Whereas the dot-coms touted disintermediation, web services promise to enable a richer interplay between businesses, their partners and customers.
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|By bringing together disparate functions into composite applications, businesses are streamlining partner and customer interactions: |
- Some, like Amex, embed web-based processes into partner websites
- Others offer customers an online choice of services from multiple suppliers
- A frequent starting point is to link legacy systems into a customer service screen
- The next step is to let customers make their own selections via a web page
- It's important first to think through the business proposition
Glossary terms: composite application, API, portal, WSRP, XML, lookup tool
Instead of companies cutting out their traditional sales channels by setting up separate direct-selling websites, the emphasis today is on re-intermediation linking internal systems and external channel partners back into those online sales efforts.
Using web services technology, companies are bringing together functionality from different sources into web-based composite applications, which they deliver in customer call centers or as self-service web pages, both on their own servers and on partner sites. Done right, the integration streamlines the sales process, increasing revenues at the same time as it reduces costs, delays and buyer dissatisfaction.
It's not quite a killer app, but it comes close. The trick, according to early adopters, is to think through the business proposition well before getting mired in the details of technology integration.
Dot-com survivors are among the pioneers: online retailer Amazon recently extended its web services API so that, as well as selling Amazon's products, its many thousands of associates can now sell products of their own by embedding its shopping cart technology in their websites. But many of the trail-blazers are old-economy businesses, in both the consumer and business-to-business markets. Supermarkets are bundling up new services on their on-line grocery sites; mobile operators are selling everything from ring tones to laundry services; while in B2B, manufacturers are sharing real-time information, product configurators and order fulfilment systems with their channel partners.
Hi-tech companies like Cisco, HP and Xerox, for example, use New York-based WebCollage's Syndicator product to make sales-related services including product configuration available on partners' web sites with very little effort required on the part of the partner. Eilon Reshef, vice-president of product management and a founder of WebCollage, says that sharing customer-driven processes in this way is far more progressive than many apparently more sophisticated web services initiatives, which merely deliver raw functionality.
"When Gartner and others talk about XML web services and data web services, they are looking at exposing atomic functionality and using it to build new applications," he says. In contrast, the WebCollage platform delivers a complete application with all the process flow already built in, which partners simply embed into their own web pages.
"We provide a much higher level of functionality with interactive web modules," he explains. "These are interconnected web pages with the business logic behind them that can plug into remote portlets." WebCollage uses the web services for remote portlets (WSRP) standard, which specifies how to create multi-stack mini-application portlets.
Countless examples exist of the use to which such products can be put, particularly in complex B2B environments like the IT channel. One that is easy to visualize is the travellers' check service American Express offers to other banks. Reshef says: "Amex has sold travellers' checks for decades; but one thing it has been trying to do is to enable the selling process in banks' sites, and to do this for any type of bank throughout the world."
This is not as simple as it sounds, with different currencies and conversions, various denominations and different names on the check, but WebCollage has packaged up all those features in an API which can be made available from the Amex.com servers to any of its partners. "This is quite a sophisticated API, but the bank's web servers understand it and can tie together these interactive services," says Reshef.
The beauty is that partners do not have to understand the underlying data structure and application logic to be able to implement the sales processes. "They are only interested in the results," comments Reshef. Because all of the functionality executes on the Amex.com servers, the partner bank does not even have to implement web service calls over SOAP everything can be done using HTTP within a standard browser window.
While WebCollage's customers are delivering their own services out to multiple partners, other companies seek to aggregate services from multiple partners into a single platform. UK-based TV network British Sky Broadcasting has gone a step further with its Video Lounge service, actually fulfilling orders in some cases via web services.
Sky, Europe's fastest growing broadband digital TV broadcaster, put together the platform to allow it to sell content from other providers via its set-top boxes and the public Internet. The third-party provider simply registers its service with the broadcaster, and Sky then adds it to its menu. When a customer chooses to buy partner content, the system instantly sends a message back to the provider, and often the content comes back as an attachment.
The company used Cape Clear Studio to develop the Video Lounge and uses Cape Clear's Server to host it and to identify and deliver the content. David Clarke, a founder of Dublin-based Cape Clear and vice-president of product, says the Sky example is just one of many similar projects the vendor is now seeing develop: "What web services technology approaches bring is the ability to integrate systems more quickly and cheaply. We've encountered reluctance in the past as the acceptance of any new technology takes a while to come to the boil. But the risk seen in pursuing projects is far less as the suite of standards are now well established."
The Video Lounge project followed an earlier initiative that allowed customers to manage their own accounts via their set-top box, including signing up for new subscriptions or pay-per-view programming and viewing their account status. Cape Clear's solution brought together legacy green-screen applications for billing and customer care with newer Java-based systems for scheduling, to create a new composite application that gives customers self-service access to the various functions.
Sky, which had discounted writing the application in a traditional fashion because of the time it would have taken to complete, estimates that £200 million (approximately $320 million) of orders were put through the system in the first twelve months of use.
Many would-be adopters have been warned off using web services to complete transactions because of worries over response times and throughput, but Clarke says the experience of Cape Clear's customers demonstrates they have no need to be.
"It's important there's an adequate response time and Sky did test it thoroughly," says Clarke. "But no matter how many thousands of calls you put through it, it's not a problem. One of the most common mistakes people make is they see XML as being slow. But there's no reason it can't scale close to Java and C++ and in fact the cost and risk of writing a new application in Java for that 5 percent more performance is not worth it." In fact, when dealing with natural document formats such as orders, invoices and schedules, says Clarke, XML can be faster than traditional data processing methods.
Composite applications can also deliver improved productivity when used to streamline customer service and sales processes behind the firewall, especially when linking systems to eliminate a manual step, as in the case of Midwest Wireless.
This telecoms service provider, with more than 250,000 customers in 68 counties in Minnesota, Iowa and Wisconsin, has various service representatives who gather detailed information from more than 5,000 new or upgrading customers a month. Under the old manual process, this information was faxed to activators, who would then key it into the billing system database in a terminal-based application so that customers would be billed for services at the end of the month. But it could not set up enough terminals to meet demand and the system was not flexible enough to keep it competitive.
It used Quovadx's Platform V to help it build a web-accessed composite application that service representatives can use to configure and set up customers directly at the point of contact. Having used this system to integrate its Verisign billing database with 150 agents and 30 stores, the company calculates it saved 20,000 hours of manual entry time in 2002.
In principle, Midwest Wireless can now make that same functionality available over the Web, giving customers the ability to log in and change their service options for themselves. But before going ahead, its business managers need to decide how they want to position the self-service capability.
That's a typical challenge for companies that embark on this type of customer-facing integration project, says Cape Clear's Clarke. When Sky was designing its original self-service project, it knew it did not want to expose its internal green-screen applications to the public. To work out what it did want to display, it first had to distinguish between what the customer wants to see the "business API" and how that maps to the back-end the "technical API".
Clarke explains: "We're building a façade if you like, a new tier between what you expose to the end-user and the complex mapping to the back-end. It's an illusion [an abstraction], and our main challenge is getting people to think in terms of business APIs because they've become accustomed to thinking through the technical challenges, not what the service might look like to the end user."
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