SOA muddying the CRM buy vs. build dilemma

By Barney Beal, News Director 27 Sep 2007 | SearchCRM.com

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Service-oriented architecture (SOA) holds the promise to change the debate, said John Radcliffe, research vice president with Gartner Inc.'s Stamford, Conn.-based firm. Companies have long faced an either/or decision between buying packaged software with best practices and out-of-the-box functionality built into it or developing their own application with the flexibility to build according to need and differentiate processes from competitors.

"The promise of SOA is this nirvana where you potentially get the best of both worlds," Radcliffe told attendees at a workshop during the summit. "Can you? It's obviously not that easy. The way vendors are evolving their technologies [will] give you a lot more possibilities [for] getting functionality and building it in."

The evolution of CRM and SOA is a journey that will ultimately take five, maybe 10 years, Radcliffe said. Yet, it's one that has already begun. Just look at the IT landscape five to 10 years back, when vendors built monolithic stovepipes in "the stack," claiming they had done the integration work to see how it has changed. Now, vendors are touting service-oriented architecture, composite applications and Web services.

CRM vendors approach SOA Each of the major vendors in the CRM market has its own approach to service-oriented architecture. John Radcliffe, a Gartner analyst, offers some perspective and predictions on each.   Oracle: is releasing its first AIA applications on Fusion in 2008 and will  probably see some early adoption among manufacturers in 2009 with more industry-specific functionality and mainstream adoption of Fusion in 2010, he said.   "One possibility is there will be two stacks -- applications unlimited and Fusion -- and potentially you can reduce one while increasing the other one," Radcliffe said.   SAP: changed its tack significantly after its release of mySAP ERP 2005 and CRM 2006s, which were stepping stones to SOA, said Radcliffe. SAP customers wanted stability and the ability to sit on ERP 2005 for five years before another upgrade. So, instead of delivering business process platform versions of NetWeaver, CRM and ERP this year, the existing applications are written in its traditional ABAP code and wrapped and service-enabled with new functionality delivered through "enhancement packages," allowing for an "SOA by evolution." SAP will introduce NetWeaver 7.1 next year, which was used to build Business ByDesign. Microsoft: with its Titan release (which will be generally available in 2008 both on-premise and via SaaS) is .NET-based.   "It starts making use of Windows foundation," Radcliffe said. "It does have the benefit of being metadata-based and well designed for exposing Web services and allowing you and partners to build upon. It hasn't been built around a strong applications platform. It's quite modern but has a ways to go."   Salesforce.com: is also built on a modern, metadata-based design.   "The company's Apex transactional language has allowed Salesforce.com to define new Web services and have transactional control as well as allowing them to integrate with others," Radcliffe said.

"What we're moving to is the 'service-oriented bazaar,'" Radcliffe said. "You're going to have to learn a lot more about the applications platform, the middleware [that's] sitting underneath these applications of the future. IT is going to be more complex."

SOA is also blurring the line between build versus buy. That was good news for Joe Levin, senior manager of marketing with Vernon Hills, Ill.-based CDW Corp., which sells computers, primarily to private businesses and public sector customers and has seen rapid growth over the past 10 years. CDW has built many of its own systems and Levin was at the conference for some guidance on whether the company was following the right path when it comes to packaged CRM applications.

"Leveraging best practices is critical and one of the themes I've been hearing here is balance between proprietary and third-party systems," he said.

The major CRM vendors have all begun their own journey toward SOA, Radcliffe said. And with good reason. Ultimately, SOA will reduce the costs of integrating their acquisitions (with Oracle particularly) by easing the maintenance load. Additionally, it speeds up their time to market, allowing vendors to provide incremental functionality improvements without the headaches of major upgrades. SOA also offers faster verticalization and easier integration of processes, applications and other data sources within a vendor's own products, as well as with its ecosystem of partners, with competitors and with custom applications.

SOA and the UI

Finally, SOA is facilitating the development of the next generation of user interfaces (UI), which have evolved from mainframe terminal UIs to client/server to portals and Web browsers to browsers with Web 2.0 technology like Ajax. Vendors are moving to rich client UIs, Radcliffe said. SAP, notably, has moved from a portal-based UI to one based on its Customer Interaction Center interface and a new UI for its Software as a Service (SaaS) CRM product and A1S, now named Business ByDesign, its new SaaS suite for the midmarket. Oracle also unveiled a new task-based UI as part of its Siebel 8.0 release.

"There's also been a blending of functionality with work-related applications and consumer- and work-related content and applications delivered through a common UI," Radcliffe said. "Duet is a good example. They're saying: 'If your world is Office and that's your typical interface, but you want access to an SAP system, we can do this.'"

Ultimately, major ecosystem vendors like IBM, Oracle, Microsoft and SAP AG are building out their SOA platforms and encouraging smaller firms to work within it.

"You'll see a lot of the innovation coming not from the big players, but from best-of-breed people who have a much easier way of plugging in to what the big boys are doing," Radcliffe said. "It doesn't mean the end of best-of-breed players. If anything, it means new opportunities at extending what the big players are doing."

Vendors are also starting to capitalize on packaged composite applications, SAP with its xApps and Oracle with its Application Integration Architecture using the BPEL Process Manager.

For more on CRM and SOA See how SAP and Oracle diverge on the path to SOA See why Gartner says not to focus on CRM failure

"The end game is the business process platform, an underlying business services repository where the business logic sits waiting to be used," Radcliffe said. "Are we there yet? Definitely not today. We're on PowerPoint."

But that won't stop vendors from pushing the SOA message. Many organizations will start with CRM as they try to consolidate global instances of the application and look to differentiate from competitors rather than with, say, an ERP application.

"Don't get carried away by the hype," Radcliffe warned. "SOA does have all these wonderful promises. It's going to take many years before a business process platform style reaches this level of maturity, but you do need to start preparing. It's inevitable."

Companies building their own SOA need to begin with pilot projects and choose an SOA infrastructure, Radcliffe advised. Those buying need to consider when their CRM application vendors will be ready for a business process-style SOA, whether they can implement in stages and what the long- and short-term values are. For those compiling an SOA based on existing applications, building their own and using composite applications, they need to see how they can leverage their existing applications, how much infrastructure they will need to buy and determine how it fits with their long-term strategy.

"As we get into next year and the next few years, there will be a hybrid SOA, for example, coexistence of Siebel and Oracle Fusion," Radcliffe said. "Over time you will retire one and bring in the other. Not until 2012 -- and we could be talking a long time before people will have pure, full SOA packages. The reality is it will be this hybrid situation for years to come. "

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