Web Services and the Enterprise Business Environment - By Stephen Ibaraki, NPA

There’s a revolution occurring in enterprises and it’s all about Web services producing a minimum 50% reduction in total cost of ownership (TCO) and up to 3000% return on technology investment (ROI). Its use is moving from early adopter to early majority by early 2005. The most common usage is integration between mainframe (e.g. MVS OS/390, MVS z/OS, CICS), client/server, and Web-based environments (Intranets/Extranets/Internet). I spoke on this topic at Comdex Las Vegas to a capacity ‘enterprise’ audience due to the high interest.

As networking professionals, you will play a critical part in its planning, design, and implementation. Therefore, it is critical you understand the fundamental concepts and technology/business model behind this revolution.

In this article, we outline: the advantages, impediments, discuss examples, define Web services from a business and technical perspective, and finally end with a roadmap for implementation.

Advantages to Enterprises

Web services are critical to strategic thinking and planning, the organization and business models, and the value chain and operations. Business models are heavily impacted by the universal integration abilities of Web services. The integration process occurs in three phases: internally, externally on a limited basis, and then broadly through the Internet. Web services are currently being used heavily for internal integration with external integration gaining momentum in 2005/6.

Phase I integration occurs behind the firewall on the intranet involving enterprise systems such as ERP and CRM; legacy mainframe, client/server, and Web-based systems; and aggregating applications sources for self-service portals. Next, Phase II integration occurs with a limited number of customers, suppliers, partners through your extranet. Ford and Dell are good examples of companies in this phase. Finally in Phase III, this is broadened to larger trading networks, e-markets, and the public using the Internet.

Using Web services, your business becomes more agile since you have microscopic and global visibility into all your operations allowing quick adjustments. You will have faster time to market for new product and services since the supporting applications can be implemented 70% faster by re-using existing systems.

Web services provide tighter relationships with your customers, suppliers, and partners since it’s easier for them to do business with you. Outcomes will include lower inventories throughout the supply chain; improved data quality; better business intelligence on sales and marketing programs; faster product design through collaboration; and higher sales from streamlined delivery of business services.

Overall, there are substantial cost and time savings from lower development and maintenance costs; improvements in productivity and efficiency through streamlined operations; reduction in redundant applications and processes; cost savings by not using traditional Enterprise Application Integration (EAI) technologies; and savings by managing/reusing existing legacy assets. Furthermore, resources can be redeployed for other strategically important initiatives.

In addition, Web services allow you to expand to new markets, sources of revenue, and business models by redesigning business processes. For example, a large credit-rating firm is using Web Services to expand revenues from small and medium sized businesses. Web Services support portal initiatives and the resulting improvements in self-service can offer new revenue opportunities. T-mobile and Amazon are good examples.

Impediments to implementing Web services

Web services can be deployed over the Internet which impacts reliability and availability. XML (extensible markup language) underlies Web services so the bulkier text processing can impede performance.

Moreover, the standards are still evolving which affects interoperability however this is being addressed by the Web Services Interoperability ( organization who publishes profiles and guidelines to ensure interoperation. Two major groups guiding the standards are the Organization for the Advancement of Structured Information Standards ( and the World Wide Web Consortium (

Added challenges come from the training required on the technology and service oriented architecture. Finally, can you trust a publicly available Web service discovered dynamically without user intervention since trading-partner relationships are typically based upon interpersonal exchanges?

Enterprise Business cases for Web services

Merrill Lynch used Web services to integrate their CICS applications saving 96% over using integration-bus technologies. They developed a Web services SOAP gateway to their CICS environment allowing full access to the CICS applications with no adapters required for their client applications. And, they saved on licensing costs usually associated with EAI.

The Bank of Montreal is using Web services to provide a unified customer view of the bank’s array of specialized IBM mainframe applications such as savings, loans, and investments.

The US government in their single portal, E-travel system, is providing centralized travel management saving 300M annually, yielding a 70% reduction in processing time, with an estimated 650% ROI. The system is using Web services to provide a single reservation system integrating a myriad of travel care providers, reservation/voucher systems, travel agencies, and travel payment reimbursement systems.

ATT connects their TIRKS (Trunks Inventory Record Keeping System) first developed in 1960, to more than 100 other applications using Web services resulting in a 78% saving in maintenance time. Prior to using Web services, any changes to TIRKS resulted in changes to the 100+ applications.

