In today’s economy, companies are more aware of business processes as a means to identify new cost-saving opportunities. Where companies would have once slashed IT budgets at the first sign of trouble, the past few years have taught many companies that some software applications can create efficiencies and help the company remain competitive, even while the economy is in a recession. This is echoed in several recent surveys and reports that indicate some aspects of IT spending are not likely to see the same dramatic drop they did earlier this decade. However, the impact will still be felt and new IT investments will be reviewed more carefully.

Industry analysts consider performance management to be a software segment that benefits from the current economy as companies scrutinize their systems and evaluate future needs. Evolved out of data-intensive BI suites, performance management helps users unclutter the mountains of data from across a department or organization to develop actions that align with the corporate strategy. Where query and reporting tends to stop at the data point - providing tactical key performance indicators for managers and senior executives - performance management uncovers reasons and helps identify best practices through key business processes. Performance management goes beyond query and reporting, extrapolating information from disparate systems across the enterprise and then tailoring the information according to a user’s specific role in the company, which helps the user do his or her job better and leads to higher performance of the overall organization.

Individual lines of business require real-time access to information across the company, answers to key business questions to support their decision-making and the ability to quickly resolve identified issues once the information is delivered. Dashboards have been effective tools to initially meet these needs and deliver information through a user-friendly interface. However, dashboards end there. Users are not able to answer their specific line-of-business questions when the information presented to them includes data points they must sift through or is comprised of static information that provides no context. The ability to move beyond this has been hampered by the overreliance on proprietary, closed software systems.

SOA is, supposedly, the proverbial holy grail of technology interoperability, providing immediate access to cross-functional streams of data to enable better decision-making. Unfortunately, several vendors remain closed-minded and impose requirements of a heterogeneous IT environment, making the road to clarity a cloudy drive. There is a light ahead, and unfortunate economic circumstances may be the catalyst that helps get everyone on an open track where SOA can help deliver the business-specific answers required by individuals throughout a company.

For performance management to break out of the silos and deliver relevant information to individual users, it requires an open line of communication to other systems. SOA helps bridge the gap, and in an open SOA environment, unimpeded communication can occur, leading to further evolution of performance management and bringing three key benefits: ease of access, relevancy and lower cost of ownership. There are stark differences between open and closed SOA environments and their ability to provide the right information to help you make quick, informed decisions.

Ease of Access

SOA enables users to centrally extrapolate information from systems across the enterprise, rather than logging into individual systems (such as order management, CRM or pricing) and then merging the information in another system. This leap in efficiency and improved access to information means business decisions can be made more quickly and with comprehensive insight. However, in a closed environment, layers are added and silos are created throughout the information gathering and sharing process.

For example, in a closed SOA system, IT receives a request from Mary in sales for answers to specific questions about the Southeast region, pulls the information and delivers an Excel or Access file. From here an analyst is likely to manipulate the data and answer the initial questions Mary asked. This process is static. It creates a silo of information and disconnects Mary from the rest of the organization. Furthermore, the answers may uncover new questions, at which point the process must start again. Mary does not have full and immediate access to the information she needs to dig deeper to find out why orders are missed in some states while others are meeting deadlines early.

In an open system, the SOA architecture is built upon open standards, establishing channels of communication between all disparate systems and a central access point. The IT department does not have to get involved in this process and force the communication of the various systems. Instead, Mary opens a dynamic dashboard which alerts her to the issues in her region. After drilling down into the missing orders, she sees there was an issue with a distributor in the region and is able to take the action to correct it. The open environment allowed several back-end systems from multiple vendors to communicate with one another and provide the detail required.


SOA allows data to be shared across the whole organization and used as KPIs. Alone, the KPIs tell you something has happened – a machine went down, an order is not filled - simple alerts. Before the implementation of SOA, there were several layers of systems that relied on one another to notify a user something is wrong. For example, the knock-on effect of a broken pallet loader in a warehouse would have to go through four, five or even seven or more systems before a customer-facing employee was notified and could take proactive action to find an alternative solution to satisfy a customer’s order. With SOA, the event triggers a communication which is sent to all relevant parties, without interference or reliance on another system. Additionally, the root cause is more apparent, helping executives identify issues before they escalate.

The ability to place information in the context of specific roles and receive instantaneous feedback means each user is working with the most current and relevant information they need to successfully perform their function of the business. For example, Harry, a sales manager, starts his day by accessing a screen that provides all the pertinent information he needs to succeed in his job. On this morning, he is alerted to five sales quotas about to expire and 15 late orders that need to be resolved. In an open SOA environment, Harry is able to determine how to meet the quotas, pinpoint why the orders are late and begin the process to resolve the issues with just a few mouse clicks. Through his dynamic portal, Harry has immediate access to the information he needs regardless of which system it comes from.

Cost of Ownership

Technology often seems to come prepackaged with "gotchas." From consumer technology to enterprise-class systems, the real cost of ownership takes into account many unforeseen factors. As an industry, there should be more focus on bringing the total cost of ownership down. The current conservative approach to spending only emphasizes this point. There are a multitude of factors, including capital costs, time and resources to deploy and maintain, the impact on peripheral applications and processes, and the efficiencies and benefits the new technology brings. For all of its good, SOA is a perfect example of the hidden "gotcha" surprise.

The majority of closed-system SOA architectures prefer all applications to be from a single vendor, requiring a rip and replace to satisfy this need. For many companies, especially today, the costs associated with an "out with the old, in with the new" mentality is not justified. The key is to leverage the current technology infrastructure without causing disruption to peripheral systems during the upgrade process.

Open SOA systems do not force a company onto a single platform; instead, they embrace the existing technology ecosystem, allowing companies to upgrade at a pace that is comfortable with the business needs and budget. Even in good economic times, it is impractical for many companies to fund a project akin to ripping 20 Band-Aids off at once. There is a lot of pain, and if you’re not careful, it can cause further harm.

SOA is changing the face of performance management, bringing with it role-specific features and capabilities so users can perform their jobs more efficiently without wading through mountains of information. Progress will depend on vendors stepping up and realizing that improvements in performance management only come once the tools have the company’s overall performance in mind.

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