We have all been searching for a concrete and measurable return on our SOA investments. We've searched the internet and read case study after case study. Industry experts and SOA pundits tell us that it's there. We know in our hearts that it's there. However, we've all been in the meetings where business stakeholders and executives are not satisfied with what we believe or what the experts say. They want us to prove Service Oriented Architecture has a definitive and measurable ROI. It's an elusive problem. How do we prove to them (and to ourselves) that the proposed architecture can pay for itself?
Projected ROI is a Promise
When we are justifying a proposed architectural investment, we often project how the new design initiative will pay for itself over the coming months/years. This return is based on future projects leveraging the initiative's capabilities or reusing the foundational components. This forward-looking ROI is a prediction and it is based on the likelihood of those future projects being executed and the solution being implemented to maximize the return. In short, the projected ROI is a promise.Those stakeholders have heard the promises before and have seen them broken, too. They've seen directions change, projects canceled or implemented in ways that didn't take advantage of earlier foundations. When the promise didn't come true, the original design initiative was called out as a wasted investment and written down as a failure. When things fall short of expectations, they are remembered. These instances add up to a credibility gap that makes creating a forward-looking ROI picture difficult.
In order to combat that credibility gap, you have to call out and write down the instances where you actually experienced good returns on architectural investments. Often, these wins are overlooked because they were expected results. Meeting expectations is never quite as memorable in management's eyes as are the projects that fall short.
Realized ROI Builds Credibility
The key to building this backward-looking ROI picture is to collect hard data over a number of months that is directly related to your own business. These form your own case study where the details are easily understood by your managers. The familiarity of this data adds credibility to your arguments for future efforts.Identify the 3-5 architectural design initiatives that you have implemented over the past 18-24 months. These may be large efforts that built out heavy frameworks, or it may be smaller, simpler components that have been re-used. The size of the initiative is a function of your organizational size and its tolerance for large initiatives. Even in the most frugal environment, these examples can be found. You just have to turn over some large stones to find them. Record these initiatives along with the date that they were implemented and their implementation costs.
Second, identify subsequent efforts that received some benefit from these original design initiatives. These may come in the form of maintenance and support changes, secondary phases of the same project, or unrelated projects that re-used the original initiative. Record these benefits alongside the original initiative. Lastly, record the savings that were gained from the reuse of the original component.
Identifying the quantifiable costs and savings of the two respective efforts is the most critical task, and also the most difficult. The cost of the original initiative may be wrapped up inside a much larger project. The savings gained by the secondary effort might be hard to definitively quantify. You need to invest some effort into these numbers because you can expect them to be scrutinized later on. No matter the difficulty, you and your teams must settle on the numbers and be able to defend them when asked.
This process of identifying new design initiatives and recording actual benefits gained by subsequent implementations needs to be added into your development lifecycle. Schedule a meeting around each release cycle where development teams come to describe and quantify the initiatives and the benefits. This activity provides the hard data that is relevant and the picture that it draws is tangible.
Only by carefully recording your backward-looking wins can you support your forward-looking predictions from a position of high credibility and stakeholder trust.
Have you had an experience where you established a good return on your SOA investment? Share it with us in the comments below.
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