SAS Review

October 1, 2006 from CAmagazine and written by Michael Burns – “In the global market for corporate performance management and business intelligence software, SAS Institute Inc. is unquestionably a leader. With 10,000 employees, 4.5 million users and 40,000 customer sites in 110 countries, the company earned revenue of US$1.74 billion last year. Based in Cary, North Carolina, it has offices throughout the world, including Toronto. It also has the distinction of being the world's largest privately held software company.

In the past, SAS competed with companies like Hyperion and Cognos. Today, it also shares the market with some ERP vendors that are bundling CPM components with their systems. So why would anyone want to use multiple products if they could just use one integrated ERP solution?”

Business Process Improvement Survey: Creating Smarter, Faster, Cheaper Processes is IT's Main Mission

October 2006 from CIO Insight – “Improving business processes is the top priority for many IT executives, especially at small and midsize companies. Most companies are hoping to boost productivity and cut costs by revamping their business processes with the help of IT; smaller companies are also aiming to increase revenues. Not surprisingly, that's spurred an increase in the number of BPI projects across the board. Integrating timely information into work processes is also important: 83 percent of respondents say one of their primary BPI goals is to deliver critical information to employees while they are carrying out the company's business processes. But CIOs aren't just seeking to improve operations like logistics and customer service; they are also looking to improve the ways that managers and knowledge workers do their jobs, since managers as well as rank-and-file employees are under great pressure to work more efficiently and effectively. Financial, compliance and strategic planning processes head the list of today's top three BPI priorities.”

180 View – IT can help Business Process Improvement (BPI), but should not be the driver. First, IT can have its own agenda, which may not be aligned with corporate strategy. Second, BPI is achieved not just by investment in IT. Motivation, organizational structure, and business process design can also have a huge impact.

Cross Functional Alignment in Supply Chain Planning: A Case Study of Sales & Operations Planning

July 2006 form Harvard Business School – In this scholarly paper, we read that “In 2002, Leitax, a niche consumer electronics company, suffered serious supply chain planning mishaps due to poor cross-functional integration in the supply/demand planning activities. The poor integration resulted from organization differentiation among the functions and an unsophisticated approach to integration…

The coordination system requires specific organizational devices to promote integration that facilitates decision-making across functions and the general resolution of ensuing conflicts to the approximate satisfaction of all parties and the general good of the enterprise.

A common organizational arrangement for achieving integration across differentiated functional areas is the integrating department. Lawrence and Lorsch (1986) found that six factors determine the effectiveness of such integrating groups. Three of these factors relate to characteristics of the integrating group. Specifically, integrators tend to be successful to the extent that they (1) are seen as having the most important voice in cross-functional decisions, (2) are evaluated and rewarded in accordance with the overall performance of cross functional decision making, and (3) have a departmental structure and orientation midway between those of the other functions.

The DMO had these attributes of a successful integrating department. The DMO was publicly mandated to improve demand planning. The case study recounts a growing influence of the DMO over demand and supply planning due, in part, to their competence and experience in managing these processes. The DMO’s incentives were based on forecast accuracy, which Fowler had realized early on was in principle a cross-functional goal. The DMO exhibited flexibility and the ability to communicate with both extremes of the organizational orientation spectrum, as reflected in its ability to take in detail sell-in forecasts from the SDs and long-term aggregated global demand forecasts from the PPS group.

The other three factors that determine the effectiveness of integrating groups relate to interactions between integrators and functional specialists. Effective integration is supported when (4) the managers in other departments feel that they have influenced decisions, (5) this influence is concentrated at the managerial level where decision-making knowledge is available, and (6) conflicts are confronted rather than avoided…

Finally, the details of the coordinating system (responsibilities, structures, and processes) put in place by Leitax make it clear that more is required to achieve true integration than the implementation of an information sharing tool and the efficient information flows that result. For researchers in the supply chain management area, the case illustrates the organizational and behavioral dimensions of coordination systems, dimensions that, to our knowledge, have not been explicitly addressed before. The coordination system is more than the definition of responsibilities, processes, and structures to bring together multiple functions and organizations; it is also the explicit consideration of the social and organizational dimensions of the process by which alignment is achieved.”

