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.