Companies still seeking ROI from SOA

Study finds that only 37% of firms using technology have seen positive return

Only 37% of companies using service-oriented architecture (SOA) technology have seen it result in a positive return on investment, according to a report released Monday by Nucleus Research Inc.

David O'Connell, an analyst at Wellesley, Mass.-based Nucleus, said that while corporate SOA projects could provide strong ROI for companies, most efforts today "seem to get stranded in little local pockets" of organizations.

"SOA is rather narrowly adopted, [and] it tends to be adopted on as-needed basis," O'Connell said. "It is easy to get ROI on SOA when you have a small handful of services for a narrowly defined set of projects. When you want to go enterprisewide, that is a large jump up. People are not getting over that hump."

The report noted that fewer than four in 10 corporate developers use SOA tools and technologies despite their promise of cutting application development costs, In fact, the report found that SOA impacts only 27% of an average company's IT projects.

"Developers think it is cool to come up with a new piece of code," according to O'Connell. "When you're developing in an SOA environment you need ... to customize something that someone else developed. That is not instantly appealing to developers."

The report also found that developers who did use SOA tools increased productivity by 28%.

Nucleus suggested that companies train developers and acquire repository and registry technology to ensure that services that can be reused can be easily found. O'Connell said that because most SOA projects to date have been limited to corporate silos, investments in repository and registry technology have yet to be made.

In fact, the report found that fewer than one in three companies now use repositories, registries, SOA competency centers, or other tools and technologies that can help broaden SOA adoption. On average, only 32% of published services are reused, the report added.

O'Connell also noted that some departments in IT organizations are hesitant to invest in SOA because the ROI would likely be felt in other parts of the organization that aren't spending on the technology. This creates cultural resistance to investment, he added.

The study found that health care companies and materials companies have the highest level of SOA adoption; about 62% of health care firms and 48% of materials companies are using SOA technologies. Industrial and not-for-profit organizations have the lowest level of SOA adoption, with fewer than one in five such companies using the technology.

The most common driving forces behind SOA adoption are business process improvement, portal development, master data management and partner integration, the study said.

Copyright © 2007 IDG Communications, Inc.

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