Web Services, CRM and Siebel s Universal Application Network

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1 EXTRAPRISE Company Services Alliances Case Studies Extraprise Report Web Services, CRM and Siebel s Universal Application Network The software industry is abuzz with its latest paradigm shift Web services. The challenge for corporate executives is that technology pundits have been spending too much time with their economist friends. While the latter are said to have forecast nine of the last two recessions, technologists have discovered dozens of paradigm shifts, very few of which have occurred. The Internet? Yes, put a check mark next to that one. Network appliances, application service providers, Jini, write once, run anywhere, push technology? Well, perhaps another day. At the surface level, Web services (WS) are an unusual recipient of the industry s depleted supply of hype. The term is certainly misleading. WS are not necessarily offered as hosted services either inside or outside the corporation. Similarly, many, perhaps most, will not be accessible through the World Wide Web, but rather across internal networks or links with partners and customers. Such an unfortunate name belies the importance of the underlying technology. Web services will change the way companies develop and integrate application software, although perhaps not in the way nor in the time frame proponents expect. In customer relationship management, WS have the potential to change the way companies implement their internal operations. In the near term, they will provide: A more effective mechanism for enterprise application integration The infrastructure for a new generation of enterprise application software The infrastructure for software to automate processes that span corporate functions, partners and customers They will not do all of these things on the same schedule. To get the benefits of WS as part of a CRM initiative without squandering funds, smart companies will follow an evolutionary path. This Report covers Web services and their potential impact on customer relationship management. In particular, it highlights the use of Web services standards in enterprise application integration and the automation of business processes that extend beyond the enterprise. This discussion is particularly relevant to users of software from Siebel Systems. Companies using Siebel face a more seamless transition than do those with other enterprise software. Siebel has an unmatched Web services strategy across its product suite. The company s Universal Application Network (UAN) forms the basis of this strategy. This Report focuses on Siebel s UAN initiative as an example of a superior product strategy and recommends an adoption program that maximizes returns with minimum risk. EXTRAPRISE 2003

2 What are Web services? There are many ways to define Web services. The simplest definition comes from the World Wide Web Consortium ( the industry group defining standards for the Web: The World Wide Web is more and more used for application to application communication. The programmatic interfaces made available are referred to as Web services. Web services are the middleware of a new, and potentially much improved Internet. The official definition from W3C outlines some of the key technologies involved: A Web service is a software system identified by a URI, whose public interfaces and bindings are defined and described using XML. Its definition can be discovered by other software systems. These systems may then interact with the Web service in a manner prescribed by its definition, using XML based messages conveyed by Internet protocols. In short, WS are programs or procedures with a known location (described by a Universal Resource Identifier, URI) with known functions (described by the Web Services Description Language) and available to requesting services through an XML (extensible Markup Language) interface. The following diagram highlights these attributes: Figure 1. Web services use a number of basic protocols to build significant applications. In use, a description of the Web service is published to a standard repository (or service registry) with a defined location and set of attributes. A requesting program finds the service by looking it up in the registry and linking (or binding) to it. Programs that access a number of services use a language like the Web Services Flow Language (WSFL) to define the sequence of operations to be executed. The following chart diagrams the common technology stack used to define, access, sequence and manage Web services: Figure 2. A complete technology stack for Web services involves a broader range of protocols. 2

3 XML is a standard to create common information formats and share both the format and the underlying data on the World Wide Web and other internetworking systems. For example, automobile makers might agree on a common way to store information about automotive products (engine size, transmission, body style, fuel source, etc.) and describe these in XML format. Using this automotive standard would enable a user to send an intelligent agent (a program) to each maker's Web site, gather data, and make comparisons. In more general terms, individuals or companies that wish to share information in a consistent way can use XML. XML is designed to improve the functionality of the Web by providing more flexible and adaptable information identification. It is called extensible because it is not a fixed format like HTML (a single, predefined markup language). Instead, XML is actually a `metalanguage' a language for describing other languages--which lets you design your own customized markup