A Decision Model for Optimizing the Service Portfolio in SOA Governance
Yukyong Kim, Jong-Seok Choi, and Yongtae Shin
Dept. of Computer Engineering, Soongsil University, Seoul, Korea
{yukyong, jschoi, shin}@ssu.ac.kr
AbstractEffective service-oriented architecture (SOA) gov-
ernance requires an appropriate process in place by which
services described by a service model become candidates to en-
ter the service portfolio. This is a planning for the appropriate
identied services to create business agility and maximize reuse.
Not all services in the service model can be realized in the form
of IT solutions, so if our intended use of the service portfolio is
to drive IT development planning, we must rst decide which
services are potentially realizable and which services are not. In
this paper, we present a decision model to evaluate the services
based on the proposed metrics. Comparing the relative value of
each service with its development or maintenance cost should
make the prioritization. The decision model is useful to support
an approach to identifying the optimum portfolio of services
based on the prioritization of business needs, followed by an
estimation of the technical feasibility for each candidate service.
Keywords-Service portfolio management; service evaluation;
SOA governance; service lifecycle
I. I NTRODUCTION
Service-oriented paradigm is increasingly important to
support agile organizations for fast changing business pro-
cesses. SOA is a set of principles and methodologies for
designing and developing software in the form of services.
Services are the basic constructs to facilitate building of
business application in a more exible and interoperable
manner for collaborating between enterprises. Since the
services provide better utilization of functionality and they
reduce the development of redundant systems across the
enterprise, service-oriented computing requires to manage
services more effective. A strong and well-dened gover-
nance process ensures that those services become assets,
or building blocks, that can be leveraged to develop new
systems more efciently and effectively to meet the orga-
nizations business needs. Thus it increases the need for
good governance as it will help assign decision-making
authorities, roles, and responsibilities and bring focus to the
organizational capabilities needed to be successful [1]. Once
identied, and clearly dened, the governance process will
help to manage the lifecycle of the service from initiation,
through maintenance, and ultimately until the service is
retired.
SOA governance is the meta-decision system that an
organization puts in place to manage and control decisions
related to SOA. Without governance, an organization has
no control over decisions made by the people who design,
57
develop, test, implement, and use services, and their efforts
can quickly spiral into chaos [2]. One of key activities that
are often mentioned as being part of SOA governance is
service portfolio management (SPM). SPM is dened by
a set of processes and techniques to measure and score
SOA investments steadily against business goals such as cost
reduction, IT simplication and process agility. The purpose
of SPM is to maximize the value of SOA investments and
assets to the organization. Thus SPM plays a vital role to
maintain SOA alignment with business, maximize reuse,
make timely investments and manage effectively change.
Service portfolio is the set of services from the business
service model that are planned to be or have already been
physically realized in the form of software assets. As the
data foundation for each service, the service portfolio should
maintain the attributes such as service description, business
case, value proposition, priority, risks, offerings, packaging,
costs and pricing. The attributes are evaluated throughout
the lifecycle of the service project, from strategic analysis
of a new service until the service is retired [3]. Thus SOA
governance should include an appropriate process in place
by which services dened by the service model become
candidates to enter the service portfolio. Not all services in
the service model can be realized into IT solutions. When
the service portfolio is to drive IT development planning,
we rst decide which services are potentially realizable and
which services are not.
In this paper, we discuss an approach to identify the
optimum portfolio of services based on the prioritization
of business needs, followed by an estimation of the fea-
sibility for each candidate service. The proposed decision
model is to evaluate services based on the strategic benets
by comparing with its investment cost and the worth of
development. Our work means to complement the existing
governance standard, such as SOA governance framework
[4] by creating a reasonable service development priority.
The paper is organized as follows: The next section
reviews research on SOA governance and service portfolio
management, and Section 3 sketches our decision model
including a method to provide development priority for
services by comparing the relative value. We evaluate our
model using its application undergoing requirements change
in Section 4. Finally, we conclude in Section 5.
