Monday, December 3, 2012

Understanding Business Services 2

In December 2006 I blogged on the topic of Explaining SOA to the Business Audience. It started out “I note resurgent interest in LegoTM blocks as a metaphor for explaining to the business audience the value of SOA. My advice is don’t treat the business audience as dummies!” The blog goes on to explain business services using the Laundry metaphor, and how business people get the concept because they understand “services”.


However, while my explanation was and remains perfectly OK, I will be the first to admit that I have moved on. The basic service model works perfectly, but in today’s fast moving, business innovating world, we need new vocabulary that is even more compelling, that goes beyond SOA and transactional efficiency.  

In their book Competing for the Future [1], Gary Hamel and C. K. Prahalad advise that traditional business responses to market and competitive pressure such as reengineering, downsizing and outsourcing are inadequate and insufficient. The outcome of this activity is typically just keeping one step ahead of declining margins and profits of yesterday’s business. Instead senior management need to get off the treadmill of restructuring and reengineering and instead reinvent their industry, imagining and creating their future.

What I didn't say in 2006 was that you don’t reinvent an industry by analyzing business processes! The business process is “how” the enterprise works. Instead we need to be looking at “what” the business is - business services, the external, composite offering that enables core capabilities to be used in many different contexts. We need to elevate the concept of Business Service to the level of business offering and business product that externalizes the enterprise capability. I suggest simple definitions as follows:

Business Service: A service provided by an enterprise to its ecosystem of customers, suppliers or partners that provides one or more capabilities that facilitate a discrete business outcome according to a contract.  Example: Amazon EC2 
Business Service Operation: An execution of one or more capabilities provided by an enterprise to its ecosystem of customers, suppliers or partners according to a service contract. Example: Data load under Amazon EC2.

In Table below I have summarized some of the Hamel Prahalad strategies and shown how these are implemented as Business Services.

Hamel and Prahalad go on to pose the question, “Why did it take US automakers 40 years to decode the principles of lean manufacturing pioneered by Toyota?” Answer – because those principles challenged the core assumptions of US auto executives.

I suggest we need to establish a business centric perspective of Business Service that is as closely linked to business offering implementation as it is to the internal SOA. This will cause us to challenge some of our core principles and assumptions. It's NOT about LegoTM, it's about business services and business agility.

[1] Gary Hamel and C. K. Prahalad , Competing for the Future, published by Harvard Business School Publishing, Reprint 1996