180 View – As the case study shows, business process improvement is not just about new systems but also includes motivation, organizational structure and business process.

ERP Gets A Complete Makeover

July 24, 2006 from InformationWeek – “The words "enterprise resource planning" conjure up ugly images: tortuously complex business processes, missed deployment deadlines, massive cost overruns. For more than a decade, ERP has been synonymous with beastly software projects. Now the three most influential vendors--SAP, Oracle, and Microsoft--are re-architecting their applications with the promise that things will get better…

The new ERP systems will be more evolutionary than revolutionary, some analysts think. Unlike the move to client-server computing, businesses won't have to rip out their installed IT systems. SAP, Oracle, and Microsoft promise to usher customers along with incremental steps to their next-generation apps.

At the heart of all three vendors' ERP redevelopment efforts is the adoption of service-oriented architectures, Web services standards, and business process management technology. SOA and BPM, the vendors say, are critical to making their applications more modular and easier to adapt as needed--say, when two companies merge--something that's been sorely lacking in ERP software…

But while SOA and Web services are driving the vendors' ERP redevelopment efforts, they draw a yawn from some IT managers, particularly those at small companies like Tasty Baking. "It really doesn't mean anything to me right now," CIO Bayles says. "I don't have 100 applications I'm trying to integrate."

SOA is low on the IT priority list at some large companies as well. Ingersoll-Rand's Libenson calls service-oriented architecture "the buzzword of 2006," adding that his company doesn't have detailed plans for adopting Web services. He sees them mainly as a way to link ERP applications to legacy systems, adding, "My goal is to find a way to get rid of our legacy systems."

180 View – We don’t think ERP investments are made because of technology such as SOA or web services. However, if the technology can clearly demonstrate an ROI, the investment decision-makers will be listening. We think that at some point in the next couple of years, web services will allow companies to exchange electronic transactions such as Purchase Orders no matter what the system. That means that a supplier does not need to enter customer orders into their systems – now we’re talking ROI.

Greenspan: Dump SarbOx

September 26, 2006 from eWeek.com – “The Sarbanes-Oxley Act is doing more harm than good and must be overhauled, Alan Greenspan told a technology audience here.

"One good thing: Sarbox requires the CEO to certify the financial statement. That's new and that's helpful. Having said that, the rest we could do without. Section 404 is a nightmare." Greenspan's remarks came at a meeting of the Massachusetts Technology Leadership Council here on Sept. 25. Greenspan was Chairman of the Federal Reserve board for 18 years, having retired in early 2006.

He said the evidence is clear that Sarbanes-Oxley strictures are driving initial public stock offerings away from the New York Stock Exchange and to the London Stock Exchange. Increasingly, he said, people recognize that Sarbanes-Oxley must be changed. "The pressure on getting 404 significantly altered is rising and is taking on a critical mass." But he added, "You do not get a bill altered when the two names [Sarbanes and Oxley] are in the process of retiring. People are waiting until they are gone. Then, hopefully, changes will be made. Any bill that passes both houses almost unanimously, cannot be a good piece of legislation."

180 View – We think it’s time Sarbox (or the equivalent) reviews include efficiency (achieve the desired result with the minimum use of resources) and effectiveness (achieve the desired result). Then we are talking about value for the money.