 II. R ELATED W ORK
Due to the distributed nature of SOA, as services spread
over different organizations, maintaining control in a SOA
environment becomes more difcult. Effective governance
is thus critical in fostering a successful SOA initiative. The
concept of governance is emerged as a way to implement
control mechanisms in a SOA. Essence for effective SOA
governance should address what decision must be made for
effective management, who should make those decisions and
who has input rights, and how the decisions will be agreed
on and implemented. In other words, SOA governance
denes the interaction between policies, stakeholders, and
processes to lead SOA success. SOA governance processes
are executed to conduct the planning, design and operational
aspect of SOA. SPM is a set of processes and techniques that
continuously measures and scores SOA investments against
business goals. Because SPM is the SOA process of ensuring
that the organization has a set of services appropriate to
its needs, we should consider technical issues as well as
the worth of business and cost to decide which services are
potentially realizable.
Business service model is an abstract representation of
how an organization conducts its business operations in
terms of a set of business services which describes functional
capabilities exhibited by the service provider, that provide
value to service consumers. As a business service is the
smallest value unit that can be billed to a business process,
a service is prioritized in terms of the value of the business
service portfolio is supports. Once services have been se-
lected for development from the business service model, they
spend the whole of their lifecycle in the service portfolio.
Service portfolio is a real physical object, consisting of the
set of services, and represents a primary SOA asset of the
organization [5]. Figure 1 illustrates the relationship between
the business service model and the service portfolio.
Figure 1. The business service model and the service portfolio [5]
In [6], SPM is dened as the most important aspect of
the overall service lifecycle next to service consumption
and service creation. However, up to now the concept of
SPM is scarcely found in the academic body of knowledge
58
and mainly focuses on IT services. A promising approach
to further describing the area of SPM has been published
by [7]. However, their study is of limited applicability to
understanding SPM from a business perspective because
they only address software services. A method for measuring
the performance of a service portfolio has been proposed
in [8]. They aim at inductively describing the scope of
SPM by focusing on the actual measurement of portfolio
performance. SPM is also explicitly described by IT service
management, for example by [9] or as part of service
strategy in the ITIL v3 framework [10]. ITIL stresses the
importance of effectively managing the entire lifecycle of
every service from request to retirement. SPM in ITIL
is a part of service design and own section on continual
service improvement process. ISO/IEC 20000 is the rst
international standard for IT service management. SPM in
ISO/IEC 20000 is a part of planning and implementing new
or changed services [11]. Control Objectives for Information
and Related Technology (COBIT) is a framework created
by ISACA for information technology management and IT
governance. The COBIT framework is used to manage the
service lifecyle of SOA governance. It is obtained by enforc-
ing control and governance aspects of COBIT and applying
service management activities into a lifecycle approach [12].
Once the governance structure is in place, it is time to
think about the services that need to be developed. SPM
ensures that a sound method is used consistently to decide
which services need to be developed and how the necessary
investments are prioritized. Services to be developed can be
identied in a bottom-up fashion or top-down approach. A
top-down approach requires more coordination effort and
may cause resistance to change, but it leads to a more
coherent solution [2]. We will dene a method to evaluate
the technical feasibility based on development effort required
for each candidate service. Then we propose a decision
model to identify the optimum service portfolio based on
the prioritization of business needs. The proposed model for
SPM provides structure and guidance to an organization for
the task of managing its service portfolio.
III. A D ECISION M ODEL FOR SPM
In this section, we present our decision model for man-
aging the portfolio of services that can be used in order
to evaluate the development prioritization of services. In the
proposed decision model, we dene a set of metrics to select
and prioritize services with respect to cost and benets. We
conduct an overall evaluation consolidating the metrics with
relative weights nally.
A. Overview
Individual business processes can be translated directly
into business services. The business services model is a
mediator between the business requirements expressed in
process models and any implementation, including object
or service-oriented implementations. The service model de-
scribes what the functions of the business services are, while
service portfolio is a set of services that are planned to be or
have already been physically realized in the software assets.
As the service model, the business service model consists of
service descriptions, legacy assets and business goals. Actual
implemented services are the part of these services from the
business service model.
