SOA and SOI Change IT Funding... And Make Outsourcing Easier

Loraine Lawson

Sometimes, you can talk and debate an issue all you want -- but it takes real world actions and time to work out the answer. And after all that debate, you often see that you missed the real issue all along.


How organizations pay for SOA is a great example of this. It was a hot topic in 2006 and 2007, but then it kind of fizzled out. By December, Joe McKendrick had labeled it one of the "Five Great Unsolved SOA Mysteries."


This is an important problem, because as McKendrick's post notes, SOA is all about economies of scale. Point-to-point applications look better, financially speaking, than the SOA solution in the short term.


Theoretically, SOA will pay for itself over time. But in the meantime, you have to find funding to build out. The question is -- how? Most of the discussion focused on supporting one of several funding options:


The business who wants the service first pays for the service. A simple idea, but it caused problems for SOA initiatives when business units balked at paying for something someone else would also use. Some also criticized this approach on the grounds it could impede strategical implementation, but one has to wonder if it was more widely practiced than anyone would admit.


IT pays for SOA or SOA's a Line Item. Unpopular for obvious reasons, and as it turned out, not widely used. As early as January 2007, my predecessor on this blog, Mike Stevens, wrote about a study showing that only 22 percent SOA funding was earmarked for SOA, while 59 percent came from business solution budgets.


Chargeback for Services. IT builds it, then charges business units to use the service, though some caution this approach causes businesses to view IT as a utility, rather than a business-enabler.


Everybody pays for SOA. This puts IT in the position of company lobbyist -- once again -- trying to make a business case to jaded business units.


Nick Malik described similar SOA payment options when he wrote about taxes as a model for funding SOA back in September. He argued that some organizations are tax-supported (everybody pays), some are tax-augmented (chargeback), tax-neutral (market-driven services, which I suppose would align to the business unit who wants it pays for it), and tax antagonistic (I'm not sure how this would apply to SOA, but he's referring to using taxes as a means of discourage use of services).


Increasingly, the conversation has turned instead to whether or not SOA will even be funded -- and how to keep it going despite a potential recession, even though, thus far, experts say the economic climate does not seem to be hurting SOA implementations.


What everybody failed to consider is the reverse question -- how SOA might impact IT's funding.


As it turns out, SOA and service-oriented infrastructures (SOI) are revamping both, according to this CIO article, written by Mark Denne, author of "Software By Numbers." Denne points out SOA and SOI make it easier for IT to monitor and chargeback for services. This in turn makes it easier to measure IT's efficiency.


It could create IT's long-term future, since, according to Denne, it may lead to a new outsourcing model:

"This move from capital-based procurement of infrastructure assets to as-needed purchases of infrastructure services, helps put a 'real' value on IT infrastructure. Just as mobile phone users buy service by the minute and don't need to own or have a part in the running or selection of the cell phone towers, so the application owners have the opportunity to pay for their infrastructure on an as-consumed basis, without having an ownership or operations stake in the equipment itself."

I have to admit: All of this makes me rethink Nick Carr's contention that IT will become a utility and, ultimately, obsolete as a business unit. Wouldn't that be the greatest irony of SOA -- IT finally convinces business that SOA's the right approach, only to find SOA and SOI made it easy to justify outsource IT.

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