McKinsey Quarterly on Web Services: "The substantial investments in Web services that players such as IBM, Microsoft, and Sun Microsystems are now making have convinced some observers that this technology will soon be a reality. Others point to the significant remaining hurdles: key technical standards still haven't been finished; specific services and new service providers have yet to be defined; and, perhaps most important, questions such as consumer privacy and security remain unanswered."

Web Services and Business Processes

While Web Services are helping to set standards for software, there are also moves to create standards for business processes like ebXML and RosettaNet. One of the drivers for this is that it is now becoming critical to have data flow across organizational boundaries through the value chain. Having standards will help streamline the exchange of information between enterprises.

Stuart Johnston, writing in XML and Web Services magazine, on the thinking in connecting web services and business processes:

In the past, business processes have been automated and managed using proprietary technologies that involved a high degree of customization. Whether in a document workflow or process automation environment or using application integration technologies, traditional approaches were well suited for automating high-volume production processes that justified the substantial consulting costs associated with such projects.

But most typical business processes remain unautomated, lacking a standards-based approach for establishing machine-to-machine interactions that would enable easy development. Today, with the emergence of XML Web services standards, the opportunity arises to extend the benefits of process management to a far wider scope of business problems, both inside and outside the firewall. Using Web services technologies as implemented in software platforms and special-purpose products, enterprise developers and even business analysts can now "orchestrate" component services from disparate sources into complex applications and business processes that can be readily implemented and modified.

In the new model of the agile enterprise, software should be componentized for easy reuse and adaptation in service-oriented architectures. Orchestration is business logic that sequences, coordinates, and manages conversations among Web services. To program a complex activity—a process workflow or an online transaction, for example—orchestration technologies make it possible to logically chain discrete functions into interenterprise business processes, allowing them to take advantage of the quickly growing ecology of Web services.

Writes David O'Riordan in Web Services Architect (April 10, 2002):

Web Services technology promises to change this by replacing proprietary interfaces and data formats with low-cost, ubiquitously supported standards for interfaces and data that work as well across the firewall as within it. The first generation of Web Services technology, though, has largely focused on the messaging foundation supported by SOAP and WSDL. While this foundation is sufficient for some internal application integration needs, it is not sufficient to support the complete automation of critical business processes. This requires the ability to specify workflow, security requirements, transaction management, and other critical information related to the business process context. Such information is generally specified in a business process model.

Two of the significant efforts to create the new lingua franca for business and being seen as the successors to EDI are ebXML and RosettaNet.

ebXML (the eb stands for electronic business) is sponsored by UN/CEFACT and OASIS. It is "a modular suite of specifications that enables enterprises of any size and in any geographical location to conduct business over the Internet. Using ebXML, companies now have a standard method to exchange business messages, conduct trading relationships, communicate data in common terms and define and register business processes."

RosettaNet, is "a consortium of more than 400 of the world's leading Electronic Components (EC), Information Technology (IT), Semiconductor Manufacturing (SM) and Solution Provider (SP) companies. RosettaNet drives collaborative development and rapid deployment of Internet-based business standards, creating a common language and open e-business processes that provide measurable benefits and are vital to the evolution of the global, high-technology trading network.

Business process standardisation is likely to take longer because businesses have a natural tendency to differentiate themselves from one another, thus putting an upper limit on what can be standardised. But the efforts are in the right direction, and adoption of business standards can be especially useful for small and medium enterprises.

Oracle revolutionised the world of databases by its adoption of the then standard (SQL). As web services and business processes converge towards standards, similar opportunities of market leadership exist in enterprise software.

Tomorrow: The Real-Time, Extended Enterprise