How IT-strategy shapes services

In order to meet customers’ demands in today’s marketplace, corporations must continuously rework their processes for efficiency and innovation. The side effect is an increasing complexity, especially on the boundary between business and IT. It has been proposed that a Service-Oriented Architecture based on coarse-grained services, each supporting an individual activity in a business process, will enable more efficient business process redesign. However, fundamental questions as how a service is defined in terms of size and semantics are often left open, and only vague descriptions of the strategic and business consequences of a coarser or finer grained service exists.

I had the opportunity to conduct my Master Thesis together with Peter Sundling at Handelsbanken IT during October 2006 through March 2007. The research was conducted at the division for architecture and IT-strategy, CDXX. It was truly interesting to investigate such a hyped topic as SOA, and elucidate the problem of service granularity.

The objective of the thesis was to factorize the notion of service granularity, explicate how the factors are interrelated and explain how an organization’s strategic view on IT affects the optimal service abstraction level in a Service-Oriented Architecture (SOA).

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Download the entire thesis as pdf from Linköping University Electronic Press


Today’s competitive business environment forces companies to introduce new product and process innovations at an increasing pace. Almost every aspect of the modern business is supported by information technology systems which, consequently, must evolve at the same pace as the business. A company’s strategic view on IT reflects the strategic importance of IT in the organization, both in terms of the opportunities IT is expected to create and the commitment to IT the business organization is willing to make.

SOA is an emerging concept which aims to structure IT in a more flexible manner. The basic idea is to encapsulate distinct units of business logic in reusable services, which can be combined to support business processes. The term service granularity refers to the amount of logic contained in a service. Even though there is immense hype around SOA today, the concept of service granularity is still relatively unexplored. The service should be coarse-grained enough to be reusable, but at the same time specific enough to fit the process. Most SOA literature avoids the subject as being too implementation specific and seldom makes any attempt to concretize the rather abstract term.

The research was conducted at Handelsbanken, which for years has worked with serviceoriented principles. The researchers have been given the opportunity to closely analyze the bank’s service initiative. In order to gain an understanding beyond merely technical aspects a rich case study was built, based on interviews with professionals at all levels of the organization.

The research objective was divided in three parts. The first part was to factorize the notion of service granularity, or in other words to find a number of factors which together precisely describe the granularity of a service. The second part was to explicate how the factors are interrelated, i.e. how changing one factor will affect the others. The final part of the objective was to explain how an organization’s strategic view on IT affects the optimal service granularity.

It was found that an organization’s strategic view on IT affects the amount of complexity the organization is able to handle, limiting the optimal SOA granularity, which can be precisely described using three factors: reach, range and realm. Reach defines the locations and people the service is capable of connecting, range defines how much functionality the service offers, and realm defines what kind of functionality the service offers.


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