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Cutting Through the Hype: Where Web Services and SOA Are Really Working

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Businesses talk a lot about incorporating web services to save development time, leverage and integrate with legacy systems, and justify ROI by reducing headcount. But are web services improving ROI for most businesses? And where exactly does service-oriented architecture fit into the many complex workflows of manufacturing? Louis Columbus talks about the reality behind the hype.
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The move by database developers to include object-oriented programming languages has changed the scope of application development and is acting as a catalyst for web services development. Being able to define stored procedures in object-oriented languages is leading to an entirely new approach to creating workflows and supporting transactions in manufacturing and services industries.

Despite the availability of object-oriented programming languages, however, many systems still rely on file server, two-tier, or n-tier architectures. Web services, many internally developed, show what object-oriented programming tools can deliver. For many manufacturers, this starts with tying supply chains with the equivalent of hand-built adapters that cannot scale across all the transactions the manufacturer needs. Many manufacturers are holding onto their hand-built adapter strategies to integration, just as web services are starting to prove themselves. The bottom line, however, is that web services work for integration today—yet are still unproven for completely replacing enterprise resource planning (ERP) systems that include complex distributed order management, supply chain synchronization, and customer fulfillment.

What's Really Happening in Web Services Today?

Forget about the commercials and hype showing web services as an all-knowing and all-seeing platform that can tell any salesperson at any time from anywhere the status of orders in a remote location of Europe, for example—just the infrastructure investment to support this level of responsiveness would dwarf the entire IT budgets of many Fortune 1,000 companies. The reality is that there is much more crawl-walk-run and testing going on than global best practices at mobilizing a single system of record.

For the manufacturers with whom I spoke when researching this article, there's more of a focus on test-driving web services today than on en masse development. Several companies were concerned more with security than with time and cost-efficiency savings. According to AMR Research, less than $100,000 is spent on pilot projects, which underscores the fact that web services get used more for integrating databases and less for transactions outside an enterprise. Despite the hype surrounding web services as the Next Big Thing, one thing is clear from watching the adoption of companies using this approach to managing database integration: On average, it takes two years to make web services fully operational, particularly when including five or more web services.

Here are some additional insights into the true adoption of web services:

  • 75% of all web services projects are purpose-built for database and data warehouse integration projects.
  • 65% are developed to support integration to legacy or mainframe applications.
  • 60% are developed for internal portal integration efforts with legacy systems and typically three or fewer databases internal to the company.
  • One manufacturer of complex pumps and valves focused on headcount reductions equaling $500,000 the first year, only to find that the two engineers who would be let go were actually needed for integration work for the web service aimed at streamlining complex order capture. Net result: The web service worked and another application server engineer needed to be added to the project.
  • One manufacturer of computer equipment uses web services to integrate order capture and pricing systems that are part of their SAP ERP instance—and the result is the ability to publish price updates to worldwide channels within 48 hours. The web service will also add Oracle pricing integration—yet that will be over a year away and require months of internal development.
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