Impact of service orientation at the business level

IBM Systems Journal,  Dec, 2005  by L. Cherbakov,  G. Galambos,  R. Harishankar,  S. Kalyana,  G. Rackham

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Table 1 Comparison of a traditional enterprise with a service-oriented
enterprise

                                    Traditional Enterprise

Business Ecosystem

IT role in business (business/IT    IT has supporting role ("enabler"
alignment)                          of business activity). Business
                                    organization has the challenge to
                                    ensure that IT understands and
                                    supports business requirements.
Business value creation             Value is created in each phase in
                                    the value chain (e.g., from raw
                                    goods to finished products).
                                    Business value is created mostly
                                    within the enterprise.
Business requirements/fulfillment   Business requirements are often
coupling                            generated and fulfilled by the same
                                    business unit/enterprise.

Business Process

Process flow and composite          Process flow is often sequential;
services                            value creation is cumulative and
                                    based on the value chain.
                                    Composition of services is limited
Process design                      Static, sequential flow with
                                    decision points in predefined
                                    sequence. Modeling is focused on
                                    decomposition.

Organizational Issues

Organizational structure            Hierarchical
Intermediaries                      Limited applicability
Common interpretation of service    Limited applicability
definitions

                                    Service-Oriented Enterprise

Business Ecosystem

IT role in business (business/IT    IT plays a strategic role in
alignment)                          business transformation, including
                                    creation of new sources of business
                                    revenue. IT systems mirror the
                                    attributes of the business they
                                    enable.
Business value creation             Real-time information moves across
                                    the value net among cooperating
                                    businesses, facilitating dynamic
                                    relationships among partners. The
                                    business value is created through
                                    services provided by participants.
Business requirements/fulfillment   Logical separation of business need
coupling                            (service consumption) from
                                    fulfillment (service provision).
                                    The same business need can be
                                    fulfilled by multiple providers.

Business Process

Process flow and composite          Process flow is net-like, through
services                            composition and enhancement (and
                                    often parallel execution) of exis-
                                    ting services provided by partici-
                                    pants in the business ecosystem.
Process design                      Dynamic, based on execution results
                                    of subprocesses. Nearly real-time
                                    dynamic orchestration.

Organizational Issues

Organizational structure            Horizontal, network-like structure
                                    based on service consumer-service
                                    provider relationship
Intermediaries                      Service intermediaries are needed
                                    to accelerate negotiations and
                                    facilitate switching providers
Common interpretation of service    Essential in the service-oriented
definitions                         environment

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