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March 8, 2002

Ready, Set, Compete

Web services promise to fill gaps in strategic business apps for the purpose of collaborative commerce. How can you take advantage?

By Stewart McKie

Forget the technology hype and the welter of new acronyms. Web services are, in fact, the next wave in business process automation (BPA). From a business perspective, the benefit of Web services is that they provide a new way for you to enhance, extend, or even reengineer the capabilities of your current strategic business applications for BPA — those expensively acquired CRM, ERP, and supply chain management (SCM) systems.

EXECUTIVE SUMMARY

Stewart McKie

Web services are potentially the next major advance in business process automation. Their business value lies in the ability to extend or enhance the processes already managed by existing CRM, ERP, and supply chain system investments. This article discusses Web services from a process automation perspective and outlines emerging solutions for using Web services to support collaborative commerce.

Potentially, that means a better return on your investment and a better solution for users in your organization, especially those engaged in collaborative commerce. The question is, what can you do now to take advantage of them?

SERVICE COMPONENTS

For the purpose of this article, a "Web service" is business functionality delivered programmatically via the Internet. A hosted application rented for a monthly fee by an application service provider is not a Web service. Nor is a Web site that provides a service after you register, pay a fee by credit card, and manually type in your service request via an online form. A real Web service is business functionality run from a service provider's Web server using a request and response process between two applications managed via the service API. The service deliverable could be a piece of data (such as a currency exchange rate), a document (such as an invoice), or a file of transactions (such as orders placed via an online marketplace), among other things.

Web services are similar to functional components delivered as product code in that they expose an API to provide other applications access to the service, much like a COM component or CORBA object. The difference is that Web service components are not installed locally; rather, they are hosted on the service provider's remote servers and managed by its IT resources — unlike the typical product components used by most BPA systems, which are delivered in the form of add-on functions or as custom-built code by resellers or consultants.

Similar to components, Web services are designed to enhance a larger application. However, unlike components, they are loosely coupled: They are called on demand and not installed with the rest of the local product executables.

In theory, Web service components should require fewer resources to maintain than conventional ones and offer a better value proposition in that they are only used when needed. However, they can also be less reliable and secure because they are subject to the vagaries of an Internet connection and data transmission beyond the firewall. Indeed, security is among the biggest challenges facing Web services developers.

BPA SYSTEMS AND WEB SERVICES

Web services are highly complementary to BPA systems because the latter manage many strategic business processes. Furthermore, they are infamous for having functional gaps in their process automation capabilities, and vendors usually can't keep up with the demand for "enhance and extend" functionality from customers. (See the sidebar, "Jumping on the Bandwagon.") Web services, initially supplied by third parties and eventually supplied by the strategic business app vendors themselves, are ideal for use as process "gap fillers" — ideal, that is, if the application is Web service-aware, which of course few, if any, are.

There are two key issues to keep in mind when you begin to investigate Web services. First, you'll need to find services you can integrate with your applications and be able to administer these service subscriptions easily. Second, you'll need to be able integrate them with processes managed by existing product technology in which you have invested a great deal of time and money.

One approach used by at least one ERP vendor to facilitate using Web services for BPA is to create a special service integration module, installed locally, that communicates with a vendor-managed remote service broker hub on the Web that in turn communicates with a selected group of Web services providers. When the local installation is upgraded with the new service integration module, a range of Web services are exposed to specific parts of the application, controlled by metadata downloaded from the remote service broker hub. Requesting a Web service then becomes as a simple as a button click from a standard application form, allowing that service to be fully integrated within potentially any business process managed by the application.

The service broker hub manages the request and response process both with the local application and the remote service provider using a workflow engine. This hub also makes it easy for businesses using the BPA application to go to a single place to find, subscribe to, manage, and monitor their Web services via a user portal, and to be sure that the only services they will find there are both suitable for, and integrated with, their local applications. (See Figure 1.)

A single sign up and single billing relationship is another important benefit of this service broker hub; nobody will want to enhance a process with multivendor Web services if it adds more administrative burden than it takes away. Public Web service directories such as UDDI.org are potentially useful, but would you rather call someone you don't know to help you do a search on the Internet, or just go to your private files? It seems inconceivable that every BPA application vendor won't be operating its own private service directory within a year or two.

WEB SERVICES FOR PROCESS ENHANCEMENT

Many examples exist of simple Web services. Here are three of them:

  • CRM: Dun & Bradstreet offers an address verification service called GlobalAccess that checks and completes the addresses of prospects or customers to enhance the sales pipeline management process.
  • ERP: Oanda.com provides a currency exchange rate download service for automatically importing the latest set of rates before running month-end processes such as multicurrency revaluation or consolidation reporting that requires the translation of multicurrency transactions into a single corporate currency.
  • SCM: UPS offers a shipment tracking service for determining the cost, whereabouts, or receiving party of a specific package to enhance and extend the order fulfillment process and enhance visibility into the shipping subprocess.

By combining services like those I've described, even simple Web services have the potential to significantly enhance or extend existing business processes. (See Figure 2.) Using Web services for BPA is not about using one service but leveraging the ability to loosely couple many services into a process that adds real value. That's why we are steadily moving toward a scenario in which many applications will become product and service "hybrids" where locally installed product functionality represents the legacy system and most new functionality is implemented as a Web service and sold via the vendor's service delivery hub.

It's harder today to find providers that deliver a set of services designed for use at different points within a single, larger business process such as selling online. For example, if you run a Web storefront, you'll ideally need services you can access to upload your inventory and customer data into the storefront from your ERP/CRM system and download orders from the storefront into those systems. Only a few storefront vendors, such as ShopServer, can provide these capabilities as Web services at the moment.







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