Strategic Planning, B. Lheureux Research Note 7 August 2003 B2B Web Services Solutions: Pick Two In large trading communities, trading-partners' strategic and functionality needs will drive channel masters and hub hosts to implement two or more Web-services-enabled IT solutions to support B2B trading-partner integration. Core Topic Integration and Middleware: Architectures and Patterns for Software Infrastructure Key Issues How will emerging software infrastructure architectural principles and design patterns best address the requirements of collaborative business-to-business processes? Which technologies will enterprises strategically adopt to implement their software infrastructure? Decisions about IT solutions for different trading partners in large trading communities will be driven by variations in their key strategic attributes and functional requirements (see "Business Strategy Drives B2B Connectivity Choices"). The premise is that, given any sufficiently large trading community, different tradingpartner strategic and functionality requirements will drive different IT solutions for your trading partners for example, for your few large partners and many smaller ones (see Table 1). Table 1 Example of Differences in Trading-Partner Strategic and Functional Requirements for a Typical Supply Chain Scenario Typical Integration Scenarios for Supply Chain Integration From the Point of View of a Channel Master Most strategic and private Mixed model/ hybrid Least strategic/ public Strategic Importance High Medium Low Relationship Value and Differentiation High Medium Low Level of Trust and Risk High Medium Low Level of Trading-Partner IT Sophistication High Medium Low Percentage of Trading Partners "On-Boarded" Few Varies Many Willingness to Outsource Low Varies High Focus of Integration Source: Gartner Research (July 2003) processes plus planning processes (e.g., forecasting) processes (e.g., order fulfillment) processes (e.g., shipment notification [ASN]) Strategic Planning Assumption Through 2008, large trading communities (greater than 250 trading partners) that wish to use Web services will require at least two distinct Web-services-based IT solutions to bring on-board and manage their trading partners (0.7 probability). In this example, we take the point of view of a supply chain channel master and its various categories of trading partners, ranging from a few of the most strategic and private trading partners to the more numerous, less strategic and public ones. Our observation of best practices in business-to-business (B2B) projects has shown that fundamental differences in the seven strategic and functional trading-partner attributes for example, Gartner 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.
"strategic importance" and "willingness to outsource" tend to drive supply chain hosts to choose different technologies for connecting to their trading partners. For example, direct virtual private network connections and proprietary application integration technology can be deployed with a few, trusted trading partners, but not with many public ones. A key issue for trading communities is that, ideally, they would prefer to deploy only one IT solution to connect to all trading partners. Unfortunately, IT industry best practices have revealed that, to date, no single IT solution, whether electronic data interchange (EDI), XML/HTTP, Secure FTP, transaction delivery network (TDN) software or integration brokers, is appropriate for all trading partners. Web Services to the Rescue? Can Web services simplify trading-partner connectivity? By using Web services, can a channel master for a supply chain finally hope to use only one IT solution to simplify bringing tradingpartners on-board? We don't believe so, and, as we will explain later, this is largely because of differences in the strategic attributes and functional requirements among large numbers of trading partners. Although they are still in their infancy, Web services are an emerging, viable option to support such Web-based B2B tradingpartner interactions. To date, there are a variety of ways that Web services can be deployed in B2B scenarios, including: Web services networks value-added networks (VANs) Web-services-enabled integration software Standard Web servers Downloadable client software A key issue is whether any one of these solutions can fully address the requirements for all categories of trading partners in a large trading community ranging from your few most-strategic to your many more-commoditized trading partners. We assess the applicability of the different Web services solutions for different members of your trading community. Web services networks are VANs that do for Web services what traditional EDI VANs have done for electronic-business document services for years they are a service that safely and reliably delivers Web-services-based (at times in addition to traditional EDI-based) transactions between trading partners (see "National Student Clearinghouse's Web Services Network"). VANs are a good fit for connecting with larger 7 August 2003 2
numbers of trading partners, particularly for commonly occurring business transactions, including Web forms to bring on-board the ones that are less knowledgeable about IT (see "B2B Web Services Will Drive New VAN Traffic"). However, when you want the greatest amount of control and flexibility particularly with your most strategic, sensitive trading partners then VANs are not the best choice, because, as a third party, they increase the complexity and deployment time for changes (for example, new or updated B2B documents and transactions) to the B2B infrastructure. Web-services-enabled integration software includes solutions like enterprise service buses, Web-services-enabled integration brokers and TDN software, all of which are increasingly used to implement trading hubs (see "B2B Integration: In- House or Outsourced?"). In contrast to VANs, licensed software makes more sense for your strategic, sensitive trading-partner