The Service Oriented Business Model
After a decade of working to realize the benefits promised by Service Oriented IT Architecture (SOA), a new and exciting evolution of service orientation is taking place that is impacting and benefiting entire communities of consumers and businesses – the Service Oriented Business Model (SOBM).
Many of us in the IT industry have been excited about SOA as a positive, disruptive innovation for quite a few years now. It didn’t take long for those who were early adopters (and who suffered the wounds and bear the scars!) to extend the service oriented concept to enable a Service Oriented Enterprise (SOE). “Services” in the SOE were primarily internal – HR, purchasing, facilities management — and the benefit of thinking of the enterprise as a SOE was that it facilitated more effective business-to-IT alignment.
Now, McKinsey & Company has published their Ten Tech-enabled Business Trends to Watch:
Trend 1: Distributed cocreation moves into the mainstream
Trend 2: Making the network the organization
Trend 3: Collaboration at scale
Trend 4: The growing ‘Internet of Things’
Trend 5: Experimentation and big data
Trend 6: Wiring for a sustainable world
Trend 7: Imagining anything as a service
Trend 8: The age of the multisided business model
Trend 9: Innovating from the bottom of the pyramid
Trend 10: Producing public good on the grid
One of those trends— # 7: Imagining anything-as-a-service—caught my attention because it illustrates just how “disruptive” the concept of discrete services (SOA) has become and how the SOE has enabled new business models and opportunities for growth.
In this article in the McKinsey Quarterly, the authors point out that the SOE strategy is being extended to an ever-widening range of business services – where the consumer of the service pays only for what they need or use, and where new revenue opportunities are realized by re-purposing existing services and assets.
Most of us are familiar with SaaS (Software as a Service) offerings like Google Apps, SalesForce, and dozens of others. But a rapidly increasing trend is the availability of non-IT “services” including buying transportation by the hour (ZipCar), instead of buying a car. More and more companies are creating and marketing new services based on business capabilities they originally developed for their own purposes. They’re generating new sources of revenue from components of their internal corporate value chains – McKinsey dubbed this strategy “unbundled production”.
This disruptive view of assets and of physical and intellectual capital creates new opportunities for arrays of high-value service offerings – new opportunities for many businesses to evolve to a new level of Service Oriented Enterprise and to adopt a Service Oriented Business Model (SOBM).
I’m going to talk more about this business trend on the Strategic IT Architecture site and about how we as IT professionals can provide a tremendous value-added service to our companies. We’re well positioned to enable our enterprise to leverage a SOBM whenever it offers opportunity, by applying the practices we’ve honed while implementing SOA.
