How much of their IT budget are companies allocating for strategic initiatives such as SOA?
One of the ongoing challenges for business today is finding ways to do more with less. Companies are under relentless pressure to deliver products and services to market faster, better and cheaper than ever before. Investments in IT are expected to drive the business forward, not only in terms of gaining efficiencies and increasing responsiveness, but also in creating new top line opportunities.
Ironically, most corporate IT organizations allocate 75-85 percent of the annual budget just to "keep the lights on." At the same time, research shows that the average utilization of a typical server is 15-25 percent. While these figures may not reflect every organization, they highlight the fact that there is a great deal of inefficiency in IT today, which consumes large portions of a budget that could be put to better use for more strategic initiatives.
What is driving this inefficiency? While there is no single cause, much of it results from mergers, acquisitions, or functional silos within the organization – all of which contribute to a bloated IT infrastructure, rife with overlapping and duplicate applications and systems. In the face of tight deadlines and the ongoing demands of the business, IT often opts to live with these redundancies – integrating systems where necessary to keep them consistent. While this approach may result in quick time-to-delivery, it severely inflates recurring costs.
While some IT organizations may be content with this status quo, executive management sees "aligning IT with business" as its number one IT-related concern. However, with as little as 15 percent of the budget available to service the changing needs of the business, IT just doesn't have room to maneuver. These problems are quite common and not specific to any one industry. Clearly a fundamental change is required.
It's this realization that is leading many organizations toward a service-oriented architecture (SOA), an approach to architecting the IT infrastructure that eliminates redundancy and accelerates project delivery via consolidation and reuse of services (these services are often referred to as Web services). SOA allows an organization to effectively leverage existing assets rather than forcing them to create yet another redundant silo for each business need. This, in turn, also makes IT more efficient, allowing for shorter cycle times and quicker project delivery – further helping IT align with the business.
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