Wachovia, a financial services giant, is providing a consolidated view of customer information using Web services to access numerous legacy CICS/DB2 backend systems.  Furthermore, Web services allow support for browsers, rich clients, interactive voice response systems, pagers, and wireless systems.

Dunn and Bradstreet (D&B) and Swiss Interbank Clearing (SIC) use Web services, replacing EDI (Electronic Data Interchange), to provide improved services to their clients. For example, SIC clears most cheques written in Switzerland. Using EDI, the process could take up to six days in contrast to the one day using Web services.

In a recent discussion, Michael Liebow, Vice President of Web Services for IBM's Global Services Division, provided added examples of mainframe integration. These are summarized below.

Arkansas Blue Cross and Blue Shield and its affiliates generate 12 million manual contacts (phone, fax, e-mail) annually. Arkansas Blue Cross wants to replace the inefficient tangle of phone and paper-based transactions with direct, secure and HIPAA-compliant processes. Web services applications will put billing and claims processes online, bringing an anticipated 50 percent reduction in its 12 million manual contacts, as well as a 20 percent increase in efficiency in filing and processing claims.

Miami Dade County is already using Web services projects to improve government operations and enhance the services it offers to its citizens. Web services will allow 40 departments to reuse existing mainframe functionality as they build new e-government applications. For example, Web services allow contractors to apply and pay for building licenses and permits online and the information is automatically directed to the appropriate building inspectors. Web services also power its new 311 non-emergency information phone number. It will be the key in providing operators access to all county information -- regardless of what system it is sitting on -- to answer callers' questions.

Visa's network includes more than 21,000 members, 396 million cardholders and millions of merchants in the U.S. It's no surprise that the company must deal with charge-backs and dispute-resolution as part of the normal course of business.
The company's most recent Web services project, Resolve Online, lets banks resolve charge-backs over the Internet and automates the dispute process over its network. Now, most cardholder disputes will be resolved within just one billing cycle.

Huntington Bank provides innovative retail and commercial financial products and services to more than 300 regional banking offices, and has been serving the financial needs of its customers for more than 137 years. Over the past decade, Huntington Bank experienced significant growth through acquisitions and increased cross sales, which led to a more complex IT infrastructure to support a diverse mix of products, services, and delivery channels. Implementing advanced Web services technologies, Huntington was able to drive customer information across lines of business at every delivery channel and reduce redundant software by 60 percent. By streamlining their application infrastructure, the Bank has reduced maintenance costs and can now take a more focused and strategic approach to future software development. Web Services also allow the Bank to have instant access to all their customer data, which reduces the amount of time customers spend on the phone with customer service representatives. Other Web services related savings come from ease in deploying, maintaining and upgrading systems. 

 What are Web services (WS)—a business-centric viewpoint?

Picture Web services as applications exposed as standards-based services. More than 100 open-source and commercial toolkits are available allowing applications developed under any environment to be easily (somewhat automatically) exposed as Web services. These services can be used by other applications bridging internal applications or across trading-partner supply and demand chains. Using intranets and the Internet, any system can easily connect with any other system. Web services allow business process management (BPM) permitting different platforms such as SAP and Oracle to exchange information. Moreover, Web services provide real-time visibility into all aspects of the business value chain, demand chain, supply chain enabling business activity monitoring (BAM) alerting users to imminent problems. Web services enable the collection and computation of analytic information and optimization through the evaluation of complex “what if” scenarios.

 What are Web services (WS)—a technological perspective?

This time picture Web services as an application program interface (API) based upon XML (extensible markup language), and open standards—a WS-API. Web services can be built from an existing application simply and easily using one of the many available toolkits. Since it’s standards-based with all major vendors in agreement, a WS-API supports application-to-application communication (APPC) from any system to any other system across an internal intranet or across the Internet.  This allows loosely coupled connections, services reuse, and combining services into composite services.

WS-API loosely-coupled connections are flexible, not brittle and do not break when applications are modified. Changing one application doesn’t require rewriting connected applications much like in the AT&T TIRKS example. No expensive integration middleware, integration-bus technology, or adaptors are required to connect different systems.