languages for limitless different types of documents. XML is not just for Web pages: it can be used to store any kind of structured information, and to enclose or encapsulate information in order to pass it between different computing systems which would otherwise be unable to communicate. XML is increasingly popular because it removes two limitations of using information on the Internet: the dependence on a single, inflexible document type (HTML) without the complexity of a comprehensive document markup language like SGML (Standard Generalized Markup Language), whose syntax allows many powerful but hard-to-program options. XML simplifies SGML, and allows the development of user-defined document types on the Web. As a result, XML is a markup specification language with which you can design ways of describing information (text or data), usually for storage, transmission, or processing by a program. It says nothing about what you should do with the data (although the choice of element names may hint at how they are used). There is an old joke from the Unix community that currently applies to Web services: Standards are great, and the great thing about Unix standards is that there are so many from which to choose. It is certainly true that standards are sometimes not so standard. While W3C, the Object Management Group and others have made great strides in their efforts, two issues remain. First, it will take one or two years for some components to be completely defined and finally approved. This is true of WSCI (Web Services Choreography Interface) and several others. Second, there are two major reference platforms for any such standards: Microsoft s.net and Sun s J2EE (Java 2 Platform, Enterprise Edition). Membership in the supporting camps ebb and flow, but most companies that adopt Web services will have to accommodate both platforms. How do Web services apply to CRM? Web services are a number of technologies, not a market. Certainly some technology providers like Microsoft, Sun, IBM, Oracle and Novell will provide tools, application servers and other components to build applications as Web services. However, the primary market for Web services lies in applications and solutions. How will this effect customer relationship management? First, companies will use Web services as application integration and process integration technologies. They will standardize on XML and use Web services as the default means of integrating their Siebel sales force automation system with the corporate MySAP ERP applications. They will use the same technology to integrate these and other commercial applications with their legacy systems. Web service-based software will almost certainly replace custom point-to-point integration, or proprietary application integration approaches. The WS protocols are too simple, too inexpensive and will become too widespread to ignore. This leads to an important distinction. Traditional application integration approaches were exactly that, integrating individual applications at the data and/or process level. Most approaches to this are difficult, custom and minimalist. That is, they are designed for one task (sending a customer purchase history from SAP to Siebel, for example) and not easily generalized. Web services will certainly fill this role, but they provide the capability to do much more. As WS become ubiquitous, they have the potential to change the nature of systems integration. When all, or most, corporate applications are readily available through common interfaces, then 3

4 it will be possible to develop more sophisticated business processes. The focus will not be on connecting Siebel to SAP to perform a specific task, but to rethink the way customer processes are managed throughout the enterprise. The focus will evolve from simply connecting applications, to implementing better processes across the organization. Most existing enterprise applications (custom or commercial) automate the processes within an individual functional organization (marketing, sales, service, human resources, finance, manufacturing, etc.). As such, they are artifacts of an earlier age in computing when cost and technology limitations enforced an islands of automation approach to architecture. Application integration has simply been the low-bandwidth bridge between these islands. As computing cycles, storage and networking have become comoditized, companies are rethinking their application architecture. This is a significant departure from the way most companies use applications today. In this sense, Web services will create a broadband connection between existing functions. Over time, the center of the corporate computing universe will become these connections, and such an infrastructure will spawn a new generation of business process software that spans functional organizations, existing applications and islands of automation. Web services may also create another dynamic. In order to use consistent interfaces and a relatively highbandwidth connection channel, many companies have chosen to use enterprise-wide software suites that span the front- and back-office. Today, the costs of integrating best-of-breed applications to create an enterprise architecture are prohibitive. Web services have the potential to re-energize those category specialists in the software industry that can offer the most effective solution to a specific problem. When all applications use the same interfaces, companies have the luxury of choosing only the best. Siebel s Universal Application Network Siebel Systems has been a consistent technical innovator since its inception. It was the first company to provide an enterprise-scale sales