VideoHolly Burgess is happy with her web-based software; just don't ask her how it works. The attorney and assistant vice president of advanced sales at CGU Life Insurance Co. of America, in Quincy, Massachusetts, says that in the year she's been using PlanLab, from Impact Technologies Group Inc., she's been able to close bigger cases and sign on more agents, thanks to the analytical help provided by the software. The fact that, behind the scenes, Impact is using certain "Web services" technologies to provide her with the capabilities she needs means little to her.
It does, however, mean a great deal to Impact, to Microsoft (which supplies the tools Impact uses to develop its products), and, by extension, to the makers and consumers of virtually every kind of software. Awash in the sort of hype usually reserved for Olympic figure skaters, Web services — a term applied to both the tools used to build easily integrated Web-based applications and to the underlying technology standards they rely on — can use some early success stories to bolster the claims being made for them.
In the Harvard Business Review last October, senior executives at 12 Entrepreneuring Inc., a Web services incubator, predicted that Web services would ultimately turn many companies "inside out, with their formerly well-guarded core capabilities visible and accessible to all." Research firm IDC says that an "acceleration of the transformation of business models" is possible, with some companies embracing a "virtual IT" department while others turn in-house IT into a profit center, all thanks to Web services.
Transformative technologies have been hailed before, only to disappear into the chasm of failed expectations. Ironically, what makes Web services a legitimate contender for "next big thing" is that it is actually many small, old things redesigned and fine-tuned via years of trial and error and collective hindsight. There have been many efforts to make software programs easier to write, to simplify the connections between programs, and to network companies within and without their walls. While many of those efforts have been disappointing or outright failures, they've provided valuable lessons for developers of Web services. Combine those lessons with the fundamental "openness" of the Internet, and solutions to many of IT's thorniest problems may be at hand.
A Welcome Misnomer
Despite a surfeit of headlines about Web services, a CFO could be forgiven for not understanding what they are. In large part that's because the term itself is misleading. Leave it to the IT world to finally forgo an acronym in favor of a simple phrase, only to get the phrase wrong. These "services" are really an emerging set of protocols and standards that will allow software programs to describe themselves to each other and integrate with each other without the handcrafting that has marked most "systems integration" efforts to date.
There are at least two reasons why CFOs should take a keen interest in Web services: They probably won't cost much, and they really may change everything. The era of quickly built, easily integrated software may not be here, but it's tantalizingly close. The armies of internal IT staff or hired guns who spend months or years on projects may eventually be able to develop new applications in just weeks.
By most accounts, Web services will creep into organizations gradually, incorporated into new applications or working quietly behind the scenes in software that companies rent from application service providers (ASPs). That's the case with CGU Life and its ASP, Impact Technologies. A software application gathers financial data about a prospective client, effortlessly passes that information via the Internet to a secured Web site, where a CGU Life analyst can pass it through several applications at once with a single mouse-click, creating an estate plan without the rekeying of data and other manual processes that hamper customer service.
Connecting applications via the Internet is not new, of course, but what excites many companies is how easy it is to build and integrate software using Web services. Working with new software development tools from Microsoft's .Net product family (which represents part of the software giant's $2 billion effort to create the tools that will give rise to Web services), Impact developers achieved a fourfold boost in productivity, says company founder, chairman, and CTO Howard Keziah. And they did it without having to undergo significant new training, which means that 20-year-old Impact is managing to transition into a Web services firm without any wrenching expense or reinvention. Able to do more work in less time, the company is far freer to explore new products and improvements.
Those same benefits should accrue to companies' internal development efforts. Corporate IT departments won't have to worry about current staffers becoming obsolete; in most cases, the protocols that define Web services will be built into the development tools they already use, whether from Microsoft, IBM, Sun, or other companies. Programmers already schooled in object-oriented design will find the transition easy, says Keziah. They will be able to write new applications that incorporate Web services capabilities with only minimal training.
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