Business Intelligence Tools - Vendor Analysis

July 6, 2006 from IDC – “IDC defines the BI tools market as being composed of two market segments: query, reporting, and analysis (QRA) and advanced analytics. A further segmentation by software packaging divides the market into standalone and database-embedded BI tools:
1) Query, reporting, and analysis software includes ad hoc query and multidimensional analysis tools as well as dashboards and production reporting tools. Query and reporting tools are designed specifically to support ad hoc data access and report building by either IT or business users. This category does not include other application development tools that may be used for building reports but are not specifically designed for that purpose. Multidimensional analysis tools include both online analytical processing (OLAP) servers and client-side analysis tools that provide a data management environment used for modeling business problems and analyzing business data. Packaged data marts, which are preconfigured software combining data transformation, management, and access in a single package, usually with business models, are also included in this functional market.
2) Advanced analytics software includes data mining and statistical software (previously called technical data analysis). It uses technologies such as neural networks, rule induction, and clustering, among others, to discover relationships in data and make predictions that are hidden, not apparent, or too complex to be extracted using query, reporting, and multidimensional analysis software. This market also includes technical, econometric, and other mathematics-specific software that provides libraries of statistical algorithms and tests for analyzing data. Although statistics products vary in sophistication, most provide base-level functions such as frequencies, cross-tabulation, and chi square. This market also includes a specialized form of statistical software focused on functional areas such as the industrial design of experiments, clinical trial testing, exploratory data analysis, and high-volume and real-time statistical analysis…

In 2005, the BI market grew 11.5% to reach $5.7 billion in worldwide license and maintenance revenue. As Table 1 shows, the database-embedded BI server market experienced a higher growth rate (19.9%) than did standalone BI software (10.7%). The query, reporting, and analysis market outgrew the advanced analytics market in 2005. We had anticipated a higher growth rate for advanced analytics. One of the reasons for the lower-than-expected performance of this market segment was a larger-than-expected shift in revenue to query, reporting, and analysis tools as well as to packaged analytic applications by SAS, the largest advanced analytics tools vendor.

Business Objects
Business Objects ended 2005 again as the leading BI software vendor, with $795 million in BI tools revenue and a 14% market share. Business Objects is the dominant query, reporting, and analysis vendor, with a broad user base spanning all major geographic regions, company size segments, and industries. Building on this base, the company has ambitious goals for growth. This growth can either be organic or involve further acquisitions. Both paths will likely contribute to Business Objects' top line over the foreseeable future, with most of the organic growth coming from query, reporting, and analysis tools from both expanding the company's user base within enterprise accounts and deeper penetration of midsize organizations.

SAS Institute
SAS was the second-largest vendor in 2005, with $582 million in BI tools revenue and a 10.2% market share. Fifty-nine percent of SAS' BI tools revenue comes from advanced analytics software. However, in 2005 the company saw strong performance from its Enterprise BI Server product suite, which resulted in a 26% growth in its query, reporting, and analysis revenue (for more details see SAS Revamps Its BI Software and Finds Traction Outside Its Core Competency of Data Mining and Statistics, IDC #34846, February 2006). SAS is also continuing to find success in specialty analytic applications that take advantage of its advanced analytics tools. Examples include applications for various types of forecasting, optimization, and descriptive and predictive analytics. Although this revenue is not accounted for in the current BI tools study, it influences the company's overall product mix and in aggregate has a tempering effect on BI tools revenue.

In the short term, IDC does not see any serious challenge to SAS' dominance of the advanced analytics market and expects the company to continue to experience above-market growth rates for query, reporting, and analysis. However, at the same time there is likely going to be a long-term, continuous shift toward more packaged analytic applications.

Cognos
Cognos finished 2005 as the third-largest BI vendor, with $567 million in BI software revenue and a 9.9% market share. Like its longtime rival Business Objects, Cognos experienced competitive market pressures, which kept its query, reporting, and analysis revenue growth rate below that of the market. IDC speculates that the company's ReportNet product, which had tremendous growth when it was first introduced at the end of 2003, encountered tough competition from the many
reporting products in the market from specialty BI and database vendors. Although Cognos still derives a majority of its revenue from BI tools, the company experienced a higher growth rate in its business performance management applications than it did in BI tools. This trend is indicative of a steady shift toward a focus on analytic applications. As the market for BI tools matures, Cognos is likely to continue to expand on its strategy of both developing and acquiring packaged analytic applications in areas such as workforce analytics (released in 2006), supply chain analytics, customer analytics, and business performance management. This expected shift will put internal pressure on BI tools. However, these trends take years to play out; in the meantime, Cognos remains solidly one of the top BI tools software providers.

