Service Oriented Architecture Field Guide for Executives

7.1. QUANTIFYING SOA ROI

Does SOA save the enterprise money? SOA introduces a mixed bag into the equation. On the one hand, service orientation represents a very ambitious undertaking that requires sweeping organizational changes, significant infrastructure investments, and broad reskilling and educational efforts. On the other hand, if the technology team is skilled and the project scope is well contained, it is actually possible to yield an almost-instantaneous ROI from service orientation.

How Fuzzy Is Your ROI?

ROI is notoriously difficult to calculate. Many speculate that it is more often measured after the fact in order to either justify or punish previous endeavors. The dirty little secret within the technology space, however, is that few enterprises employ any sort of defined process for measuring ROI. In fact, according to e-Skills, a United Kingdom-based not-for-profit organization, in their 2005 fourth-quarter ICT Inquiry report,^[] only 11% of companies calculate ROI for IT expenditures through any sort of formal methodology. The other 89% rely on "informed guesswork" or "personal intuition" for measuring the productivity returns for technology investments. CIO Insight conducted a similar study in 2006 and found that more than half of all executives, both IT and business executives, doubt that ROI measures used within their organizations are even accurate.

Gauging Service Oriented ROI

In a marketplace where agility is the order of the day and SOA is the latest silver ...