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October 10, 2003

BSP First-to-Market Opportunity

Many businesses are taking advantage of the Web services architecture to become business service providers (BSPs). Before jumping headfirst onto the BSP bandwagon, it's important to understand, articulate, locate, and pilot your service offering. Here's how.

by Stewart McKie

What do Scandinavian Airline Systems and Den Danske Bank — the largest commercial bank in Denmark — have in common? They are both part of the emerging world of business service providers (BSPs) — businesses that use Web services to bring new kinds of utilities to their employees, business partners, and customers.

We often forget that Web services aren't just about technology and technology providers. They open up an opportunity for any business to become a BSP. Being a BSP doesn't mean you also have to be an Internet service provider (ISP), which delivers commodity services like an Internet on-ramp and email. Nor does it mean hosting and renting out third-party applications, as in the application service provider (ASP) model.

Unlike an ISP, a BSP provides a noncommodity service that is unique to that business. And unlike an ASP, this service offering isn't a hosted application but a component designed to be integrated with both internal and external applications. Airlines, banks, utilities — you name it: Every business can be a BSP.

It's true that being a BSP requires choosing the right technology to build, deliver, and manage Web services — but that's not the focus of this article. Instead, I will outline a way to examine the BSP business proposition so you can figure out whether or not it makes sense for your business. I also will discuss some of the common issues and expectations of BSPs.

Why Be a BSP?

Every business, whether it provides products or services, probably has some unique value that could be exposed and delivered as a Web service to stakeholders in the business. For example, most businesses have some form of content stored in information systems that could generate benefits if exposed to other systems that serve employees, business partners, or external consumers. Amazon.com and eBay offer a vast range of items for sale that other online storefronts could search to source and buy consumer items.

BSPs In Action: Scandinavian Airlines

Scandinavian Airlines System (SAS) uses Web services to provide better customer service via handheld devices, including mobile phones and PDAs. People can use the services to check flight status, download a personal timetable to a PDA, and rebook flights.

Eventually these first-generation services could be supplemented by new, combined service integrations that deliver a single offering. For example, SAS could use a combination of services to help prevent customers from missing their flights. By combining real-time flight status, local traffic conditions, and customer location information with map-based distances and driving instructions, customers could be better advised how to reach the airport on time.

Dun & Bradstreet and TRW have databases of business credit rating data that loan processing, ERP, and CRM systems could use to make better customer decisions. And FedEx and UPS have logistics and shipping information that supply chain management systems could use.

The trick is making this content programmatically, securely, and reliably accessible to service consumers through application programming interfaces (APIs) using nonproprietary protocols, which is what simple object access protocol (SOAP)-based Web services offer.

Simply put, Web services expose content to selected business stakeholders. For some businesses, these stakeholders may be users within the organization; for others, they may be a community of business partners, unconnected businesses, or individual consumers. The process of becoming a BSP thus starts by identifying a service proposition based on some function or content that can be exposed and delivered as a Web service to a stakeholder.

Although it'd be great if Web service offerings became profitable in their own right, there are other reasons to become a BSP. Web services can raise your business's profile by making your function or content more visible through Web service brokers, or by offering it as a component that can be used as a snap-in by third-party Web portals or Web sites.

Offering a Web service can also help your business better retain, gain, or regain customers. Airlines that can automatically deliver flight information as text alerts to handheld devices via a Web service, for example, are likely to have an advantage over those that require you to make a call to find out if a flight is delayed, has landed, or can accommodate your changed travel plans.

Supply chain-related Web services let you work more closely with your business partners to exchange business documents, check inventory levels, or look up the latest pricing data. In the world of multiparticipant value chains, providing these kind of services can mean the difference between being able to participate in a value chain or not.

Many products and services that are currently delivered physically are likely to be available via Web services soon, which will help process efficiencies and create new repetitive subscription-based revenue streams. Content — such as articles, e-books, music, software, and videos — is a natural candidate for these kinds of Web services.

Becoming a BSP may be the next step in offering your customers higher-quality self-service capabilities. Better self-service, in turn, can help lower your costs further and improve the quality of service. Businesses that replaced Web-enabled and phone-based service with Web form-based self-service have been able to reduce or redeploy service representatives and provide anytime, anywhere servicing capabilities that many customers prefer. But this first generation of self-service still left the burden on individuals to find and use the self-service options manually — often outside of the application context in which they needed the information. Web services take self-service to the next level by allowing applications to serve themselves automatically, repetitively, and with minimal human intervention, within the context of a specific business process.