Microsoft
IDC estimates the value of Microsoft's BI tools at $353 million, which puts the company into fourth place with a 6.2% market share. Among its closest competitors, Microsoft is a relative newcomer to the BI tools market; the company introduced its OLAP server at the end of 1997. Nevertheless, Microsoft has seen strong growth over the past several years as it has expanded and enhanced its database-embedded BI features and combined them with related tools such as data integration. Specifically, the high growth rate in 2004 is attributed to the release of SQL Server Reporting Services.

More recently, Microsoft acquired ProClarity. (The acquisition closed in 2006; therefore, IDC has shown the two companies as separate entities in this 2005 market share study.) This acquisition filled an important gap in Microsoft's BI software portfolio. The company now has not only server-side BI engines for OLAP and data mining but also a Web-based (as well as thick-client) end-user query, reporting, and analysis tool.

Microsoft's impact on the BI tools market cannot be overemphasized. Currently this is especially true with respect to its Reporting Services and Analysis Services products. However, the company is also going to have an impact at the "front end" of BI in the coming years. Note that although Microsoft Excel is not counted as a purpose-built BI tool, Microsoft's recent focus on promoting Excel as a key interface for BI is also going to have a negative impact on competition. Again, this impact will not create any sudden material shifts in the market, but an evolutionary change has been put into motion by the database vendors, and it will reshape the BI tools market over the next 15 years…

The next wave of BI will reach out to these employees as well as other organizational stakeholders such as suppliers, partners, customers, and government agencies to improve information delivery and decision support functionality for all. This shift in market focus can be only partially addressed through existing BI software, which as already mentioned was created with the analyst or power user as the intended audience. Clearly a frontline employee will have limited use for an OLAP or an ad hoc query tool. In fact, to address the needs of frontline employees and line-of-business managers, organizations must redefine and expand what they mean by BI. The expanded vision of BI must take into account not only the technologies involved but also business drivers and performance management methodologies.

180 View – IDC provides analysis on many other BI vendors including Hyperion, Oracle, MicroStrategy, SAP, SPSS, Information Builders, IBM, Actuate, Lawson and QlikTech. The analysis also includes BI business drivers. If you’re into BI, you should check this article out.

Security: Don't Spring a Data Leak

July 12, 2006 from Baseline – “The most notorious snafu: The U.S. Department of Veterans Affairs disclosed in May that it lost data on 26.5 million veterans and their spouses plus 2.2 million active military members when a worker's computer was stolen out of his home. Other organizations that have reported thefts of computers with sensitive data include Aetna, American International Group, Ernst & Young, Equifax, Union Pacific and the YMCA.

Even the Federal Trade Commission, responsible for enforcing privacy laws, disclosed in June that a laptop with unencrypted private data on 110 people was stolen from a car used by its attorneys.

From February 2005 to mid-June 2006, such security breaches have exposed information on more than 88 million individuals, according to the Privacy Rights Clearinghouse, a San Diego privacy advocacy group.

"Everyone spends a lot of time focusing on external threats," says Gartner analyst Avivah Litan, "but most of the threats are either from insiders or employees who take data home. It has nothing to do with criminals hacking into your databases."

Litan says many organizations are unprepared for accidental or deliberate data breaches: She estimates that businesses today encrypt less than 10% of all sensitive customer data. A survey this year by research firm Ponemon Institute, sponsored by encryption vendor PGP, found that 4.2% of companies use encryption across their entire enterprise (as opposed to only in select departments).

Litan predicts that companies will be fast-tracking security projects to prevent information assets from leaking out, including deploying software that stops any sensitive data from being e-mailed or copied to any outside party or device.

"Pretty soon, there's not going to be any employee privacy—everything is going to be monitored," she says.

Regions Financial, for one, has taken steps to seal the cracks. The 25,000-employee company, which operates 1,300 bank branches in 16 states, encrypts the entire hard drives of its thousands of laptops. (Zimmerman wouldn't name the encryption software Regions is using or say exactly how many laptops it maintains.)

