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CIPS Connections
International Web Services Authority
Provides Valued Expert Advice This week, Stephen Ibaraki, ISP,
has an exclusive interview with Michael Liebow. Michael is the Vice President of
Web Services for IBM's Global Services Division, and views Web Services as the
critical enabling technology for IBM's On Demand vision. Michael has a broad background,
which makes him well suited to bring new concepts to market. He has held a
variety of sales, marketing, and management positions within a diverse range of
industries, including the high-technology sector, consumer-packaged goods,
media, and entertainment and advertising industries. Michael joined IBM in 1996, in
what was then the Personal Systems Group, and left at the beginning of 2000 to
start an Internet venture. From 1996 to 2000, Michael kick-started marketing and
sales efforts for IBM's Intel-based server by creating the predecessor to
today's xSeries, the IBM Netfinity. In 1998, Michael articulated a long-term
technical vision for the platform through the creation of the X-architecture
that is a technical blueprint for bringing mainframe attributes to the Intel
server market and which IBM continues to follow today. Discussion: Q: Michael, thank you for taking
the time out of your very busy schedule to do this interview on a topic so
important to businesses—Web services. A: Thank you. This is a very
important topic, one that is impacting thousands of IBM customers today. Q: What role is IBM playing in
the evolution of Web Services and what particular initiatives are the most
significant to businesses? A: IBM is working with customers
across a broad range of Web services adoption; from initial experimentation
through departmental deployment and leading edge SOA implementation. For customers who want to
experiment or start off using Web Services, IBM has over 40,000 software
developers actively working on Web Services applications through IBM’s
SpeedStart for Developers Program resulting in over 1,500 Web Services created
to date. For customers who want to deploy
Web services across departments IBM has a global team of over 35,000 Application
Innovation and Application Management professionals, including the world’s
largest middleware practices, to help clients develop, integrate, implement and
host applications that exploits IBM’s Application Management Services’
experience in providing legacy transformation and application portfolio
management to clients around the world. IBM also offers Web services education
classes and training modules for clients, developers and business partners
available through IBM’s IT Education Services. For customers who want to deploy
Web services across the enterprise IBM offers Web Services Centers of Excellence
that utilize IBM’s Global Business Consulting Services deep industry knowledge
to help clients in specific industries identify opportunities for Web services
and Service Oriented Architectures (SOA) to help change business processes and
business design. This virtual CoE is made up of experienced IT and Business
professionals from numerous practice areas across BCS, including Application
Innovation, Strategy & Change, and Learning & Knowledge. Q: Who are the current adopters
of Web services, how are they planning, implementing and using the services, and
how will this evolve over time? Can you provide three specific examples (case
studies) using MVS OS/390, MVS z/OS, and CICS and the specific Web services
products/solutions used to provide competitive advantage? A: IBM currently has thousands of
customers using Web services to generate business values, reduce costs and
increase revenue. A key benefit of Web services is that it provides the
customer with the ability to integrate data and business processes regardless of
what underlying technologies the current IT infrastructure is based on. Arkansas Blue Cross and Blue
Shield and its affiliates generate 12 million manual contacts (phone, fax,
e-mail) annually. The cost for these transactions runs between $36 - $60
million. And this does not include clearinghouse charges, which range from 20-35
cents per electronic claim. Arkansas Blue Cross wants to replace the
inefficient tangle of phone and paper-based transactions with direct, secure and
HIPAA-compliant processes. Its goal is to significantly reduce administrative
costs and increase the efficiency of its operations. IBM and partner Webify are
helping the insurer build Web services applications that will put billing and
claims processes online, bringing an anticipated 50 percent reduction in its 12
million manual contacts, as well as a 20 percent increase in efficiency in
filing and processing claims. Miami Dade County is already
using Web services projects to improve government operations and enhance the
services it offers to its citizens. It's working with IBM to implement a Web
services architecture that will enable 40 departments to reuse existing
mainframe functionality as they build new e-government applications. Web
services will touch all areas of county business, helping to reduce costs and
improve efficiency between county department operations. For example, in more routine
matters, such as issuing building permits, the county saves money and improves
service to citizens by allowing them to attain these necessities online, instead
of going to a county office. The use of Web services allows contractors to apply
and pay for building licenses and permits online and the information is
automatically directed to the appropriate building inspectors. Web services also powers its new
311 non-emergency information phone number. It will be the key in providing
operators access to all country information -- regardless of what system it is
sitting on -- to answer callers' questions. Visa's network includes more than
21,000 members, 396 million cardholders and millions of merchants in the U.S.
