Earlier, I posted about why SOA was important, specifically in how it can help customers ease the burden of upgrading their systems and extend the usefulness of their existing applications. I’d like to talk a little more about this shift in development that is occurring to help make this possible – the move from application-centric development to SOA-centric development.

In the application-centric approach, the vendor releases regular updates to your software. Sometimes these are major upgrades but more often they are minor features or bug fixes. One of the problems with this approach is that there is no way to deliver an upgrade to the financial module, for instance, without affecting the other departments that depend on the ERP system.

This difficulty is a result of the way that ERP systems and enterprise applications evolved. In the early 1990’s, business process reengineering (BPR) became popular as means to increase time to market and competitiveness. To oversimplify, in BPR the processes flow from the HQ throughout the business to each operating unit. Beginning in the mid-90’s, ERP systems were all modified to meet the BPR paradigm. The approach was central control – a big, primary ERP solution with modules from the same vendor to support each function.

Since then, the business environment has changed dramatically. Probably the biggest change is globalization. Small to mid-sized enterprises are dealing with more complex business needs, distributed around the world and their business systems were developed together to meet these near-term challenges. Rampant consolidation in manufacturing and other industries has resulted in companies with multiple disparate business platforms, many of which were heavily customized or built in-house.

One other important factor occurred: the promise of centralized control ran up against the reality that no single vendor, and no single ERP system, could support all the needs of a customer. So customers turned to products from niche vendors for best-in-class solutions like supply chain management or financials to supplement their existing ERP.

The result is that today, almost all companies have heterogeneous environments with a mishmash of applications and business platforms. An application-centric deployment approach has made keeping them all in synchronization one big gigantic headache.

SOA-centric development can help fix this problem. This model doesn’t deliver new functionality to the core product or through tightly-coupled modules but as components that augment or enhance the ERP. They can operate as dependents to the core ERP, replacing functionality that used to reside in the big blob, or independently to support a completely new set of business processes. This model gives customers much more flexibility as to when and how they adopt new functionality, allowing IT to respond with standardized solutions much quicker.

The real transformation here is that the ERP system, as we know it, will become a thing of the past. This has already been happening to some degree but too many vendors are clinging to the old paradigm of central control, largely because they’re still rooted in business paradigms from the 1990’s. The reality today is that businesses operate centrally and distributed, so their enterprises applications must be able to do so too. (In a later post, I will talk about this concept in more detail.)

This will not happen overnight but gradually. Large enterprise applications will remain a part of the IT landscape for a long time, and we must support those with feature pack upgrades. Over time, componentization will make this a much easier process.

Darwin is often misquoted as saying “survival of the fittest.” In actuality, in Darwinism, it isn’t the fittest species that survives, it’s the one that’s most able to adapt to environmental change. Today, the business environment includes trends like globalization and collaboration. I can’t predict what companies and industries will face 10, 20 or 30 years from now. I do know that we can’t just repeat the development sins of the past and leave customers stuck when the business environment inevitably shifts again. That’s the beauty of SOA-centric development - customers can remain agile and adapt to whatever environmental changes the future holds.

Regards,

Bruce

Posted by Bruce Gordon, CTO