Wednesday, 20 February 2008

Business services versus business chains

There has been and still is a growing interest in so-called business chains. These comprise a number of organisations that try to achieve a particular objective. Well known examples are supply chains. Most of these supply chains are centered round one particular organisation, e.g. a large retailer or producing company. We always call them 'supply chain of company X'.

Today, there is a growing interest for service orientation. It starts with technical, webservices. From a business perspective it comprises business services that are supported by IT service, e.g. webservices. Examples are transport services, payment services, etc. Each organisation has its internal policies to offer these services, e.g. by buying parts of the services from suppliers. These policies are transformed to business rules that govern the internal business processes.

This approach has many advantages. Services of organisations can be viewed as bricks for composing business chains. The contractual agreements between organisations for these services are the glue in those chains. In case there is a contract for many business transactions or for a period, the chain is fixed. Otherwise, the chain is per transaction.
Thus one is able to construct chains based on these individual bricks. It allows organisations to dynamically adapt to changes in their environment, which is especially of interest for government agencies controlling laws and regulations.

Choosing standards

Most professionals are of the opinion that only sound technical standards are the best choice. From a technical perspective, this is of course always true.

However, there are more forces that influence the choice of a standard. Take for instance the historic choice between VHS and Betamax (for those that remember these systems) for video, of which the best technical solution did not win. Amongst others, forces that influence choice are substitutes, supplier strategies, government policies, etc. Examples are for instance in the implementation of the webservices standards (WS-*) compared to others like ebXML. Technically, ebXML with respect to data exchange is the most sound. However, many suppliers heavily invest in webservices and offer complete product suites for drag and drop development. Oracle is an example of such an environment. Other reasons for webservices are more in the past. Internet was not that reliable for data exchange. ebXML developed a method for reliable transfer, but many organizations invested in using queuing technology to solve this problem. MQseries was one of the most popular products. Complete EU communication networks are still based on these products.

Thus, there are a number of aspects to consider when adopting a standard. Technical sound is only one of the options.