It's no surprise that the company must deal with charge-backs and
dispute-resolution as part of the normal course of business. The company's most recent Web
services project, Resolve Online, lets banks resolve charge-backs over the
Internet and automates the dispute process over its network. Now, most
cardholder disputes will be resolved within just one billing cycle. IBM Web
services technology is helping change the way Visa exchanges information with
customers and improving customer services. IBM Global Services played a major
role in developing Resolve Online and is currently working to identify ways to
deliver additional value using Web services and service oriented architectures.
Huntington Bank is working with
IBM and Synoran to manage the increasing complexity of Huntington’s internal
systems and provide higher levels of customer service. Huntington provides
innovative retail and commercial financial products and services to more than
300 regional banking offices, and has been serving the financial needs of its
customers for more than 137 years. Over the past decade, Huntington Bank
experienced significant growth through acquisitions and increased cross sales,
which led to a more complex IT infrastructure to support a diverse mix of
products, services, and delivery channels. Implementing advanced Web
services technologies from IBM and SYNORAN, Huntington was able to drive
customer information across lines of business at every delivery channel and
reduce redundant software by 60 percent. By streamlining their application
infrastructure, the Bank has reduced maintenance costs and can now take a more
focused and strategic approach to future software development. Web Services also
allow the Bank to have instant access to all their customer data, which reduces
the amount of time customers spend on the phone with customer service
representatives. Other Web services related savings come from ease in deploying,
maintaining and upgrading systems. Q: What is IBM’s long-term
strategy and specific solutions regarding Web services in small, medium, and
large systems? How will this affect business strategy? A: The long term strategy is to
help customers transform to become on demand businesses. To accomplish this Web
services will become a critical component of Service Oriented Architectures
(SOA), which will help customers solve more business problems while simplifying
the IT infrastructure into standardized components, or services built into
software, that can be reused and combined to address growing and changing
business priorities. Unlike new technologies that
force customers to rip and replace, IBM’s Service Oriented Architectures
leverage existing hardware and software investments. Standardized technologies
in an SOA, including Web services, package business tasks from applications to
create reusable “services” that address specific business problems. With an SOA, retailers can
automatically replenish inventory once it dips to a certain level and have the
order automatically filled by the supplier offering the best price; companies
that merge can integrate customer data faster without having to combine IT
infrastructures first; and health insurance companies reimburse consumers faster
by eliminating manual touch points in processing claims between patients,
doctors and clearing houses. Q: Please detail the top
traditional business models and the impact Web services will have on each of
these models. A: Web services are dramatically
impacting traditional business models. Customers are changing what they buy and
how they pay for it; the industry is moving towards solutions-based pricing and
away from assembling piece parts. This is virtually killing tradition business
models, such as best of breed purchasing. Near term, the impact of Web services
is faster and easier integration of systems. The cost of integration will
decline as the volume of Web services used in the enterprise increases. Longer
term Web services will impact the scale to which businesses can quickly adapt
and add new Web services to change more business processes. Scalability of Web
services will be a key differentiator. Q: What specific new ways of
thinking about business will come from the planning and implementation of Web
services? A: Web services is changing the
way companies think about business. They are leading to a Component Business
Model concept that focuses on those business processes that are strategic,
common or an un-differentiator for the business. Companies will focus more and
more on core specialties and look elsewhere to accomplish non core activities.
This is leading to the reemerging ASP business model, with a core focus on
providing customers with a service that solves a business need. These services
solve business problems regardless of underlying technology and are focused on a
company’s expertise in a given business process. Web services are giving new
life to the ASP business model. Q: What are the current
impediments to the planning and implementation of Web services this year, next
year, and three, and five years into the future? Can you be specific in what
these impediments are and how they will be resolved? A: Today there is tremendous
value in implementing Web Services. The biggest challenge this year will be line
of business and management that there is value in doing so. Secondly the biggest
challenge to assuring that Web services will succeed is making sure that
customers start Web services use with the proper decision framework in place,
one that focuses on the specific business problems. Q: If you were doing this
interview, what question(s) would you ask and what would be your answer(s)? A: Q1) There are some thoughts
that suggest the customers will waste a significant amount of money on failed
attempts to implement Web services. The question is, how do customers make the
most out of Web services implementations and make every dollar count? A1) Customers need a trusted
partner that will help them on the journey from initially starting to implement
Web services today to the vision of a full Service Oriented Architecture and a
complete transition to an on demand business. IBM has the dedicated resources in
place to make certain our software products will support new Web services as
specifications become available. IBM Global services has the skills, roadmaps
and partnerships in place to help customers businesses evolve in new efficient
and profitable directions. Final note: We appreciate the time you have
taken in sharing your vast knowledge and experiences with our audience—thank
you.
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