Information Technology Reference
In-Depth Information
is split into initial investments and continuous investments to investigate on potential
consideration of timing or lag effects. Examination on investment evaluation also
reflects the distinction between quantitative and qualitative aspects influencing an IT
manager's investment decision.
3 Case Analysis
Case 1 - Banking Group
The company is an Austrian banking group with a total of more than 2000 branches in
Austria and the bank's strategy is focused on retail customers.
The touch point for SOA was the idea to integrate separate services from different
technologies into a singular platform. Over the course of development the focus has
shifted to business process management. Back then, cost savings were not an issue for
the group because of its good financial performance, however, due to the financial
crisis, cost pressure has become more severe and the need to reduce costs has sud-
denly emerged. Key business processes have been identified and categorized in their
respective fields based on their automation potential, eventually it is planned to cover
all the key processes in the bank with SOA, despite the fact that it was stated by the
CIO that services reuse was very hard to achieve with SOA due to the high degree of
services customization. Initial investments into the new SOA framework were primar-
ily based on qualitative aspects and didn't require any quantitative measurements,
whereas continuous investments needed a 5-year ROI calculation. Continuous in-
vestments were primarily based on automation potential, e.g. process execution time
is measured
“by standing behind the account manager with a stop-watch”
, Qualitative as-
pects are not measured for continuous investments; moreover no calculations for
potential future benefits of the investment are required. Based on the interview, the
company is satisfied with its measurement techniques, and the measurements they
deliver are
“rather precise”
.
Case 2 - Telecommunications Group
The company's core business includes all aspects of mobile communication ranging
from telephony to data transmission. It holds a strong market position in the Austrian
market and is present in 8 countries in Europe. Altogether, the group serves approxi-
mately 20 million customers and employs approximately 20,000 employees. First
SOA attempts were carried out in 2004 to eliminate excessive utilization of resources,
increase transparency and reduce time-to-market, which is crucial to success in the
dynamic and fast-paced telecom sector. A major benefit which has been realized
with the first SOA implementations was the enablement of enterprise-wide communi-
cation in terms of a bridging between IT and other departments. There is no overall
strategy behind the company's SOA initiatives to transform the whole architecture
service-oriented; it is primarily used as a connecting layer between different silos with
standard software, e.g. ERP or CRM systems. In terms of initial SOA investment
evaluation mostly qualitative aspects on the benefits side of the equation have been
used. Investment decisions were solely driven by the IT department; therefore no
business case had to be calculated. All continuous IT projects are usually initiated by
a change request coming from the business side, which requires a static business case
containing a 5-year total cost of ownership calculation. In cases like automating