force automation system based on client/server technology. It expanded its technical base across channels (call center, Internet, partners, etc.) and across functions (marketing, customer service, business intelligence, etc.). With the release of Siebel 7, it moved to an Internet-based architecture. Over the last year, Siebel has made significant investments in its products to adapt to Web services protocols. During that period, it has also outlined its overall product direction for the next several years. Central to their vision is the Universal Application Network, Siebel s EAI initiative and its wedge product for Web services. UAN is a WS-based approach to integration with three principle components: an integration server, a business process design tool and a business process library. Together, these pieces create an immediate application integration solution and the foundation for a new generation of business process software. In an effort to attract industry support for the UAN initiative, Siebel chose to use commercially available technology for its integration server. The server coordinates inter-application communication using two main components: A transport layer This component provides a common service for queuing and delivering messages through both synchronous and asynchronous protocols. Adapters These interfaces connect an application to the transport layer. The adapter relays events from the application to the server and can probe the application (that is, it can import application configuration information into the integration server). As part of the UAN initiative, Siebel is working with companies like IBM, TIBCO, Vitria, and webmethods for transport products. The company remains technology neutral, conforming to both Microsoft s.net and Sun s J2EE (Java 2 Enterprise Edition) specifications. Like many other vendors, Microsoft is adapting its BizTalk Server to conform to the Siebel UAN standards. Adapters for each of these transport products (TIBCO s SAP Adapter, for example) will be compatible with UAN. 4

5 Figure 3. Siebel s UAN enables prebuilt business processes to span multiple applications. (Source: Siebel Systems) On top of the integration server, Siebel has built a business process design tool. This is a graphical interface for developing and configuring business processes. The tool can both import and export process definitions as XML. This product has two logical components: A business process flow modeler This workflow tool enables business analysts to describe business processes independently from underlying applications. A developer can then detail the specifics of how specific applications accomplish those steps (including transaction boundaries and error conditions). The tool imports and exports XML representations of the defined processes. A transformation modeler The modeler is a visual tool to define common objects and transformation maps. It imports and exports XSD (XML schema definitions) and XSLT (extensible stylesheet language transformations). Together these standards enable the user to map one XML document format to another. The final component of UAN is a business process library, which is a collection of predefined business processes. These processes can span multiple applications to automate cross-functional business actions like customer creation (which may touch marketing, sales, service, billing and manufacturing systems), claim handling (sales, service, accounts payable), closed-loop lead management (marketing, sales and partners), etc. The standard business process library incorporates best practices developed by Siebel and its partners. Processes in the library include business process flows and transformation maps (developed with the tools described above) and a set of common objects from Siebel and others. The common object library includes application data models compliant with industry-specific standards such as RosettaNet (supply chain standards primarily for the electronics industry), OAG (commercial flight information) and others. Each object has a unique identifier so that it can be recognized by multiple applications. Siebel provides common objects like customer, employee, product, etc. in standard XML format. 5

6 Siebel and Web Services The Siebel plan for Web services covers all three of the issues highlighted at the beginning of this Report. It will provide a more effective mechanism for EAI, it will create a new generation of enterprise applications, and it will create a new kind of software to automate processes that span corporate functions. A more effective mechanism for enterprise application integration We discussed Siebel s strategy for enterprise application integration in an earlier Report ( Extending Customer Relationships to the Back-Office with Siebel Software, January 2002). With the addition of the Universal Application Network, Siebel creates a revolution in its product suite. Traditionally, companies used point-to-point integration of individual applications. Connecting the customer service system to the ERP system was a single integration project, connecting service to sales another. Since most companies have dozens or hundreds of applications, the number of point-to-point integration projects grows geometrically with the number of nodes (to be specific, (n x (n 1))/2). Each integration project can be expensive and time consuming. When any application is upgraded or replaced, all of the nodes connected to it must be reimplemented. An earlier product, Siebel EAI, provided an excellent example of a point-to-point integration tool. The product was inexpensive, but all transformations had to be performed either in Siebel or the