divisional level
and single/isolated projects. Table 7 summarizes success level
of SOA project in respondents organizations. The organizations perception
of the impact of collaboration in SOA success do differ significantly by level
of SOA transformation with a significance of 0.02 (sig.<0.05). This result
is an expected result since the organization considers collaboration as a more
important factor in the success of the SOA transformation as the complexity
of the transformation and the interaction need between different departments
|| Organization structure prior to SOA transformation (n = 34)
|| Reasons for SOA transformation (n = 34)
|| Success level of SOA projects (n = 34)
|| Changes in Organizations Structure (N = 34)
It is obvious that in an enterprise level transformation complexity and the
need for interaction are more important than in a departmental level transformation.
For this reason most of the enterprise level transformations considered collaboration
as an important factor however, departmental level transformations did not.
Factors influencing the success of SOA are presented in Table
||Dependency of structural change need to current organization
|| Changes in Funding Model (N = 34)
To be able to find out whether SOA requires changes in the organizational structure or not, the number of responses which indicates any change in the organization and which does not are identified. If at least one of the changes indicated in Table 8 is selected, this means organization did some changes; otherwise it is considered as nothing changed. When chi-square test is applied to this new parameter a significant difference exists (sig. = 0.000 (Sig.<0.01)). This supports H4a which states that SOA requires changes in the organizational structure. New roles which may be indicators of structural changes aligned with SOA transformation are shown in Table 11 Organization structures prior to SOA transformation are summarized in Table 5.
As Table 9 indicates cross tabulation has been applied to analyze if the need for organizational change depends on the structure of the organization. Chi-square test revealed that there is no statistically significant difference among organizations of different structures for the need to make structural changes in order to be successful in SOA transformation. H4b is not verified.
In order to test H5, two groups of organizations are defined: The organizations having responses which indicate any change in the funding model and the organizations with no indication of change in the funding model. When chi-square test is applied to this new parameter, the significant difference supported H5 (sig. = 0.001 (Sig.<0.05)). Actually 85% of the organizations made some changes in their funding model for SOA transformation as Table 10 show.
|| New roles with SOA (n=34)
|| Factors influencing the success of SOA (n = 34)
CONCLUSION AND FUTURE RESEARCH
Nowadays, SOA is one of the most discussed words in technology and business world. SOA promises a new way of designing and implementing software components to make it possible to plug-and-play new components like adding a new Lego to a childs model. Being so appealing, SOA adoption started to become the highest priority in the to-do list of many organizations which are keen on creating systems that can easily and quickly be configured and modified to support dynamically changing business requirements. Although previous research emphasizes that the main motive of organizations to implement SOA is to have higher flexibility and agility this study indicates that better integration of processes and information with customers and suppliers and fostering service reuse are also important reasons for preferring SOA.
However, SOA is more than being just a technology change and has impacts on
corporate governance model, organizational structures, IT investment and funding
models, people and roles and operational activities and requires collaboration
and management support which are the organizational change situations created
after implementing any organizational development program (Taghizadeh
and Mahmoudzadeh, 2010). Some previous studies claim that pioneering organizations
of SOA adoptions ignored redesign issues. However, in this study 88% of firms
in the sample are restructuring their organizations. Although collaboration,
management support, IT stuff and organization structure are all the factors
influencing success of SOA transformation as mentioned in prior studies, organization
structure takes its place as the forth factor when they are ranked. The structural
change is generally in the form of arrangements of business processes and relations
among business units but not changing hierarchy in the organization. Among the
19 proposed new job positions as part of SOA transformation efforts 18 new roles
have been confirmed to be useful and necessary for the organization supporting
earlier claims of researchers. From financial point of view, the study determines
a strong preference for central funding model in order to finance SOA transformation
which agrees with recommendations of former studies.
Managers who would like to start SOA transformation in their companies should
keep in mind that SOA is a big step towards highly flexible and agile business
environment however, it is not a silver bullet which can change everything in
the organization in a moment and requires collaboration between different units
of the organization, commitment from the whole organization including business,
IT and senior management. It is an important change which requires long term
planning at the very beginning to ensure the success of the transformation otherwise
it can become a disaster.
The recommendation would be starting with small pilot project(s) and then expanding the scope of the projects to a division or the whole enterprise based on the needs of the organization. This expansion should be considered as a chance to re-design the organization to take full power of the SOA transformation to make the organization much more focused, efficient and flexible.