Figure 2. Overview of the decision process
In this paper, the proposed model is to deliver an opti-
mum service portfolio with respect to business needs from
business service models. The optimum service portfolio
should manage the development and deployment of a set
of services that (a) matches the value and urgency of the
associated business needs, (b) most effectively supports the
organizations business goals such as operational efciency,
protability and business agility, and (c) can be realized cost-
effectively, using the IT skills and resources available, in a
reasonable timeframe. Figure 2 shows the overview of the
decision process on the proposed model. In Figure 2, the
labeled arrows represent that (1) service evaluation standards
are dened by business goals, (2) each service is evaluated
by the service evaluation standards , (3) if the service is
worthwhile for developing, the service is comprised in the
service portfolio, and (4) each service in the service portfolio
is evaluated for maintaining. The process is described in
details as following:
To effectively manage service portfolios, we evaluate
whether the identied service is realizable via measuring
multiple features of the service in the business service
model. If there are no other considerations, the services that
offer high benets and at the same time have relatively low
development or deployment efforts would take the highest
priority to be developed. From those points of views, we
consider both of cost and benets as evaluating criteria
dened by business needs. Because SPM is the process for
identifying and approving the future development of services
to expand the service portfolio, we have business needs as
well as a business service model as input. Gathering business
needs is to understand the organizations consensus on busi-
ness vision, strategy, focus areas, objectives and investment
priorities to dene which areas of the business should receive
the most attention, and in what priority. Business needs are
showing the critical focus areas within each business domain
(business unit or division). Once business needs and business
service model are dened, an overall prioritization process
starts. There are three steps for one round of evaluation.
Step 1. Dene the Service Selection Criteria.
At rst, it is primarily needed to investigate how well the
service will be implemented with respected to its ROI. There
are various factors such as the business and technical benets
as well as cost. Those factors can be criteria for business
processes, quality of services (QoS), and conformity to all
over the system. In the proposed model, the Service Selection
Criteria (SSC) for evaluating service priority is a set of
metrics measuring the business value, the technical value
and the cost as shown in Figure 3.
Figure 3. Service selection criteria
Step 2.. Evaluate services.
This step conducts an overall evaluation of the identied
services by normalizing the metrics values with their relative
weights. We assume that the organization that manages a
portfolio of various specialized software services based on
a certain platform and is thus able to offer each customer
a tailored software solution. Because once services have
been selected for development and then they spent the
whole lifecycle in the service portfolio, the development of
each service technology should consider technical factors
corresponding to the business value. We consider then the
prot maximization based on the evaluation result.
Step 3. Select and prioritize services.
We can decide which services are realizable from the
set of business services being measured. After the initial
set of candidate services being dened, we can adjust the
structure of service portfolio using the iterative scoring
process. Moreover, the optimal portfolio of physical services
is identied using the prioritization of business needs based
on evaluation score. The process for constructing and pri-
59
oritizing the service portfolio should not be considered as
a one-off event. Rather, it should be an ongoing dynamic
process to ensure the continued vitality and maturity of the
service portfolio.
B. Service Selection Criteria
In this paper, we dene the SSC, for assessing services
with perspectives on how valuable in business and how
suitable to develop services are. The SSC is dened by the
set of metrics measuring the business value, the technical
value and the cost.
1) The Business Value: The SSC is a standard to select
the set of realizable services from business services. For
each service, we consider three factors of SSC such as
consequence, perpetuity and usage frequency to evaluating
its own worth on the business process.
Consequence. How the service play an important role
in their business domain. The more the important role,
the higher the worth of consequence.
Perpetuity. It represents how long the service is con-
tinuously used to the system. The longer the service is
used, the higher the possibility of usage in future.
Usage Frequency. It means how many times the func-
tionality is performed by the service is used. The more
frequently usage of the service, the higher the business
value.
For business values, the stakeholders assess services with
SSC to distinguish valuable services, on a ve point scale
(VL, L, M, H, VH) corresponding values 1 to 5. While VL
is the lowest value and is equal to 1, VH is the highest
value and is equal to 5. Each factor of SSC has an relative
importance and the relative weight depends on business
needs under the condition that the sum of the weights is
equal to 1. Then the business value bv of a service i is
evaluated by Equation (1):
  kj 
bvi = wk (1)
5
1k4
1jn
where wk is a relative weight of the factor k, kj is a rating
value of the factor k by a stakeholder j, and n is the number
of stakeholders. In order to normalize by scaling between 0
and 5, ve into each kj is used. Table 1 shows an example
of the elicited result about business values. In Table 1, ST
means a stakeholder. The number in the bracket shows the
relative weight of the factor. For example of calculation, for
k = 1, we can get wk =0.3, and kj = (5, 4, 5, 3, 4). Then,
0.3 55 + 0.3 45 + 0.3 55 + 0.3 35 + 0.3 45 = 0.3 +
0.24 + 0.3 + 0.18 + 0.24 = 1.26. Similarly, the result is 1.52
for k = 2, and 1.32 for k = 3. Then bv = 4.1.
