As the hype surrounding Web services gains momentum, many CIOs are reacting with skepticism and concern. But Web services do offer real business benefits. By breaking down enterprise applications into shareable components-known as services-each of which performs a different task, organizations can connect applications within or across companies or enhance the functionality of existing applications. (See "Make Way for Web Services," Emerging Technology, Oct. 15, 2001.) Web services use public standards such as XML, which allows them to provide a much lower cost and more flexible approach to connecting applications than traditional approaches like EDI or EAI. They also make it easier to coordinate business activities, especially across enterprises, leading to lower operating costs, significant savings and attractive growth options.

CIOs need to find ways to gain experience and reap some of the benefits of this new technology without exposing the enterprise to undue risk. The most promising way to do that is to keep it simple, keep it incremental, and learn, learn, learn.

Keep It Simple

Data: By focusing on specific, event-based information that directly affects the actions of the enterprise, CIOs can help to simplify their company’s approach to data sharing. For example, Dell Computer was seeking to lower the inventory in its supply chain through more focused information sharing with its partners. The company aimed to fulfill orders within five days of receipt, but it took its suppliers up to 45 days to fulfill them. Since Dell and its partners all operated on disparate systems, information sharing was very labor intensive. For this reason, Dell used to carry inventories of up to 30 hours in its factories as a buffer against unexpected disruptions in the supply chain. Rather than trying to impose a common technology platform as a means of achieving transparency across its supply chain, Dell is now using Web services to provide limited visibility through the automatic sharing of simple event acknowledgements, such as notification when a product is shipped on time. By giving Dell more timely notification of potential disruptions in supplies, this approach lets the company work around them-before they become real problems. The bottom line: Dell has been able to reduce its raw materials inventory to just three to five hours.

Protocols: The key challenge in integrating across disparate systems is getting divergent applications-not to mention divergent frameworks like CORBA and DCOM-to talk with each other. An alternative approach is to use very simple protocols such as SOAP (simple object access protocol) or FTP to just move the data from its source application, such as a manufacturer’s forecasting system, to its target application, such as a supplier’s MRP system. Once the data is at its target application, simple scripts can be crafted to insert the data into the application for use. By focusing on transferring specific data as opposed to invoking applications, it is possible to allow incompatible environments to work together.