connections where control and customization of the tradingpartner activity are high priorities (see "TDN Software Usage Patterns in B2B Trading Communities"). However, because of license and development costs, as well as the need for additional staffing to deal with complex B2B-related IT skills and ongoing trading-partner management, these solutions are not as wellsuited to managing large numbers of trading partners. Standard Web servers are increasingly being used as a lowcost, pragmatic form of Simple Object Access Protocol (SOAP)- based integration hub (see "Standard Web Servers Make Simple B2B SOAP Hubs"). These simple trading hubs are useful for direct SOAP connections over secure connections with your most trusted trading partners or for low-value, low-sensitivity interactions with many midtier trading partners. However, they are still too complex for use by smaller trading partners, many of which probably do not have the appropriate IT skills or infrastructure to directly execute Web services. Downloadable client software is a relatively inexpensive and simple way to automate trading-partner interactions. In this scenario, the supply chain host develops or codevelops with an independent software vendor a Web-services-enabled, lightweight (often PC-based) application that trading partners can download. The software is developed to link directly with backoffice applications (for example, in-store inventory control systems) or is designed to run stand-alone and import or export simple ASCII files (which often can be imported or exported from back-office applications). Client access to Web services can be direct via B2B software or through a VAN (see "Eastman Chemical: A Formula for Web Services Success"). These solutions are generally useful for smaller trading partners with some IT experience, but their prepackaged nature makes them 7 August 2003 3
unsuitable for more-rapidly-changing, highly automated interfaces required for more-strategic trading partners. One Size Doesn't Fit All Although the different Web-services-based solutions for B2B application integration each have their strengths and use in different B2B application integration scenarios, none of them is a good fit for all trading-partner categories (see Table 2). Table 2 How Applicable Different Web-Services-Based IT Solutions Are for Different Trading-Partner Profiles Typical Integration Scenarios for Supply Chain Integration From the Point of View of a Channel Master Most strategic Mixed model/ Least strategic/ and private hybrid public Strategic Importance High Medium Low Relationship Value and Differentiation High Medium Low Level of Trust and Risk High Medium Low Level of Trading-Partner IT Sophistication High Medium Low Number of Trading Partners "On-Boarded" Few Varies Many Willingness to Outsource Low Varies High Focus of Integration Web Services Network (VAN) Web-Services-Enabled Integration Software (ESB, WSB, TDN) Standard Web Server Used as a SOAP-Based Integration Hub Downloadable Web-Services- Enabled Client Software Source: Gartner Research (July 2003) (if you are willing to outsource) Agoodfit (for limited-value, limited-qos transactions) Not a good fit (not easily customized to meet changing requirements) agreement and mature IT skills) agreement and mature IT skills) (for limited-value, limited-qos transactions) agreement) (via downloadable client or Web forms) Not a good fit (too complex for most users) Not a good fit (too complex for most users) (when capable of downloading software) As revealed in Table 2, differences in the strategic and functional requirements for different categories of trading partners affect how well different Web services solutions apply in different scenarios. A key challenge (with only two out of the four Web solutions "at times a good fit") is bringing on-board the larger number of smaller, less strategic trading partners with limited IT skills and infrastructure. For these smaller trading partners, solutions like Web forms and lightweight, downloadable client software will be an option as an alternative to general-purpose integration software or Web-services-enabled Web servers. At the other end of the spectrum, the same thing is true for more- 7 August 2003 4
complex IT solutions like SOAP-enabled Web servers and general-purpose B2B integration middleware these are a good fit for your smaller number of strategic partners but not for your larger number of trading partners that are less knowledgeable about IT. Ultimately, you will probably have to combine solutions to meet all of your B2B trading-partner integration requirements. For example, we expect that it will be typical for larger trading communities to use a hybrid combination of licensed software for their few most strategic trading partners in addition to outsourcing B2B connectivity for the larger number of morecommoditized trading partners to a Web services network. In fact, we believe that, through 2008, large trading communities (greater than 250 trading partners) that want to use Web services will require at least two distinct Web-services-based IT solutions to bring on-board and manage their trading partners (0.7 probability). Finally, regardless of which Web services solution is considered, Web services are not always the best choice for connecting with your trading partners for example, when synchronizing large amounts of data, batch file transfer via Secure FTP is still a more effective approach. Acronym Key B2B business-to-business EDI electronic data interchange SOAP Simple Object Access Protocol TDN transaction delivery network VAN value-added network Bottom Line: Enterprises that want to use Web services to connect large trading communities (greater than 250 trading partners) should plan on implementing at least two distinct Webservices-based IT solutions. Doing so will ensure the full ability to bring trading partners on-board and the flexibility to meet the diverse strategic and functionality requirements of their trading partners. 7 August 2003 5