Is scrambling every bit of data on every laptop overkill? Not to Zimmerman. "I can guarantee you that there would be confidential information on almost every laptop in the organization," he says.

But the danger of data leaks obviously extends beyond portable computers. Regions also uses software from Vericept to monitor all outgoing e-mail to make sure it doesn't include confidential information. The software uses statistical analysis on text in messages and attachments to find content that violates the company's policies. Most often, transgressions are accidental, Zimmerman notes: "People don't realize they've hit 'reply to all.'"

Some I.T. executives say portable storage devices—namely, thumb-size USB drives—scare them more than the possibility of a laptop vanishing. "If you were stealing something, why would you carry a laptop out the door when you could throw data on a 60-gigabyte USB drive?" asks Jim Brockett, chief information officer at Washington Trust Bank in Spokane, Wash.

Washington Trust this year plans to deploy software from security vendor NextSentry that will prevent any of its 900 employees' computers from using USB storage devices, and will provide other monitoring functions like flagging e-mail for certain keywords and phrases (say, "account number").

"We're not informing users about [the project]," Brockett says, "but we've let them know we have the right to monitor them."

Another lesson from the rash of data losses in the headlines is that "user education" is only effective to a point. It's certainly true that employees should be regularly updated on good data-handling hygiene. But no amount of education will eliminate careless mistakes or stop a disgruntled employee from violating a policy. Security technologies like encryption and digital rights management software, which controls access to specific pieces of content, can act like seat-belt laws—to help computer users from hurting themselves.

"We can do training, we can do policies, but unless we monitor every laptop every single day, there's no way we can control what people put on their laptops," says Jacob Mays, assistant vice president of information technologies at Stillwater National Bank and Trust in Stillwater, Okla.

To make sure no data can be read on a lost or stolen computer, the bank fully encrypts all of its 80 laptops with PGP software, a measure it initiated last year. Employees must enter a password before Windows even boots up.

Like seat belts, security mechanisms have to be easy to use. "You can talk until you're blue in the face about the need for it, but unless it's practical, people aren't going to use it," says Jason Elizaitis, director of information technology at Fairfield Greenwich Group, a New York-based asset management firm.

Fairfield Greenwich Group, which manages $10 billion in assets for high-net-worth individuals and institutional investors, uses Liquid Machines' Document Control digital rights management software at six offices worldwide. The software lets employees encrypt and assign privileges to documents (such as flagging them for "internal use only" or "do not print"), using a drop-down menu that is installed in the menu bar of Microsoft Office applications.

Why hasn't every company on the planet put in similar safeguards?

Cost may be one issue. A sophisticated digital rights management system, for example, can run to $500 per employee, while content-filtering packages start at around $25,000. Encryption products have entry prices of $125 to $300 per employee; vendors in this market include PGP, Pointsec Mobile Technologies, Utimaco Safeware and WinMagic.

Microsoft promises to bring encryption to the masses in the forthcoming Windows Vista operating system, which includes a feature called BitLocker that can automatically encrypt a PC's entire disk.

Meanwhile, some I.T. managers still have a perception that deploying and managing encryption products is extremely complicated, says Andrew Krcik, vice president of marketing at PGP. "There's still a hangover from people having looked at encryption seriously five years ago and said, 'It's way too complex,'" he says.

Stillwater National Bank's Mays found setting up and managing laptop encryption straightforward, requiring employees to leave their laptops overnight to perform the initial full-disk encryption. He was at first concerned that the PGP encryption software would slow down the machines, but found that on any laptop less than three years old, "there's not a noticeable performance hit."

To Zimmerman of Regions Financial, the justification for encryption and content-monitoring measures boils down to this: What's the company's reputation worth? As Zimmerman puts it: "Whether we lost one record or 1 million records, our credibility with customers would be shot."

