SOA and Outsourcing

Joe McKendrick recently posted some comments on the impact of SOA to outsourcing. He admits that he’s been going back and forth on the question, and provides some insight from Ken Vollmer of Forrester and Sanjay Kalra on both sides.

My own opinion is that an appropriately constructed SOA allows an organization to make more appropriate outsourcing decisions. First, there are two definitions of outsourcing to deal with here. Joe’s article primarily focuses on outsourcing development efforts. Odds are, however, that code still winds up being deployed inside the firewall of the enterprise. The other definition of outsourcing would include both the development and the execution and management of the system, more along the lines of SaaS.

SOA is all about boundaries. Services are placed at boundaries in the systems that make sense to be independent from other components. A problem with IT environments today is that those boundaries are poorly defined. There is redundancy in the processing systems, tight coupling between user interfaces, business logic, and databases, etc. An environment like this makes it difficult to be successful with outsourcing. If the definition of the work to be performed is vague, it becomes difficult to ensure that the work is properly done. With SOA, the boundaries get defined properly. At this point, now the organization can choose:

  1. To implement the logic behind that boundary on its own, knowing that it may be needed for a competitive advantage or requires intimate knowledge of the enterprise;
  2. To have a third party implement the logic;
  3. To purchase a product that provides the logic.

By having that boundary appropriately defined, opportunities for outsourcing are thus more easily identified, and can have a higher chance for success. It may not mean any more or any less outsourcing, but it should mean a higher rate of success.

7 Responses to “SOA and Outsourcing”

  • Todd:

    Joe McKendrick posted a followup to his original article, including some of my comments. If you’re interested, you can find it here.

  • […] I have previously posted on the topic of outsourcing and said that SOA doesn’t necessarily mean any more or any less outsourcing, but it should mean a higher rate of success. Organizations should have a better handle on the boundaries that make up their systems, and as a result, have a better handle on where the key integration points are. At the same time, this effort could open up new opportunities, but I think those will be driven by the business strategy, not by the technology. […]

  • […] SOA is game changing for application providers. We’ve certainly already seen this in action with activities by SAP, Oracle, and others. What was particularly interesting in the webinar was that while everyone had their own opinion on how the game will change, all agreed that it will change. Personally, I thought these comments were very consistent with a post I made regarding outsourcing a while back. My main point was that SOA, on its own, may not increase or decrease outsourcing, but it should allow more appropriate decisions and hopefully, a higher rate of success. I think this applies to both outsourcing, as well as to the use of packaged solutions installed within the firewall. […]

  • […] into play at all. What SOA should do is assist you in making appropriate vendor decisions. Just as I commented some time ago that SOA should neither increase nor decrease outsourcing, but instead ensure increase the chance […]

  • […] working properly to make good decisions on how to use SaaS or WOA appropriately. I stated this in a post back in December of 2006. When an organization views itself as a collection of services, it is now in a position to pick […]

  • Conversely, SOA, if done right, could help outsourcing vendors provide an incredibly efficient and cost effective infrastructure that is far cheaper and offers far better economies of scale than the customer’s own processes.– Joe McKendrick

    It may not mean any more or any less outsourcing, but it should mean a higher rate of success.– Todd Biske

    I think both of them are right. SOA and outsourcing is co-related with each other. SOA is somehow defined as strategy which will be very effective for the success of outsourcing.

  • Fern:

    SOA and Outsourcing both offer the business value of increased business agility. Aside from that, there’s the economic value — it’s something companies seek from outsourcing and it reinforces/matches the cost-benefits of implementing SOA.

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