CIO Update: A Formula for E-Commerce Success in Web Services

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1 IGG R. Batchelder Article 28 August 2002 CIO Update: A Formula for E-Commerce Success in Web Services Gartner presents a case study on how Eastman Chemical, contrary to conventional application integration wisdom, will provide Web services to trading-partner desktops as content delivery services coupled with the use of rich-content graphical user interfaces. Many CIOs and other executives are looking into how they can integrate Web-based applications with enterprise systems, including e-commerce. Gartner presents a case study on how Eastman Chemical, contrary to conventional enterprise application integration wisdom, will provide Web services access to trading-partner desktops as content delivery services coupled with the use of rich-client graphical user interfaces. Background An overly optimistic view of Web services might characterize it as a wonder drug for creating standards-based, end-to-end transactional systems to supplant electronic data interchange (EDI) and business-to-business (B2B) technology. Eastman Chemical, a global company with headquarters in Kingsport, Tennessee, has been an opportunistic user of advanced IT. The company has been very pragmatic in evaluating the potential of Web services to streamline Web-based e-commerce. Initially, Eastman evaluated two classes of external integration problems that might benefit from emerging Web services technologies: Automating pre- and post-sales processes. This involves putting deep, responsive, product information systems in place, which simplify and ultimately expedite the online product selection process. Typically, such systems assist the customer with appropriate and effective use of purchased products, such as product configurators. Shortening the order-to-cash cycle. This involves putting secure, end-to-end transactional systems in place, which simplify and ultimately expedite online order-taking and processing. In many instances, shopping carts, payment authorization and shipping/tax calculators front-end these functions. After a careful analysis, Eastman concluded that shortening the info to order cycle was a more realistic application of Web services at this early stage of its evolution. Eastman s conclusion was based on the unique selling challenges that it encountered as a process (rather than a discrete) manufacturing company. Gartner Entire contents 2002 Gartner, Inc. All rights reserved. Reproduction of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The reader assumes sole responsibility for the selection of these materials to achieve its intended results. The opinions expressed herein are subject to change without notice.

2 Chemical e-commerce systems must deal with the complex problem of matching unique customer demands to products tailored to their specifications. The problem is reflected in substantial requirements for technical content delivery and customer access to in-depth technical expertise. For two primary reasons, Eastman has chosen to avoid re-architecting existing Web infrastructure and has focused on providing additional customer self-service interfaces with Web services technology: Eastman has essentially mastered the art of securely and reliably integrating transactional systems to provide customer access using browser and B2B technology. These systems are now being stabilized and more widely deployed to realize their full return-on-investment potential. Thus, the economic case for any substantial software rewrite is difficult to make. As Web-enabled commerce is architected today, secure, stateful transactions are typically conducted point-to-point, via persistent (Secure Sockets Layer or HTTP-S) connections. The immaturity of Web services relative to its security models, its inability to orchestrate complex or nonlinear process flows, and its inability to conduct stateful interactions greatly limits its usefulness. Thus, the technical case is difficult to make. These realities have led Eastman to focus on pre- and post-sales interactions. Web services technology will be externally applied to customer needs for self-service access to product information and technical assistance. The Problem Eastman, with annual revenue of more than $5.3 billion, is the seventh-largest U.S. chemical company. It is the world s largest supplier of polyester plastics for packaging; a leading supplier of coatings raw materials, specialty chemicals and plastics; and a major supplier of cellulose acetate fibers and basic chemicals. It is also among the top 10 global suppliers of custom-manufactured fine chemicals for pharmaceuticals, agricultural chemicals and other markets. As is typical of the chemical industry, Eastman not only sells directly to large industrial companies that fabricate their products into finished goods, it also supports an extensive network of specialized resellers that match Eastman s products to particular applications. Each of its 1,200 chemicals, fibers and plastics has unique properties, some of which can be customized to fit a customer s specific needs. Because of the unique nature of each chemical, choosing the right product for a given application can be a very complicated process. In many cases, the purchaser will have specific performance requirements for a given chemical application. Frequently, a purchaser will review the available documentation for a chemical, then interact with its technical service engineers to select the right product. Over time, Eastman engineers found that it was helpful to streamline this process by capturing their expertise in spreadsheets or other simple desktop applications. Thus, by inputting and adjusting certain parameters, Eastman engineers could select the right product to meet customer requirements. As Eastman deployed its Web site, it has migrated many of these applications online as interactive technical service wizards. Some of the more general-purpose wizards appeared online unprotected, while others were password-protected. Because these wizards are driven by server-side databases