5 Steps to Prevent Data Loss

1. Guard against human error. Use security technologies, such as data encryption, as a safety net for honest mistakes.

2. When in doubt, encrypt. All laptop hard drives should be encrypted.

3. Monitor outgoing messages. Use software to block e-mail messages or file transfers with confidential data.

4. Ensure security is easy to use. Otherwise, employees will find ways to get around it.

5. Audit security practices regularly. Experts say such reviews should happen at least monthly.

180 View – We replicated most of this interesting article. Good policy, training and the right tools can go a long way to mitigate the risks.

Safe Driving? Is Your Lap Strapped In?

September 1, 2006 from webCPA – “If you think this article doesn't pertain to you, your firm, or your clients-either because your business is too small, too big, or because it's the perfect size for guarding against IT security threats-think again.

Security woes even hit computer security software company McAfee, which in February had to warn some 9,000 current and former employees that their names and Social Security numbers were on an unencrypted CD that was lost after being left on a plane by an employee of auditor, Deloitte & Touche.

That same month, Ernst & Young confessed to some of its clients that their Social Security numbers and other personal data were lost on a laptop stolen from a locked car belonging to one of the firm's employees.

And closer to home, in May the American Institute of CPAs had to tell its approximately 330,000 members that a hard drive containing their Social Security numbers and other data-sent out for repair in direct violation of the AICPA's internal control procedures-was lost in transit by FedEx.

That faux pas was particularly galling since this year's rendition of the AICPA's Top Ten Technology list ranked information security as the No. 1 technology issue.

"From the standpoint that every AICPA member was affected, if that doesn't serve as a wake-up call for CPAs, I don't know what will," says Susan Bradley, a recognized IT security expert who is a CPA and partner at Fresno, Calif.-based Tamiyasu, Smith, Horn and Braun Accountancy Corp., where she is the network administrator.”

The article gives some suggestions to improve security:

"Most firms think they have a good firewall, so they think they're not at risk," he says. "But many are using consumer-grade firewalls that are not updated or not strong enough to protect their networks."

Higher levels of protection are available from companies like Sunnyvale, Calif.-based SonicWall and WatchGuard Technologies of Seattle, Johnston and others say.

SonicWall's "unified threat management" technology features solid-state firewalls and VPN appliances that incorporate anti-virus, anti-spyware, and network-intrusion prevention features for both wired and wireless networks. It also provides constant monitoring of firewall performance, Johnston says. Similar features are available through WatchGuard's firewalls.

IT managers also need to ensure proper installation of firewalls, and that all crucial network ports are properly protected.

"Many times firms pay extra fees for a firewall installer, and [do] not realize that firewalls weren't installed correctly," Johnston says. "Installers will leave ports open, making a network vulnerable to attack-for example, file transfer port 21, Internet browser port 80, or mail port 25. They all need firewalls."

The growing popularity of wireless networks, along with the growth of Microsoft's Mobile 5 wireless devices, is coinciding with more options for securing wireless operations. For one thing, users should make sure they're using the security pack that is available with Mobile 5 devices, experts say.

Accounting firm Abalos & Associates in Phoenix uses the Sentinel S3 USB key from Mesa, Ariz.-based Sweet Spot to control access to laptops and other mobile computing devices, says Cheryl Folkerth, a CPA and technology manager at Abalos.

The S3 key, which a user must insert into a computing device to access the firm's wireless network, incorporates two-factor authentication that involves 128-bit encryption along with a user-defined PIN. It also integrates a secure virtual private network, or VPN, tunnel to encrypt critical data being transferred between client and host computers.

"No one has been able to get onto the wireless network without the USB key," Folkerth says.

SonicWall also provides a SonicPoints system of securing multiple access points throughout a wireless network, which Johnston says he has used successfully. A SonicPoints system can be configured, managed, and updated through a centrally managed SonicWall security application.

Another tool for protecting laptops is Palo Alto, Calif.-based PGP Corp.'s PGP Desktop, which encrypts an entire hard drive. "If the laptop is stolen, it has no data value," Johnston says.

