SOA and cost reduction

Will SOA lead to cost reduction? Recently I followed this discussion (answers on the question) amongst some of my colleagues. Well on the long-run this may be one of the drivers to adopt SOA, but an enterprise will need to invest upfront. In adaption of SOA investments in legacy systems are not down the drain. SOA is not applied inside enterprises to rip and replace all legacy systems. Functionality inside legacy systems can be exposed and there is a plethora of technology available today to do it. Eventually hard maintainable legacy can be replaced gradually, not instantly. This will take some time and is not done overnight. In long run this could mean reduction of costs having modernized, easy maintainable systems.

One needs to invest to adopt SOA, therefore it is probably better to speak in terms of return of investment than of cost reduction. In past I have read many article and blog posts where ROI in SOA is hard to assess. If it is hard to assess, than how will SOA lead to cost reduction equals positive ROI. There are some SOA ROI calculators offered by IBM and TIBCO. IBM for instance calls their calculator IBM SOA Business Analyzer. Besides calculators there are many systems integrators, consultancy companies and so that have enough knowledge and experience to assess ROI, although no company or SOA to implement are the same.

ROI is interesting, important aspect of SOA and you can find a lot of information about it on the internet. I myself have not yet been in a situation, where I had to advice an organization about adoption of SOA and discuss or assess ROI. I usually participated in a later stadium of SOA project, where implementation had already started and Microsoft technology was used. My interest lies more in technology than with the business, but I do not ignore business side of things. Discussion like this for me is very helpful to have a better understanding of business drivers for SOA.