SOA, CMDB and Automation

By Julie Craig

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If the economy isn't yet in the midst of a nuclear winter, it's at least in a nuclear autumn. The financial meltdown has already changed the face of the financial industry, and some analysts say we've only seen the beginning. And it's likely that the landscape of other industries will soon be re-shaped as well.


Amidst this turmoil, companies still have to carry on business as usual. The foundations that provide business stability may be eroding, but CIOs are still required to keep the lights on and make sure their teams continue to deliver high quality services to the business. The paradox, however, is they must simultaneously adapt to some of the most rapid, massive, and global changes the IT industry has ever encountered.


It's not really necessary to detail those changes. Everybody has heard about the mergers and acquisitions that have already taken place, and obviously these consolidations will significantly impact technology systems. We as an industry have been though enough economic downturns that we also understand the impact of falling stock prices and loss of confidence. Research is now showing that IT budgets will be relatively flat into 2009, with minimal growth at best.


What we haven’t encountered before, however, is a literal meltdown of financial foundations across business, government, and personal investments, and it's likely that almost 100% of companies are strategizing ways to get through the next few years. There is some good news here (in an odd sort of way) and that is that everybody is hurting. Why is this good news? When the economy is this bad, few companies are actually making money. Competitive differentiation is a luxury that comes with success—we don’t typically associate innovation with recessions. Surrounded by financial turmoil, most companies are simply trying to stay afloat. This means companies less successful at developing a strategic, planned approach to IT services may finally have a chance to play catch-up.


Haves & Have Nots


I have been writing for some time about IT as a business differentiator, and have pointed out the fact that companies are being separated into technology "haves" and "have-nots." Those that have taken a strategic approach to IT investments and have leveraged technology to increase business flexibility and agility are the “haves.” They can adapt to change more easily than competitors. In the business world, this means they can respond relatively quickly to changing markets.


“Have-nots,” for one reason or another, are so consumed with tactical projects and activities they are unable to position technology that directly aligns with business requirements. This market is a rare opportunity for "have-nots" to play catch up. Since few companies have money to invest, most are treading water until the marketplace improves. This provides a golden opportunity for savvy companies to ramp up for the better days ahead. And canny technology investments are central to the notion of positioning in anticipation of the market opportunities to come.


The truth is that the marketplace will improve over time. Anticipating the upturn that will eventually come, there is no better time than the present to invest in projects that improve operational efficiency. Operational efficiency focuses on making better use of assets and human resources and optimizing technology investments to wring every last benefit out of every budget dollar. Although optimal use of people, processes and technology improves efficiency, the biggest benefits come from projects that improve all three. A study of high performing companies reveals that a few key areas are proven sources of low hanging fruit in this regard.


One such investment is in service oriented architecture (SOA) deployments. The beauty of SOA is that it promotes a modular approach to building, deploying, integrating and maintaining business services. In today's marketplace, this means that companies confronted with the massive changes in regulatory requirements we are likely to see, or the integrations that mergers and/or acquisitions will require, will be able to adapt to these changes with relative ease, compared to less agile competitors.

Companies that have not yet invested in SOA should use this down market to explore opportunities in this area. The experience of SOA experts has been that SOA projects can often be self-funding. In other words, when well chosen, they can yield enough ROI that investments pay off very quickly in cost and human resource efficiencies. ROI comes from multiple areas, including more efficient development projects, opportunities for service reuse within and across departments, and ease of integration. Simplifying the technical challenges around integration with partners and customers makes it easier to offer new products and services that would not have been possible without simplified integrations.


Configuration management system investments are another. Configuration management databases (CMDBs) drive efficiency because they provide a "map" of IT and business investments and their relationships. Few of us would think of driving from New York to Los Angeles without a map. Nevertheless, most IT organizations still lack a comprehensive view of assets in context to the business services, configurations and users they support. In effect, support and asset management teams are flying blind. EMA consulting engagements have documented CMDB early adopters who have reported 200% to 400% ROI. ROI comes from multiple sources, including improved staff efficiency, higher service levels, and better control of the change process.


Investments in enterprise management products can also add efficiency. We are seeing an evolution of the marketplace in which products are driving more value than ever before. One intriguing capability we are seeing more of goes by multiple names—autonomic computing, dynamic computing, etc.—but involves driving the knowledge of human IT "experts" into management technology. Autonomic technology systems are capable of managing themselves or other systems, and enable IT organizations to improve technology support capabilities without necessarily adding headcount.


In short, now is a good time to seek IT investments that are self-funding and that position the business to take advantage of future opportunities for growth. Turning a “have-not” IT organization into one that is efficient and business aligned is difficult to do in a competitive marketplace. However, taking advantage of an economic downturn may very well be one way to turn a company around.

Julie Craig is a senior analyst with Boulder, Colo.-based Enterprise Management Associates (www.enterprisemanagement.com), an industry research firm focused on IT management. Julie can reached at jcraig@enterprisemanagement.com