connecting applications limiting the reuse of business logic. Outbound messaging must be initiated through Siebel Workflow; inbound messages from the connecting applications. As our earlier Report discussed, Siebel also offered an Enterprise Integration Manager product. This software was more expensive, but was a many-to-many architecture using a hub-and-spoke or message broker approach. The product allowed transformation logic to be centrally located and enabled shared workflow management. This provided enhanced scalability and reuse, but at the cost of standardizing on the Siebel architecture. As a result of limitations such as these, companies have shown an increased interest in enterprise solutions suites that use a tightly coupled architecture, and a single database, or confederation of databases, as a common point of control. Companies like SAP, Oracle and PeopleSoft have traditionally taken this approach by providing integrated suites spanning CRM, ERP and supply chain software. This approach can be useful, but has its limitations. In a tightly coupled approach, the vendor must not only keep its applications state-of-the art, it typically must invest in proprietary integration server technology. Most of the enterprise suite vendors listed above are large companies, but do they have the resources to be the best at everything? A single-vendor, proprietary solution almost insures that companies will be forced to use applications of varying competitiveness. This is particularly true when new releases are planned. The underlying technology of individual applications does not evolve at a consistent rate. As a result, a small number of the applications in the suite tend to drive the release schedule. The ERP component, for example, may be forced to undergo more frequent upgrades to remain compatible than customers may prefer. Conversely, CRM modules may lag in capabilities to remain consistent with the supply chain application. Siebel UAN is also an improvement on another major approach to enterprise application integration Information Bus. Information buses are built to be high performance and tie disparate applications into a single, shared messaging infrastructure. This approach works well when a company wants to have a single architecture to integrate several applications. However, if the company wants to support processes that cut across these applications, there is a significant custom programming task. Information buses are a significant advance over point-to-point integration products, but they often lead to programming investments that are difficult, expensive and hard to maintain. In short, the UAN initiative is a significant advance for Siebel customers, systems integrators and other partners. It enables them to write reusable business logic that spans multiple applications. This logic can be built using best practices supplied by Siebel in the base product, and constructed from a library of available processes. Since the architecture is build upon common Web services standards, companies can tap into a growing community of programmers. Today and for at least the next year, most companies will use UAN as a mechanism to integrate Siebel applications with other enterprise software. However, two other aspects of the initiative require a brief discussion. 6

7 The infrastructure for a new generation of enterprise applications software It is no accident that UAN roughly coincides with the release of Siebel 7. UAN adds an additional dimension to Siebel s overall Smart Web Architecture. Siebel has now standardized not just on current Internet standards like HTML, zero footprint clients and server-based logic; they are moving rapidly into the next generation of software standards. New generations of Siebel software will include Web services as part of the company s diverse product set. WS will find their way into individual marketing, sales and customer service products in both horizontal and vertical versions. At least some other enterprise software vendors have followed Siebel s lead. SAP, for example, announced a new corporate architecture in January The SAP Enterprise Services Architecture (ESA) is a blueprint for complete, services-based business solutions based on Web services. SAP NetWeaver is the enabling technology for ESA. Like Siebel s UAN, NetWeaver is a comprehensive integration and application platform designed for developing cross-functional (or composite in SAP s terminology) applications. SAP NetWeaver provides multi-channel application access, an integration broker based on XML and process management for extracting, aggregating and analyzing structured business information across an enterprise. Like Siebel, SAP will support both the.net and J2EE standards. The infrastructure for software to automate processes that span corporate functions, partners and customers As Siebel, its customers and partners begin to automate cross-application business processes with UAN they are potentially developing a new approach to enterprise software. Today s applications are artifacts of an earlier age when computing, storage and networking technology was capable of creating only islands of automation. As a result, the focus over the last many years has been on developing software to automate processes within individual corporate functions (marketing, sales, service, finance, manufacturing, supply chain, etc.). Cross-functional applications required fairly low bandwidth connections between these islands. While automating intra-departmental applications is highly useful, much more value can be found in the delivery of cross-functional or inter-departmental solutions. This business process software focuses