“Dormant Potential for SMBs”

What exactly are Web Services?

Web Services is the generic term for a group of new technology protocol standards that significantly facilitate Web-based data exchange and the integration of existing applications in the Web. Put simply, Web Services are functions that can be invoked via the Web for linking applications. In technical terms, Web Services are standards that the W3C Consortium has been promoting for the past few years. During that time, three basic prototypes have emerged. These include SOAP (Simple Object Access Protocol), a message exchange format, and WSDL (Web Service Definition Language), which describes interfaces based on XML. UDDI (Universal Description, Discovery and Integration), a register in which Web Services can be listed and searched for, almost like in the Yellow Pages, is also used. It is therefore not unreasonable to describe Web Services as the future of e-business or ‘Internet Esperanto’.

A 2002 study from Forrester says that users consider lack of security to be Web Services’ main drawback. What advances have been made since then?

Security is of course a fundamental issue in information technology. The general principles of confidentiality, authorization, integrity and authenticity also apply to Web Services. Assuming that a company uses Web Services to communicate with customers and suppliers, then it is in that company’s interests that these criteria are met. However, in the recent META Group study “Web Services Deployment Trends”, we found that security – alongside a lack of budget – remains the number one obstacle to introducing Web Services.

Consortia such as WS-I (Web Services Interoperability Organization) and OASIS (Organization for the Advancement of Structured Information Standards) are working constantly on security standards and guidelines. But despite all the efforts that are being made to enhance the security of Web Services, there is no such thing as 100 percent security.

How can SMBs use Web Services to optimize their processes?

The onus here is on software providers. Since larger SMBs generally have an ERP system, but do not have the staff and financial resources to undertake major integration projects, ERP systems must be opened up vis-à-vis Web Services. This is why SAP specified all the interfaces in mySAP ERP as Web Services. This was accompanied by large program blocks being divided into smaller, more flexible modules. Doing this requires a corresponding infrastructure offering, which SAP provides in the form of the SAP NetWeaver components. The result is a comprehensive, Service Oriented Architecture which enables different applications to exchange data easily via standards, promising major potential savings in B2B business processes.

If for example inventory levels are made available as a Web Service, suppliers, wholesalers and customers can integrate this information into their systems, enabling processes such as dispatching new materials, ordering additional products to match increased demand, or simple repeat orders to be automated. Both aspects reduce the effort required to communicate and speed up business processes.

Speaking of Service Oriented Architectures (SOA), what are these, and what significance will they have for SMBs moving forward?

A Service Oriented Architecture is a mandatory requirement for implementing Web Services. Only an architecture that focuses on services rather than data can break applications down into components and, thereby, services. These can then be made available via a network. Such an architecture can also provide the scalability necessary to integrate new systems and applications in future and keep pace with the growth of the company.

The greatest challenge in constructing a Service Oriented Architecture is not in fact the technology that makes such services available, but interlinking these services with the company’s unique structures and processes. The architecture defines which services are located where. For instance, this enables one user to use several different systems (SCM, ERP, CRM, E-Procurement) simultaneously, since authorization concepts transcending individual applications are reused and made available as services. This can force companies to rethink and, where necessary, adapt their structures and processes.

How do SMBs go about using these types of application successfully in future?

SMBs certainly need to have a well-defined strategy in order to use Web Services successfully, i.e. in a way that makes business sense. There is no one correct path, since the SMB scene is strongly fragmented and different Web Services implementation scenarios apply for individual sectors such as automotive, financial services or high tech. It is essential that Web Services are implemented in the form of a project where the roles and responsibilities of those taking part are clearly defined.

As a general rule, SMBs should implement Web Services step-by-step. Issues regarding security and interoperability in data exchange must be resolved in advance. A “roadmap” could specify an initial implementation of Web Services in pilot applications. This restricts the implementation of Web Services technologies to relatively simple fields of application with the emphasis on company-internal integration. The second stage then tackles Web Services integration projects with business partners or suppliers. However, these should be of a manageable level of complexity, and should not attempt to integrate all business partners or suppliers at once, but accomplish this gradually.

Can SMBs make significant savings by implementing Web Services?

There are in fact some interesting potential savings for SMBs dormant in Web Services. For a relatively modest outlay, not only can various business processes be connected across corporate boundaries, but internal integration scenarios can also be realized, since data can be exchanged freely between applications and interfaces. In contrast to Application Service Providing (ASP) for example, instead of an entire software program being made available over the Internet, the data is transferred as a Web Service. What makes this model interesting for SMBs is that it enables legacy systems, for example, to be modernized relatively inexpensively and integrated into new solutions such as Supply Chain Management (SCM) or Customer Relationship Management (CRM).

SMBs who implement Web Services are guaranteed to reduce the number of media changes and manual processes. In addition, existing systems can be drawn on to perform new tasks, for example linking to customers and suppliers, which protects existing investments. In both cases, Web Services make for faster, more effective processes, enhancing companies’ flexibility and agility, both of which are also key success factors for SMBs.

Dr. Andreas Schaffry
Dr. Andreas Schaffry