I must admit, I'm tossed up over acronyms and jargon in the Spend Management world. As a marketing person, I love 'em. Heck, there's nothing better to confuse a market into thinking something is differentiated when in reality, a new letter combination is just a different twist on something that already exists. But as a former English major, I abhor them, as they intentionally cloud language and mislead (taking George Orwell's logic, poor language leads to poor thinking). Seriously, and I know this will get Tim Minahan and others riled up, but as an example of the power of acronyms and jargon to distort reality, how different are the terms "On Demand", "ASP", "hosted" and "SaaS" from each other? In reality they're not that far apart -- but they certainly confuse a lot of people (and sell a lot of applications) in the process.
So I'm on the fence when it comes to most acronyms. But SOA, or service oriented architecture, is something unique and new. The term SOA refers a new type of enterprise software environment that transcends the monolithic systems of record of yesteryear. Wikipedia defines SOA as "loosely coupled software services [that] support the requirements of the business processes and software users. In an SOA environment, resources on a network are made available as independent services that can be accessed without knowledge of their underlying platform implementation. A service-oriented architecture is not tied to a specific technology. It may be implemented using a wide range of technologies ... The key is independent services with defined interfaces that can be called to perform their tasks in a standard way, without the service having pre-knowledge of the calling application, and without the application having or needing knowledge of how the service actually performs its tasks."
In the Spend Management world, Rearden Commerce is the posterchild for SOA. But in the coming years, we'll certainly see other types of SOA approaches to process management that go beyond basic requisitioning and services management. And in most cases, they'll take the form of applications which are loosely stitched together by companies themselves, rather than offered by third party providers (talk about a new "roll your own" model). Over on ZD Net, you can check out Joe McKendrick's post on both the challenges of SOA awareness and the great prospects that it can bring to companies.
Consider a case that suggests by using SOA approaches, procurement and operations teams will be able to "monitor progress and issues from various enterprise inputs via dashboards or portals. Decision makers can be alerted to a potential supply chain disruption in California, for example, and rev up production or orders to suppliers elsewhere to meet any shortfalls ... If there ever was a "killer app" to prove the value of SOA methodologies and technologies, this is it." I would certainly agree but, according to the same post, given that "53 percent [of companies] admitted they just don't have enough general knowledge about SOA" and "Forty-eight percent said they aren't familiar enough with the internal IT resources required to migrate to and support SOA" widespread adoption is probably far off, despite the billions in R&D and marketing that SAP and Oracle are tossing at SOA.