on automating the core functions of the company: find a new customer, support existing ones, service them, build a personalized product, etc. By providing higher level building blocks, UAN can raise the level of abstraction upon which these applications are constructed. The Bottom Line Web services have the potential to add significant value to corporate computing over the next decade. They will first demonstrate value as a better technology for enterprise application integration. Overtime, they will provide the foundation of a new generation of enterprise software to automate cross-functional business processes. The UAN approach will be highly useful to most companies. It also has the potential to redefine Siebel s role in the software industry. As a CRM specialist, Siebel has faced increasing competition from SAP, Oracle and PeopleSoft and other companies with enterprise software suites. With UAN, Siebel has changed the rules from integrated suites, to cross-functional business processes. Siebel s UAN may be a major step in changing the landscape of the software industry. Companies like SAP are moving quickly to adapt to Web services standards; Siebel customers will face a smoother transition to this environment than those using most other platforms will. To insure a smooth transition, companies should take an evolutionary, but expeditious approach to Web services. At a minimum, every company should address the following: Develop a corporate Web services strategy within the IT organization. Many CRM, e-commerce and corporate Web site initiatives were originally driven by marketing, sales and services organizations. WS will enter most companies through IT. This group must be able to describe not just the technology, but its benefits and costs. Enterprise application integration is an important focus of WS, but companies need a vision of how the technology can add value over time. Drive investment decisions from the business case. The technical lure of Web services is significant and projects will have a tendency to proliferate quickly. Each project should have a business owner who can describe the value of the project in measurable financial terms. 7

8 Develop a corporate Web services technology policy. At the most basic level, companies will need to determine their philosophy about.net and J2EE. Some companies will adopt one standard, others will enable them to coexist. It is important to implement this policy as quickly as possible. Inventory existing systems integration projects and prioritize their potential for Web services. Not all WS standards are in place and it may well be two more years before the entire suite is available. Insure executive involvement in industry-oriented WS standards groups. Many companies have technical staff representing them on their industry s XML initiatives. These have become important enough to require review by the senior management group. Evaluate the Web services strategy of each major technology vendor. This is particularly true of corporate standards for CRM, ERP and supply chain vendors. Siebel, SAP and other major companies have announced major initiatives in WS. Their strategies are real, not simply marketecture. Enterprise software vendors view Web services as the next major competitive opportunity in the computer industry. Preferred enterprise vendors should have strategies that span the three major aspects of Web services described above. Major enterprise vendors typically have a wedge product to lead their WS strategy (Siebel s UAN, SAP s NetWeaver, etc.). Before letting the thin edge under the door, understand the long-term implications of using the product extensively. Even when a product is based on WS standards, surrounding technology such as design tools, libraries, best practices, templates and other attributes can make it proprietary. Glossary XML extensible Markup Language SGML Standard Generalized Markup Language SOAP Simple Object Access Protocol UDDI Universal, Description, Discovery and Integration WSDL Web Services Description Language WSFL Web Services Flow Language XSD XML Schema Definition XSL extensible Stylesheet Language XSLT XSL Transformations J2EE Java 2 Platform, Enterprise Edition.NET Microsoft s strategy and product set for WS WSCI Web Services Choreography Interface About Extraprise Extraprise is an international consulting company, preferred integrator and trusted advisor specializing in customer relationship management (CRM). The company assists organizations design, implement and deploy a full range of CRM initiatives analytics, marketing automation, sales force automation, service, and contact centers. Extraprise consultants combine intellectual capital with industry best practices, proven technologies, and rigorous processes to deliver innovative solutions that solve clients business issues and always generate more value than fees paid. Extraprise is headquartered in Boston and London with offices across the U.S. and Europe. For further information on Extraprise services or the material featured in this report, please contact David Winterhalter (info@extraprise.com) or visit us on the internet at Extraprise Reports may not be duplicated, reproduced, stored in a retrieval system, or retransmitted without the express permission of Extraprise. The information contained in this publication is believed to be reliable, but not necessarily complete and its accuracy cannot be guaranteed. This Report originated in Boston. All content Copyright 2003, Extraprise Group, Inc. All trademarks are property of their respective holders. Boston London Amsterdam Dallas New York San Mateo tel info@extraprise.com tel +44 (0) infouk@extraprise.com