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The Business Side of Web Services

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Kalakota and Robinson explain why web services technology is only one part of building comprehensive self-service portals. They elaborate on the growing practice of architecting business processes outside-in.
Ravi Kalakota and Marcia Robinson are the authors of Services Blueprint: Roadmap for Execution (Addison-Wesley, 2003, ISBN 0321150392). This article was adapted from the book.
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Is there too much hype surrounding web services? Business users and managers have yet to show much interest in web services or any of the innovative technical features that excite vendors. Nor do they appear to care about core integration technology. They do, however, seem to care about the end goal of web services: delivering better IT-enabled services to their customers.

Vendors need to adjust to this reality. Many are currently leading with the XML technology and web services message. They need to switch tactics and emphasize that service platforms create business value. Vendors have to focus on the business side of web services.

Defining Digitized Services

The old cliché is that every business is a service business, but what exactly constitutes a service? We define services as a set of focal points—customer self-service or employee self-service—that helps organize the hundreds of business processes that underlie every company, regardless of industry.

Services are what customers see. They force you to step outside the business and ask questions such as these:

  • What customer needs do we satisfy now? What needs could we satisfy?

  • What's the gap between what we do now and what we should be doing, and how do we bridge that gap?

This line of questioning is called outside-in thinking. Every services strategy begins with understanding the difference between what a company provides and what customers or employees need—often two quite different things.

A services approach fundamentally differs from the traditional form of business process analysis, which is more representative of inside-out thinking. In inside-out thinking, companies examine their business environments through the lens of their internal products and existing processes. It's human nature to look from the inside out, but these companies become trapped in their own experience and focus on improving existing ways of doing things.

The inside-out approach works well for back-office activities; however, with customer-facing services, the key words are user needs and flexibility. New services are often created faster than IT can respond. As a result, the ability of IT organizations to immerse themselves in the mind of the customer and constantly look for ways to satisfy emerging needs is a foundation for agility.

What does all this talk of inside-out and outside-in approaches mean for you? We hypothesize that firms that take a services approach (outside-in) will begin to distance themselves from businesses that take a pure process-automation approach (inside-out). To better understand this distinction, let's look at one area that's mushrooming in importance: customer self-service portals.

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