Friday, March 20, 2009

Service Portfolio Management (SPM) - An essential practice in SOA Governance

Last week, I attended a briefing that a vendor had put together to preview their solution strategy for SOA Governance. There wasn't anything new or different in their presentation. Like other vendors in this category, their approach was based on the same common division of design-time vs. run-time governance, with no provision around SOA portfolio planning & management.

This denotes a narrow view of SOA Governance shared by many vendors today. Unfortunately, it is a fundamental gap that contributes to an awful lot of SOA hiccups and failures (i.e. poor capabilities around business value measurement & alignment, increased costs in SOA adoption, service delivery delays, SLA violations, planned vs. actual reuse)

In terms of SPM, the following trends can be observed in the current SOA ecosystem:

  • Some vendors place SPM under "design-time" governance. This doesn't make any sense, because design-time governance focuses on the IT aspects of service lifecycle management. SPM is a practice to maximize the value of SOA investments & assets to the organization (program/financial management).
  • Most repository vendors have positioned their products as an SPM solution. I have a couple of issues with that:
    • Repositories are implemented by teams with narrow view of SOA assets and limited understanding of SPM requirements. They are not designed for SOA portfolio analysis & optimization.
    • They are metadata repositories, primarily designed to manage architectural assets and artifacts, and targeted towards architects & developers. Business executives & SOA program managers need to capture/aggregate different kind of data and require different kind of analysis & reporting in their role.

  • Finally, a lot of consulting vendors take a cursory look at SPM at best. Most do a good job of delivering an initial plan and a service portfolio, but rarely do they prescribe any guidance around continuous & proactive service portfolio management, and linkage with other practices such as APM & PPM...

So, what's SPM?

There is more to SOA assets than WSDLs, XSDs, design documents, etc.

There are different categories of SOA assets such as capital resources, human resources, technologies, architecture, service, service provider... and within each category, there exist different asset types (i.e. design model, ESB, ESB administrator). Investment in the assets needs to be measured & balanced against business priorities.

SPM is a set of processes and techniques that continuously measures & scores SOA investments against business goals (i.e. cost reduction, IT simplification, process agility). The intent is to maximize the return of SOA assets & investments to the organization.

As an example, it involves the following activities:

  • Service portfolio inventory & planning – maintaining an inventory of services including prioritization based on business value & strategic fit, service availability, service plans, provider information, subscription costs, billing, terms of service, policies, SLAs, etc
  • Financial planning & management - capturing & aggregating the necessary data to do a better job at:
    • Planning for SOA investment (i.e. budget, resources, vendors…)
    • Financial analysis at different levels of granularity (i.e. development lifecycle, project, program)
    • Estimating average cost & efforts for initial delivery of services, service change requests, etc
    • Modeling subscription cost, service reuse incentives, and chargeback
    • Usage management, billing, and reporting
  • Service sourcing – making informed decisions about sourcing (i.e. build vs. buy, on-premise vs. SaaS)
  • Asset Management – tracking all SOA assets, perform utilization analysis, TCO…
  • etc

In a typical organization, SPM sits between PPM & APM as follows:

As projects are submitted and loaded into PPM, a review process takes place to assess project's SOA relevancy, and identify project's service needs. Service demands are input to SPM, and an analysis is performed against the service portfolio, service pipeline, available resources, and other related information to estimate costs, delivery date, service reuse, ROI, ... and determine the optimal way of fulfilling the demand. [n.b. In some cases, enhancements to existing services may actually trigger new projects from SPM to PPM.]

On the right, APM maintains an inventory of existing applications, costs, future plans, etc. This information is used in service realization decisions. The objective is to fully leverage existing assets. so depending on the analysis, appropriate decisions and constraints will be documented and forwarded to downstream groups (SOA architecture team). Similarly, APM may trigger SOA projects in PPM.

From a solution tooling perspective, in addition to APM & PPM, an SPM tool would integrate with an SOA repository to help with service portfolio decisions.

So, why should we care about SPM?

I touched on this briefly in a couple of posts on LinkedIn.

Majority of SOA implementations are struggling to demonstrate and manage business alignment. I think the reason for this is partly approach, partly tooling, and partly the definition & prescription for SOA Governance. I have already touched upon these issues above. So, let's consider the following example.

In a typical organization, lots of roles, perspectives, and groups are involved in SOA delivery. Each role is focused on their specific activities, uses its own repository, and applies its own methods for tracking, management, and reporting:

This makes SOA program management extremely challenging, because it is often too difficult to have a consolidated snapshot of resources, demands, activities, status, costs, timelines, dependencies...So, SOA leadership team & program managers often end up making decisions without having all the necessary information. SPM enhances visibility into SOA assets.

Most organizations are struggling with SOA business justification and value reporting. Fundamental metrics such as avg cost of service, and business value indicators such as service contribution to cost reduction are partially captured at best. SPM provides a framework for continuous measurement & monitoring of key SOA metrics.


SPM is key to maintaining SOA alignment with business, maximizing reuse, making timely investments in SOA, and effectively managing change. Without SPM, there will be continued struggle with SOA change management, business costs, organizational impacts, visibility, control, etc.

"If you can't measure it, you can't manage it" – Andy Grove


Update: I am also trying a survey on this topic:
You can also participate anonymously. Once I collect some responses, I will share the results in a separate post.


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cobiacomm said...

Remember the service portfolio is the [A] in SOA, and perform regular service portfolio reviews

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