Radically Transforming Your Business through Embedded Services

Invention and innovation are very different things. An invention is a new technology, concept, or process that improves upon previous technologies, whereas an innovation is the application of that invention to radically change the way things are done. In practice, innovation often lags behind invention, what ZapThink calls a “horseless carriage” mentality in which people tend to think of new technologies in the same way that they have applied older technologies. After all, it’s hard to conceive of new ways of doing things when the old way has become so familiar.

Just as with the automobile, which underwent several years of innovation before it moved beyond being a carriage without the horse, Web Services and Service-Oriented Architectures (SOAs) are now entering a period of innovation. And as with the automobile, which transformed our cities, our lives, and our landscape, SOAs promise to transform business. The problem, however, is that it’s hard to conceive of the ways that new technologies will transform day-to-day life when the only benefit you can think of is one less horse to feed.

Innovation: the Key to Transformation
New technologies only transform their environment when people work through all of the value propositions that innovation can provide. It was by no means obvious in 1900 that the automobile would lead to freeways, suburbs, and shopping malls! The problem we have today with Web Services and SOAs is that companies are consistently applying and thinking of Web Services and Service-Oriented Architectures in the way they have traditionally thought of previous distributed computing technologies, such as the Web, EDI, CORBA or DCOM. The problem, of course, is that they are misapplying SOA and Web Services technology. The invention is a better way to do distributed computing; the innovation is the change in the way that we build and distribute our business processes.

Because of this short-sighted application of technology, companies are still trying to find the “killer app” for SOAs — the application of the technology that will provide significant value-add that is clearly better than the existing technology status quo — and possibly radically transform their business. Simplified integration, legacy enablement, and Service reuse are the evolutionary, short to medium-term goals of SOA, but the radical, innovative application of SOA is quite different — namely, the business-to-business (B2B) embedding of business processes on a global scale.

If the Web Isn’t About Brochureware…
When people first became familiar with the World Wide Web and the associated concepts of hyperlinking and HTML, many first thought of it as a means to expose their documents to a wide audience. Indeed, many companies first used the Web as an electronic brochure. These firms, however, saw only limited benefit from using and adopting the Web, since they were applying their one-way print or fax-based ways of thinking to the two-way, interactive Web. It took companies like Amazon.com to show the world that there was indeed a different way of thinking of the Web — not as a one-way flow of information, but as an extension of the business that can provide 24/7 global reach to customers that no other medium before it could have done. In this way, the Web provided radical business transformation. The inventions were HTML and HTTP, the innovation was eCommerce.

So, just as the Web isn’t simply about a better means of distributing marketing information, then Web Services and SOAs aren’t simply about reducing integration complexity or doing CORBA better. Businesses are struggling to understand how Web Services and SOAs will provide significant value-add to their business, but many are thinking about the wrong value proposition. The key to understanding how SOAs will radically transform business is to understand how the Service abstraction layer changes the way that companies develop, expose, and consume business processes in a B2B environment.

The Embedded Business Process
All businesses offer products and/or services for sale. However, most companies don’t simply define themselves as the products or services they carry, but rather the impact that their offerings have on their customer — in other words, their value proposition. In addition, these products or services must be incorporated into the other company’s business process in order to be truly of value. For example, FedEx is not just an overnight package carrier; they provide global logistics and communications for companies to satisfy their customers, partners, and other third-parties. FedEx must be part of a company’s purchasing or logistics process in order to deliver a differentiated value proposition.

However, traditional forms of integration are unable to realize this value proposition. Most companies implement integration as an arm’s-length activity where their own business processes are isolated from their customers’ or partners’ business processes. As such, when these companies consider implementing Web Services or SOA, they only see limited value — that of reducing the cost of that arm’s length integration. But companies really don’t want integration at arm’s length — they really want their products or services to be embedded within their customer’s business processes. In effect, this is a true form of “business process outsourcing” where a company’s customers extend their business processes to include their products and services. Such embedding is where the true transformational value proposition of SOA lies.

SOA enables embedded business process in two key ways. First, SOA mandates that companies consider their application functionality to be location independent, loosely coupled assets that Service consumers can compose as needed. Such Services must be secure, policy-based, and reliable. These capabilities allow companies to build Services that are not simply front-ends to back-end processes, but that they can also embed into their customers’ systems. Second, SOAs enable companies to build processes that are composed as Services, and in turn, exposed as Services, which means that an entire business process can be exposed to customers, without sacrificing the ability to modify that process in a loosely coupled fashion.

The Requirements for Embeddable Business Processes
While Services that are embedded in a company’s business process aren’t technically different from Services they access in an arms-length fashion, those embedded Services have certain requirements in order to meet customers’ needs. First and foremost, those embedded Services must be truly loosely coupled. This means that if a company embeds a third-party Service in its procurement process, the third party should be able to make significant changes to the Service without either breaking their customers’ business processes or requiring their customers to change how they access the Service.

Just as importantly, those embedded Services must be reliable. Companies won’t be able to embed a Service into their critical business processes if it works 90% of the time. These Services need to work 100% of the time. Service providers must therefore build embedded Services to an exceptionally high quality standard. Clearly, companies should also once and for all drop the notion that SOA is a synchronous, request-and-reply technology. Companies should be implementing SOAs that are asynchronous and typically event-driven. There’s no other way that companies can even hope to get the reliability needed to make their Services embeddable.

Finally, embedded Services must take into account not only their own security and access policies, but also the policies of the processes in which they are embedded, as part of a trust relationship that covers all of the companies involved. At some point, therefore, companies will have to consider implementing policy negotiation in which Service consumers and providers can select the best policy to apply from a list of allowed execution patterns. Interestingly, business-to-business specifications like ebXML had this sort of capability in mind when they were first conceived over five years ago, but it has taken until now for companies to realize why this is so key to making embeddable business processes work.

The ZapThink Take
Companies who are struggling with trying to understand the value proposition of Web Services and SOAs must look carefully at how they are applying the technology. It is short-sighted to consider SOAs to be merely a way to reduce the cost of integration.SOAs in the B2B context, when they are loosely coupled, secure, policy-based, and reliable, provide a more compelling and transformational business value proposition.
Once companies realize the value of embedding companies’ business processes into their customers’ or partners’ business processes, SOAs will as significantly and radically transform their business, as the Web did in the last decade.

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