3 and application logic, they cannot be easily redeployed to Eastman s distributor Web sites. More important, given the breadth of the company s reseller network, this Web site architecture makes it difficult to provide customizable, value-added wizards that can be hosted by its specialized channel partners. The Objective Eastman s goal is to fully leverage its chemical product knowledge base to: Simplify the purchasing process Retain customers Attract new customers Toward that end, its configuration wizards can become quite infectious. Because the tools are perceived as the next best thing to talking to an engineer, customers or prospects quickly become comfortable with using them and tend to make them an integral part of their chemical-buying process. Thus, wizards have two beneficial effects: They make it easy to quickly select the right Eastman product. They make traditional selection methods (such as chasing down an engineer, comparing specification sheets) seem less efficient and accurate. Equally important to Eastman, the company wants to increase the loyalty and productivity of its resellers. Many of its resellers specialize in particular industries, and represent chemical products from multiple manufacturers. Although price is an important buying factor, often the particular properties of a property or the ability to customize it are key factors in the buying decision. Further, resellers wish to distinguish themselves from their competitors and enhance the value of manufactured products with digital services. Thus, the ability to provide customizable wizards, which can be integrated into reseller s own online systems, offers a compelling marketing advantage to Eastman. These advantages multiply as the number of wizards and resellers increase, and are an effective way of empowering value-added sales channels. Eastman also hopes to extend the use of Web services to deliver various after sale documents, such as certificates of analysis, material data safety sheets and usage notes to its customers. Its channel partners, however, view such information as pre-sales data, which must be supplied to end users as an additional step in the selection and ordering process. Similar to the case with wizards, Eastman wants to provide this information in a form that resellers can integrate into their selling systems, thus adding additional value for the resellers customers. The Approach Taken To meet the business objectives, Eastman IT strategists have chosen to implement a Web services approach for scaling up this program. The intent is to create digital resources that can be used internally and seamlessly redistributed throughout the product distribution channel. SOAP (Simple Object Access Protocol)/XML interfaces will be published to UDDI (Universal Description, Discovery

4 and Integration) to promote the reuse of services. Further, this publish-and-subscribe mechanism should minimize the demands on Eastman s IT staff from external developers. Eastman has developed SOAP/XML wrappers for a number of wizards, and has more planned for completion by year-end Initially, the company will provide a hosted rich-client graphical user interface (GUI) engine to deploy these wizards directly to customer desktops. These user interfaces can execute within a Web browser or directly on the desktop. They will be powered on the back end by a presentation layer server operated by Eastman. This user interface technology can stand alone or, in Eastman s case, be integrated with XML-based Web services. Eastman has used a combination of Microsoft COM+ components and newer Visual Studio.NET software to create its wizards. A WebMethods server is used as an external HTTP listener and Web Services Description Language (WSDL) generator. These Web services are exposed to the outside world via the Grand Central Web services network, but the WSDL will remain on Eastman s network. Ultimately, Eastman plans to publish its wizards into a public UDDI registry for broad usage. This architecture gives customers the choice of using Eastman s rich-client GUI or integrating the Web service into their own Web site user interface. The Results Achieved Eastman has chosen to offer the rich-client GUIs and Web services to its largest customers first. Beta testing is under way, and formal release is scheduled for 2H02. Initial testing shows one- to two-second response times for the wizard, which falls well within the acceptable range for an interactive desktop application. Eastman is confident that this performance will scale satisfactorily, because most wizards should have less than 100 concurrent users at any given time. Eastman has found that the distributed, rich-client GUI architecture enables it to build and deploy user interfaces that are far more sophisticated than those generally available through Web browsers. This approach has allowed the company to create a user experience that enhances the intrinsic value of the product knowledge base behind it. Eastman has found Microsoft s Visual Studio.NET to be a stable and easy-to-use environment for converting server-side components into SOAP-enabled procedures. Internal Web service calls flow through Microsoft s IIS-based front end into the same COM+ back-end system used by external customers. End-to-end performance and stability has exceeded the company s expectations, and simulations indicate that multiuser performance should remain satisfactory under production workloads. Critical Success Factors and Lessons Learned Eastman has steered clear of trying to reinvent its online ordering system. It has also resisted the temptation to re-architect its B2B system. Eastman has chosen instead to pursue a straightforward, comparatively low-risk Web services application, which could continue to function in a traditional Web server environment, should problems arise. Of particular interest is Eastman s choice to first deploy a rich-client GUI to the desktop, rather than providing only a set of Web services interfaces that its partners can integrate into their own operating environments. Many of Eastman s customers are not yet ready to deploy Web services

5 technology. From a technical standpoint, the rich-client GUI provides customers with advanced functionality without the risk of dealing with unfamiliar technology. Such an approach might seem counterintuitive, given the conventional wisdom of Web services being standards-based remote application procedure calls, rather than application programs unto themselves. However, Eastman has been able to demonstrate to its own satisfaction that desktop deployment will not only perform satisfactorily, but will also scale economically. This approach is consistent with Gartner s observation that rich-client technology can play a constructive role in a Web services scenario. Key to this success is the choice of a highly distributed, XML-based GUI environment, and a relatively uncomplicated, Microsoft-based execution flow on the back end of the wizards. Thus, Eastman has wisely chosen to keep it simple from a process flow and execution standpoint. Bottom Line Eastman Chemical has resisted the temptation to employ Web services to re-architect complex processes that require advanced security, process flow and state-handling methods. Instead, Eastman has used Web services to creatively distribute its knowledge base to strengthen its major customer and channel relationships. Eastman is thus employing Web services as a relatively low-risk technology that can be used to implement a high-leverage business strategy a formula for success as an early adopter of Web services. Written by Edward Younker, Research Products Analytical source: Robert Batchelder, Gartner Research For related Inside Gartner articles, see: CIO Update: Web Services Networks A Viable New Web Technology to Deploy, 7 August 2002 CIO Update: EDI to Web Services Networks Convergence and Alternatives, 7 August 2002 CEO and CIO Update: Case Studies Showing How IT Contributes to Business Success, 31 July 2002