In addition, once a Web service is created, it can be reused. For example a travel reservation service can be reused in the following ways:

1) To provide business intelligence (BI) by analyzing reservation trends in a BI application;

2) To provide customer service representatives with customer travel reservation history in a CRM application;

3) To allow customers to make travel reservations and obtain reservation status information through a self-service travel portal;

4) To allow management reporting on reservations.

Composite services are formed by the combining of services. This permits business agility or the quick reaction to new trends and business needs. In addition, end-to-end business processes can be modeled and automated.

Because Web services are based upon XML, they allow universal connectivity and interoperability between applications of any type. And this is across platforms, operating systems, and programming languages. The use of XML provides a standard way of representing data, understandable by all systems, vendors, and is human/machine readable as illustrated in this XML example:





Web services are founded on universally recognized standards. The primary ones are HTTP, SOAP, WSDL, and UDDI. HTTP and SOAP are used to communicate with a Web service. WSDL is used to describe a service, can be auto-generated from service code, and it can be used to auto-connect with a service. UDDI is used to register Web services so they can be found and then used, even automatically. A more in-depth description follows.


HTTP (Hypertext Transfer Protocol) is used as a transport for message exchanges with a Web service. Protocols such as SMTP (Simple Mail Transport Protocol), FTP (File Transfer Protocol), and others can be used however HTTP has the advantages that it’s the same protocol for seeing web pages, goes through firewalls, and is widely supported and pervasive.


SOAP (formerly Simple Object Access Protocol) is now just a name as of version 1.2. It is the XML-based envelope used to hold message exchanges with a Web service. The messages are typically XML documents containing business information or method (service) calls. SOAP is valuable in its own right since it can be used as a messaging system for generic enterprise application integration (EAI), replacing the need for expensive messaging software or middleware. An added advantage of SOAP is that it can be automatically generated by the Web services toolkits. Moreover, SOAP can be extended for added capabilities such as security, management and is supported by all systems and vendors.


WSDL (Web Services Description Language--pronounced Wiz Del) is used in WSDL documents. WSDL, which is automatically generated by Web services toolkits from application code, describes in a human/machine readable form: what a service does; what operations it can perform; how you communicate with it; and where it’s located. WSDL describes the Web services’ interface in a standardized way that can be understood and used by anyone from any development environment (Java, C#, VB, COBOL, etc.) without requiring knowledge of the internal workings of the software component. You can think of it as a generic API design document allowing code reuse—a COBOL programmer can easily use a Java component for example. You can also use an application’s associated WSDL document to auto-generate the Web services connection code for the client software.


UDDI (Universal Description Discovery and Integration) offers the ability to submit and register Web services in a private or public registry so they can be manually or programmatically/dynamically (automatically) found and then used. UDDI provides the ability to describe: the owner of the software; contact information; the services offered by the software; information on how to use it; and where it’s located. Furthermore, UDDI provides the ability to do searches based upon categories. Using a ‘Phone Book’ analogy, you can think of a UDDI registry consisting of searchable: white pages listing business info; yellow pages categorizing services; and green pages containing the technical details about what the service does, how you communicate with it and where it’s located. Public UDDI registries are offered by companies such as Microsoft, IBM, and SAP. A private UDDI registry allows a company or trading partner network to list available Web services. This provides an added function as a software catalog to allow reuse and prevent duplication—to manage your software assets.

 A Roadmap for implementing Web services

 Here are some guidelines if you wish to implement Web services:

  1. Gain knowledge on Web services technologies and educate at all levels to realize the strategic and operational opportunities that result in reduction in TCO and provide a high ROI.

  2. Create a center for excellence that promotes best practices, technology reuse, development patterns.

  3. Look at what you are doing, what platforms you are using, conduct an application inventory.

  4. Look to see what others are doing.

  5. Define standards/policies/guidelines on how you will conduct your Web services implementation.

  6. Look for service candidates with the greatest impact. For example: recurring processes involving many users; areas where there’s dynamic or continual change; business processes involving many manual steps or manual intervention; or areas where you can consolidate views to increase employee productivity.

  7. Pilot an internal integration project.

  8. Fine-tune your standards/policies.

  9. Repeat steps 1 to 7 using Web services to integrate your internal systems as much as possible.

  10. Try a few of your closest trading partners – prioritize to the top 20% who affect 80% of your revenues.

  11. Expand to a broader market only when the standards are mature.

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