2) The Technical Value: For either the quality or the
whole system view, each service can be assessed whether
it is appropriate or not for the system. However, it is impos-
sible to determine suitability of the service unless it realize.
60
From this point of view, we dene a technical value as a
technical feasibility to develop the service. Thus we consider
the complexity as a factor to evaluate the technical value.
Higher levels of complexity in software increase the risk of
unintentionally interfering with interactions and so increases
the chance of introducing defects when making changes.
As the complexity of services increases, the development
and maintenance of them would increase exponentially, and
it would get to a point where it would be impossible to
understand all of them. Moreover, the complexity affects
the quality and development efforts of software. To evaluate
complexity of business services, we can adopt complexity
metrics for business process models such as control ow
complexity, nesting depth, jumps out of control structure
and cognitive complexity dened in [13] and [14]. Due to
the number of factors that contribute to the complexity, we
cannot identify a single metric that measures all aspects of
a business services complexity. Different metrics within a
metrics suite are associated together to gain a more accurate
overview. Once the complexity is evaluated, normalization
is needed to let the result of the measurement have the value
within the range of 1 to 5. Typically, for complexity metrics,
the higher value means the more complexity. However, the
service with the higher complexity has the lower technical
value. In order to avoid ambiguity, we preserve the meaning
as a minus sign in the objective function.
3) The Cost: With business value and technical value, the
cost is one of major factors to select and prioritize services.
We dene the cost metric from the development effort of
the service. Each service in the service model is catego-
rized into one of the service technology types. The current
range of technologies available includes automated process,
conversational service, wrapped legacy system, composite
services, and transactional services. As a general rule of
thumb, the relative degree of effort required to create each of
these service types is, in increasing order, as the following:
transactional services, composite services, wrapped legacy
system, conversational services, and automated process. That
is, fully or partially automated processes make more efforts
than the transactional services type. Which means automated
processes cost much more than the transactional services
type. In a similar way to the business value evaluation, the
metric value on a ve point scale (VL, L, M, H, VH) implying
Table I
A N E XAMPLE OF E VALUATION ON B USINESS VALUES
Assessment Criteria
Consequence Perpetuity Usage Frequency
(0.3) (0.4) (0.3)
ST1 VH H H
ST2 H VH H
ST3 VH H VH
ST4 M M H
ST5 H H VH

the values of 1 to 5 is assigned to them. Consequently, the
automated processes type has a value 5 and the transactional
services type has a value 1.
C. Negotiation
To assign the weight to each factor of SSC, stakeholders
rst make a list of SSC according to the relative signi-
cance to business goals. They are usually from the same
organization or have similar understanding of the business
domain. However it is not always they are in agreement.
The difference in opinion manifests as a high variability of
elicited values. The variability could be due to either the
inherent uncertainty present in the business domain or the
fact that stakeholders are not completely in agreement with
each other regarding the denition of factors. To minimize
the variability of elicited values, the specic process we use
is self-evaluations with regard to their understanding of the
impacts of the SSC, on a scale of four points (dont have
any idea, have some idea, have a reasonable idea and services.
have a good idea) [15]. We provide all stakeholders with
the range and comment information, and then ask them to
review their ratings. The purpose of this process is to give the
choice to stakeholders so that they rescue themselves from
rating due to their lack of understanding about the impacts
of the SSC. One way to test how many stakeholders come
to an agreement is the concordance evaluation. For example,
we can use Kendalls coefcient of concordance [16]. The
coefcient is a measure of the arrangement among several
judges who are assessing a given set of n objects.
