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.

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