But technology applications alone aren't sufficient to protect wireless networks, experts say. At Tamiyasu, Smith, IT security chief Bradley enforces a multi-part policy that dictates how employees can access the firm's network. Employees working remotely must not use a public kiosk or any other computing device other than their own anti-virus-software-loaded machine.

Her accounting firm also has remote employees access the Remote Web Workplace, a feature built within Microsoft's Small Business Server 2003, which ensures that sensitive data can't be downloaded to computers outside the office. "They can view but not download the data," she says.

While e-mail has done wonders for improving the service that accounting firms can offer their clients, it also presents huge risks for stolen data when e-mailed client communications are not encrypted.

"Not encrypting e-mail is a glaring error among businesses," Johnston says. If a hacker knows a CPA firm's URL and corresponding IP address, he can figure out how to receive a copy of all e-mail traffic a firm sends its clients, he adds. "A firm's e-mail might reach the right client address," Johnston says, "but the firm won't know if it also reached another destination."

Technology such as AMPLock encryption from Madison, Wis.-based SmartSoftKey, can ensure that only intended recipients can receive and unlock e-mail messages and files, Johnston says. AMPLock integrates with Microsoft Outlook.”

180 View – This article includes the following point - “The realm of security technology is still like the Wild West to most people, with hucksterism and snake oil vying side by side with really well throughout security software and hardware-based tools” Huge investments are being made or will be made to improve security by organizations across the country. Hopefully, you’re not being sucked in by the hype, but investing in practical solutions that are justified based on the risks.

SOA in Plain Language

August 31, 2006 from Datamation – “Service-Oriented Architecture (SOA) is big business – and it’s getting even bigger. Heavyweight vendors like IBM and Accenture are promoting it intensely. Forward-looking enterprises are moving to adopt SOA into their business plans.

In the view of SOA’s proponents, Service-Oriented Architecture has the potential to create a revolution in IT departments. It will blur the line between software and service, radically changing the software industry. It will save companies money, greatly increase productivity, and empower network architects to envision brillant new services.

The only thing it can’t do, apparently, is cook an egg in under two minutes. And with time SOA might even develop that capacity.

But amid the growing interest in SOA – and the grand claims about it – plenty of businesses are still wondering: should we get on board? And what exactly is SOA?

Their confusion is understandable. SOA is a buzzword that is defined using buzzwords. The jargon is so deep you need boots to walk through it.

For example, try to decipher this clear-as-mud definition from Wikipedia:

“Service-Oriented Architecture expresses a perspective of software architecture that defines the use of services to support the requirements of software users.”

Huh? Can you put that in English?

Given that SOA vendors are still working to explain this concept to potential clients, a clear, plain language definition is needed. One of the best experts to provide that is Marianne Hedin, an IDC analyst who tracks SOA.

So, Marianne, what is SOA?

“It’s not a technology, and it’s not something you can buy off the shelf,” she tells Datamation. “It’s a paradigm, it’s a shift, it’s an architectural concept. It’s a new way in which you architect your IT environment.”

“But what,” she asks, with a laugh, “does all that mean?”

Good question. So what exactly is SOA?

Interoperability and Integration

SOA’s greatest value is that it allows enormous interoperability between software, information, and processes.

SOA enables a network architect to mix and match existing elements (software, data, or processes) to create custom-made composites to better serve the business’s needs.

Enterprise managers “can create new services for their clients by taking a component from this application and combining it with a component from another application,” Hedin explains. In doing so, “They can create a new type of service, or a new kind of application, that can serve their clients much, much better.”

With SOA, the divisions between proprietary software start to blur. For instance, a network architect can allow users to combine functionality from software by Oracle and Microsoft and Sun all into one composite application. “The name of the game is interoperability,” Hedin says.

The services offered by these various applications become one composite service. Hence the name “Service-Oriented Architecture.”

(IDC will host a forum in September demonstrating that SOA allows interoperability between .NET, BEA’s Web Logic, and Sun’s Java.)

SOA’s ability to combine disparate elements also applies to legacy software and data. So, for example, SOA can help an insurance company more easily tap data that’s stored in outdated 1980s-vintage software.