D. Formulating the scoring model
The selection and prioritization of services for construct-
ing and managing the portfolio of services can be formulated
as a linear 0 1 programming model that can be solved to
optimality. The prot maximization objective is composed
of the business value generated by four factors minus the
complexity and the cost. Using the notation given in Table
2, the objective function Prot is dened as follows:
P rof it = M ax(S1 , S2 , ..., Sm ) (2)
, where Si = (wbv bvi ) (wtv tvi ) (wco coi ) for 1 M, H, VH) and assigned relative weights to each factor of
i m subject to
m
 and source codes, we calculate the control ow complexity
wbv + wtv + wco = 1 and coi coj (3)
j=1
The value Si calculates the scores of the business services
to select candidates having higher value, while satisfying
the constraints denoted in Equation (3). The variables wbv ,
wtv and wco are relative weights for the business value,
the technical value and the cost, respectively. Moreover,
a service should not cost more than the total cost for all
services.
Once each business service is evaluated on the business
value including the complexity and the cost, they are ranked
Table II
N OTATIONS FOR THE SCORING MODEL
Notation Description
bvi The business value of the service i
tvi The complexity as a technical value of the service i
coi The cost for developing the service i
wbv Relative weights of bv
wtv Relative weights of tv
wco Relative weights of co
m The number of services
in order of high value. As the score, we can decide the
candidate services for constructing the portfolio. The score
is also useful to set the prioritization of the development
or management. When the business need changes or the
organization manages their assets, the scoring process can
be executed again. The scoring model, through its idea
of quantication of business and technical values, helps
to structure the problem for selecting and prioritizing the
IV. E VALUATION
To evaluate the proposed model, we measure and compare
the score of a portfolio consists of application services. The
goal of our experiment is to conrm the validity of the
score as a factor of service selection. When a set of services
changes, their score should vary according to the degree of
changes for business needs or domains. We used a generic,
self-developed Java software framework for implementing,
conducting and analyzing our experiments. The experiment
is to conrm the correct selection from a service population.
Our test bed is an on-line DVD rental system (DRS)
composed of 27 services. We prepared 100 services includ-
ing DRS services with their UML Activity diagrams and
source codes. At rst, to rate business values, 100 service
descriptions including DRS services were registered on our
service registry using jUDDI with MySQL. We replace the
service name with a serial number to avoid the exposure
of 27 services. Stakeholders are 15 senior engineers who
are afliated to a consulting engineering company. They
voted the business value of all services on a scale (VL, L,
SSC. Then we calculated bv. Using UML activity diagrams
of all services based on McCabes cyclomatic number. To
decide the cost, we categorized all services according to the
standard of the service technology types.
For 100 services, we calculated the score based on
Equation (2). Figure 3 shows the distribution of the score.
We choose and analyze 22 services possessing high ranked
scores shown in the dotted rectangle of Figure 3. There are
19 correct services among them and thus the accuracy is
86.3%. However, we should pay attention to three out-of-
selection services. They have very high complexity com-
paring with other services. Their bad score come from the
61

Figure 4. The distribution of the score
complexity. To compare the inuence of the complexity with
other factors, the business value and the cost, we adjusted the
relative weight, namely wbv , wtv , and wco . When the weight
wtv for the complexity is under 20%, those three services
are included in the selection. To the precise measurement,
we need a systematic approach to assign the relative weights
between measuring factors.
V. C ONCLUSION
SOA governance requires an appropriate process in place
by which services described by the service model become
candidates to enter the service portfolio. This is a planning
for the appropriate identied services to create business
agility and maximize reuse. Not all services in the business
service model can be realized in the form of IT solutions,
so if our intended use of the service portfolio is to drive IT
development planning, we must rst decide which services
are potentially realizable and which services are not. In this
paper, we propose the approach to identifying the optimum
portfolio of physical services based on the prioritization of
business needs, followed by an estimation of the feasibility
for each candidate service. To achieve this goal, we present a
scoring model for prioritizing services based on the proposed
metrics. Comparing the relative business value of each
service with its development or maintenance cost should
make the prioritization. Our work means to complement
the existing governance standard such as SOA governance
framework by creating a reasonable service development
priority. The proposed model is validated by its application
to DRS services to verify its correctness in estimating the
importance.
ACKNOWLEDGMENT
This work was supported by the ICT R&D program of
MSIP/IITP. [10044556, The development of network tech-
nology in defense infrastructure for high quality convergence
service].
62
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