After much discussion by media and market analysts, Web Services is now starting to be introduced in corporations around the world. Last summer, my own company commissioned Benchmark Research to poll the views of 150 senior decision-makers of major corporations in Germany, UK and US on top procurement and technology issues. Over 75 per cent of the top performing companies in the survey said they had Web Services strategies in place and two thirds of all those polled said they are in the process of implementing such a strategy.
Web Services has proved to be an attractive new technology as it is relatively low-cost and can be implemented on an incremental basis. Moreover, it has the potential to solve some of the integration issues that have bedevilled corporations following their investment in enterprise software systems.
John Hagel III of McKinsey counsels companies as follows when implementing Web Services: ‘Managers should follow three principles – leverage existing technology, implement investments in stages, and plug in new elements of the technology over time – and then carefully balance the longer-term strategic and operational advantages that Web Services can support.’
The requirement to achieve real-time closing of accounts, where a company can see its financial position immediately after the quarter closes or any other specified time, is one such problem that has challenged corporations for years. Indeed, many software developers have claimed the ability to do this as a differentiator when introducing new products. Unfortunately, disparate enterprise systems across the business continue to present information in different formats on different timescales. Real-time closing has remained a long way off.
The introduction of Web Services technology will enable this to become a reality for the first time because the accounting systems will be able to take relevant ‘chunks’ of information from disparate systems across the enterprise – inventory from warehouse, sales from distribution, returns from customer service, forecasts from sales – and offer one, up-to-date view of all relevant information at any time. Many of our customers have multiple ERP systems across the business, for example, and obtaining the same format of information from each of them at the same time can be extremely time-consuming and expensive. Web Services enables them to take the relevant parts of each application and ‘glue’ them together.
Technically, this task is simple. Instead of re-coding the information from all these databases, all the information is simply rewritten as XML. This information can then be ported easily into any internet-based analysis software the company wishes to buy or develop. As standards develop, we will see documents shared across systems as well, even though they are in very different formats, through the implementation of document messaging standards such as Universal Business Language (UBL).
As organisations become more collaborative and reliant on business partners for critical aspects of the business, then Web Services can deliver even greater value as enterprises can share relevant bits of information within specific applications without the requirement to link together the whole application via expensive, proprietary communication systems such as EDI. This means that organisations can outsource and still gain real-time information on key reporting and forecasting metrics without extensive systems integration investment.
Catherine Stenson is UK marketing director of Commerce One