In fact, SOA enables companies to avoid constant software upgrades, as well as that once-a-decade software overhaul, by allowing employees to more effectively work with legacy applications.

“The architecture allows you to do a lot of integration of disparate systems, regardless of the age,” Hedin says.

Related to (But Separate from) Web Services

Say a Web site wants to sell airfares from many airlines. The site allows users to book a hotel room, rent a car, and buy concert tickets in the destination city.

“In order to be able to provide that kind of service to the client, that Web site had to be able to integrate multiple applications together, and many pieces of information from disparate systems,” Hedin says. “They have all kinds of technology they want to take advantage of there.”

With SOA “Even if the [the data streams and software] are all different, different codes, etc, they can all talk to each other. They can be combined and integrated.”

(Note: This functionality can be combined without SOA, but it’s much easier to combine disparate data and applications using SOA.)

The standards that have been adopted for Web services, like SOAP and REST, enhance and expand SOA’s capability.

However, “You can have an SOA architecture without Web services,” she notes. “But with Web services you can leverage SOA much more effectively because you have the interfaces that help you with the integration.”

In sum, SOA really does create something of a revolution in the data center. SOA turns a network comprised of discrete elements – purchased over several years, held together by rubber bands and band-aids – into a refreshed and ever-flexible source of business solutions.”

180 View – If you still don’t understand SOA, you’re SOL.

How to bungle a software upgrade

September 26, 2006 from InfoWorld – “Ten years ago, I was the IT manager at a successful software company whose main product was aimed at large insurance companies. It was a DOS app that read records from large data files, did a little processing, and passed the results to other apps downstream. It wasn’t particularly pretty, but it was accurate -- and it was fast! It worked in batch mode, processing thousands of records per minute, which was a critical feature, considering how many records our clients needed to manage each day.

We were doing well with this app, which was pretty much the industry leader. So in a classic it-ain’t-broke-so-let’s-fix-it-anyway move, some of our managers and salespeople began complaining that it wasn’t written for Windows. They lamented the fact that we didn’t have a nice Windows GUI we could put on our sales brochures. If we didn’t rewrite for Windows, they insisted, our competitors would eat our lunch! And while they had our attention, these same people decided that the product would be even more appealing to our customers if it worked interactively, so users could process a single record at a time.

This seemed an odd request, because as far as I could remember, not one of our customers had ever tried to use the product in this manner. Come to think of it, our customers had never shown much interest in a Windows version either. I expressed my concern, but the boss was convinced that a Windows version of the software would be our ticket to world leadership.

Most of our in-house programmers had been laid off by this point, so the boss hired an expensive set of consulting software developers. In spite of my stated reservations, I was put in charge of managing these guys -- requirements, test plans, testing, daily builds, and so on.

When I costed out the notion of rewriting the application from scratch, the boss decided it would be way too time-consuming and expensive. The developers suggested creating a Windows front-end that would manipulate the old, reliable DOS application in the background. I considered this approach to be a serious kludge. Worse yet, it made the app a lot slower. And it was almost impossible to run it in high-speed batch mode. But it worked, and it was cheap. My boss loved it.

We worked on the code for six months; then the copywriters showed up. In order to create compelling sales materials, they insisted, we had to redesign the menus so they’d look good in the brochure. We were already over budget and over time, and some changes made the app harder to use. Still, the boss insisted.

We had worked closely with sales and upper management, and they loved the “new” Windows version. Unfortunately, we hadn’t shown it to any of our users. Apparently I was the only person in the company who was feeling nervous about this. Finally we prepared to take the app, the new brochures, and a large sales team to the biggest insurance convention of the year.

Proudly, we demonstrated our new baby to some of our largest customers. They liked the interface, they loved the brochures, but they all had the same two questions: “How can we get this to run faster?” and “How do we turn on batch mode?”

Our sales staff had no answers. But I had one: “Keep running the old version.” Of course, I didn’t think saying it out loud be a wise career move. So I kept it to myself.”

180 View – Beware of decisions based on technology without a business case.