Investigating the Potential of Service Oriented Architectures to Realize Dynamic Capabilities

Abstract

The paradigm of service-oriented computing (SOC) has emerged as an architectural approach to flexibility and agility, not just in systems development but also in business process management. There is, however, a paucity of critical research assessing the strategic impact of SOA on the competitiveness of organizations. Some research literature in strategic management indicates that firms may gain a competitive advantage in rapidly changing market environments by concentrating on their dynamic capabilities-i.e., product flexibility and agility in organizational transformation in response to rapidly changing market conditions and customer requirements. The intent of this paper is to analyze the conduits through which service-oriented architectures (SOAs) may exert influence on dynamic capabilities within firms. The results could potentially assist in evaluating if and how the adoption of service-oriented architecture may help achieve key dynamic capabilities, giving the enterprise a competitive edge.

Service Oriented Computing in Practice – An Agenda for Research into the Factors Influencing the Organizational Adoption of Service Oriented Architectures

“…The last of the studies by the authors of this paper links SOA to the concept of dynamic capabilities, a concept in strategic management that research scholars indicate may help firms gain competitive advantage in rapidly changing market environments [46]. The concept of dynamic capabilities is a widely accepted approach to understanding the competitiveness of organizations.…”

“…Little is known, however, of how SOA aligns with the strategy of the organizations adopting SOA. There is some academic literature relating to the potential strategic value of Web Services and SOA [30], [34], [44], [46] and other empirical studies are emerging [4], [51], [75]. Three of these studies stand out as potential stage-setters for future research and are discussed in the following paragraphs.…”

“…There is a lot of work to be done in understanding how organizational strategy aligns with and drives the choice of SOA as an enterprise strategy. Existing frameworks linking SOA to performance and competitiveness [30], [45] could be applied to real world situations and tested. Some interesting questions to explore in this area include -what organizational strategies does SOA provide a good fit for, can the value proposition of SOA be aligned with the value proposition being pursued by the organization, and even how does an SOA-based infrastructure help companies with different competitive strategies?…”

A Review of Leveraging Private Cloud Computing in Financial Service Institutions: Value Propositions and Current Performances

“…The tactic value proposition emphasizes agility in business processes, which enables dynamic capabilities by a flexible plug-and-play model [18]. The agility is represented in three aspects: process flexibility, portability, and adoption [14].…”

Organizational Constraints to Realizing Business Value from Service Oriented Architectures: An Empirical Study of Financial Service Institutions

“…By virtue of being the underlying enabler of the core business processes, information technology is very critical to achieving this agility [9]. Technology infrastructures built on service oriented computing principles appear to facilitate business process and, subsequently, organizational agility [13]. The paradigm of Service Oriented Computing (SOC) views whole business functions as modular, standards-based software services.…”