Is standards proliferation a problem or a symptom of other problems? Perhaps it is neither. Consider the fact that it may be a natural outgrowth of increasingly complex business models and the technologies that enable them to be realised.
With this perspective it’s easy to view the standards landscape as a broad expanse of possible solutions to problems in overlapping domains. It also becomes easier to identify standards that map to the current challenges facing your organisation. Not all of them apply to you. Some address narrowly-scoped problems, while others try to cover the waterfront within an industry sector. Some standards assume specific technological capabilities; others assume nothing at all about the technology used to implement them.
The standards that actually map to your current priorities and investment plans are quite likely on a very short list.
SOA and Messaging Standards
Systems designed using the principles of Service Oriented Architecture (SOA) are increasingly common. SOA-based solutions are resilient and adapt readily to changing business dynamics. They also provide useful mechanisms to simplify complex processes. By isolating functional capabilities and offering those as services to many clients, it becomes more practical to share services across business units with uniform, reliable results.
Key to all successful SOA implementations are well-designed message formats and message-handling mechanisms.
There are many messaging standards available to the financial services industry. Only a few of them are likely to address the most important capabilities you are trying to enable in your enterprise at any given time. Of those, some may be based on older technologies that you intend to retire, others on business practices that don’t fit your organisation – leading to the realisation that you actually have very few standards from which to choose and even the best of those may only partially fit your needs.
Standards are most likely to emerge where divergent solutions to a business problem offer little or no competitive advantage. Don’t be discouraged by the fact that standards aren’t a perfect match. Even a partial fit is valuable for the intelligence it offers.
An enterprise architect’s (EA) responsibility is to guide the company to resilient, cost-effective use of applicable technology solutions, including appropriate adoption of standards. Because standards will be incomplete solutions to business requirements, and because different standards address different segments of the business, it’s important to give extra consideration to interoperability.
Messaging standards play a significant role in interoperability. Specific capabilities can be built upon a variety of platforms, which are often based on independent, narrowly defined standards.
A well-designed messaging standard is also essential when working with external partners. Intercompany communications must be reliable and the syntax mutually agreeable. More importantly, in order to manage the interacting systems, the semantic intent of the data exchange must be coherent. Documented standards provide the necessary content to support these requirements.
An independently managed messaging standard is liberating for everyone involved in these kinds of solutions. In the first place, the common frame of reference dramatically reduces the likelihood of unexpected change. In addition, no single party forces maintenance on the others due to systems changes. Finally, all parties are free to leverage the standard with other partners or in internal systems.
The decision to adopt a standard is typically part of a greater re-engineering challenge. In this respect, it is a tactical decision. At the same time it is a long-term commitment, which makes it a strategic decision.
As a tactical matter, the decision to use standards for a systems solution can be readily quantified in a cost-benefit analysis. Is it cheaper to adopt the standard, or create a custom solution to a common problem? Is it easier to directly manage partner interactions or agree on the rules of the road as directed by the standard? Are we re-engineering in order to adopt a standard, or are we adopting a standard as a way to improve the quality of our re-engineering?
As a strategic matter, commitment to a standard takes on different dimensions. Is the standard well-conceived? Is it well-documented? How stable is the standards development organisation (SDO) that manages it? How broad is adoption and what are the prospects for further adoption?
Creating and Influencing Standards
Standards development is a co-operative endeavour by its very nature. As noted earlier, standards are most likely to emerge when divergent solutions to a business problem offer little or no competitive advantage. Attempts to develop standards where any of the participants believe they have a competitive edge are quite likely to fail, or proceed slowly along very narrow pathways.
Standards evolve. Strategically, the decision to adopt a standard should be accompanied by an assessment of whether the standard can be improved and influenced. It is surprisingly easy to participate directly in that evolution, yet most organisations choose not to do so. Given the fact that standards are unlikely to map to your business requirements ‘out-of-the-box’, it seems short-sighted not to consider direct participation to improve the standard.
Standards embody the collective expertise of industry experts in a particular domain. In today’s world of complex business models and wide-ranging service options it is almost inevitable that a given enterprise will adopt and reference multiple standards that enable the enterprise capabilities that help their business thrive. This places a premium on messaging standards as part of SOA solutions.
Standards development is a cooperative effort. If you’re not part of the development effort, you may not see your needs addressed in the solutions. As a tactical matter that may be acceptable and cost-effective. As a strategic matter it may prove to be short-sighted, penny wise and pound foolish.
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