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					Customers: The G-force that will Pull Web Services into the Frame Author: Anna Pollock, Founder and CEO DestiCorp Limited th Date: March 20 , 2002 The web services literature is replete with white papers, articles and “blogs” extolling their potential virtues and benefits but largely from a technical perspective. Web services are welcomed by the IT community because they: 1. save time – code can be re-used and development cycles accelerated; 2. free up programming resources for more intellectually stimulating work; 3. save money, freeing up budgets for innovation (note: Fidelity Investments claim to have eliminated 75% of the hardware and software costs devoted to middle tier processing after investing in XML and web services); 4. enable investments in legacy applications to accrue a higher return; 5. extend reach to global markets by enabling “strangers” to trade, collaborate and exploit new opportunities; 6. enable higher levels of personalisation; 7. generate new revenues: Amazon is now generating income for allowing others to rent its billing services; FedEx are renting out their shipment tracking services; 8. enable internal collaboration between corporate departments and thereby increase efficiencies and reduce operating costs; 9. enable external collaboration between partners across firewalls and support cross fertilisation of ideas and support alliance building; 10. enable higher levels of automation and machine to machine processing. These are powerful arguments in their own right and can and should be used in Boardroom presentations to gain support for web service initiatives. Ecademy (www.ecademy.com) is encouraged to create a section of this site devoted to the Business Benefits of Web Services featuring case studies and ROI examples drawn from its own community of pioneering practitioners (any volunteers?). But compelling though they are, this author believes they overlook the most important reason why web services will soon dominate the techno landscape. Using web services will enable smart companies to satisfy – possibly even delight – their customers. The gravitational pull of consumer satisfaction sits like a black hole of a stellar vortex silently, stealthily but inevitably dragging the corporate world into a brave new future. The ride through the point of singularity will be rough – large corporations will “atomize” en route, spewing forth hundreds if not thousands of functional fragments during their passage. On the other side, enterprises will take a new form. They’ll be smaller, more agile, open and collaborative in attitude, focused on a task or function that they perform exceptionally well and will be utterly customer obsessed. On the other side of that black hole, a Copernican revolution will have occurred. Instead of the company occupying central stage (like the sun in the solar system or the spider in its web), the customer and their specific task will occupy the focus of multiple orbits of multiple suppliers working collaboratively to support the customer in their task. Our reasoning behind this colourful analogy is based on two observations: firstly, customers are deeply frustrated with companies and their on-line experience; and secondly, investors, shareholders and not a few executives are becoming disenchanted with customer behaviour. Some brief statistics regarding consumer frustration are presented in our earlier paper; Where’s Copernicus When You Need Him?) We believe that web services and the associated features of distributed, peer-to-peer, service-oriented architectures will really come into their own because there is no other method whereby customer’s demands for choice, flexibility, personalisation, affordability, and accessibility can be met profitably. It’s a classic chicken and egg story repeated: the web services “egg” will not get hatched until the corporate “chicken” realises there is no other way to proceed.

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The traditional product-focused and product inspired approach to marketing which uses the four P’s of Positioning, Promotion, Pricing and Placement to push a product/service/solution to a targeted group of customers encourages suppliers to adopt a narrow, fragmented and disjointed perspective of their customer – like looking at a giraffe through a fence. Most consumer’s purchases occur, however, within a holistic context of need that starts with a somewhat vague declaration of intent: for example, “I need a vacation”; “I have to move house”; I need to plan for retirement”; I want to educate my children”. This “declaration of intent” equates to the water droplet falling on the smooth surface of a still lake – the lake of commercial possibility – and, upon impact, generates a series of circular ripples that touch and embrace individual enterprises that can support the customer in achieving that intent. Or, if you prefer a less tranquil metaphor, the “declaration of intent” equates to the big bang of an exploding star whose gravity pulls enterprises into orbit around it. Regardless of your preference for loud or tranquil metaphors, the result is the same – as soon as a customer declares an intent, he or she embarks on a “cycle of need” that involves searching for alternatives, comparing, selecting, purchasing, assembling, experiencing and evaluating. While in this cycle, the customer occupies the centre of a web of relationships comprising a network of inter-dependent suppliers who share the same focus and objective: ensuring that the customer’s needs are met. Whether they realise it or not, these suppliers form a unique virtual and event-driven community or “business web” around that customer and his or her time-specific task. This “business web” is virtual, temporary and dynamic and encompasses not only the various suppliers but participants in those suppliers’ own value chains. We call the process of engagement between suppliers and customers Dancing with the Customer as we believe all commercial activities in the future will need to be calibrated and choreographed in a “cycle of service” that supports the customers’ “cycle of need”. Note: this cycle of service is event and profile driven – the customer calls the shots and takes the lead. The dance requires a two-way dialogue not only between supplier and customer but also between multiple suppliers who share responsibility for helping customers achieve their original intent. In a smoothly functioning ecosystem, customers will be able to pull towards them the information and services they need that are specific and relevant to their needs, their profile and their context. Winning suppliers will be those who deliver relevant, appropriate and timely services to facilitate those needs. Winning suppliers will also recognise that they cannot go it alone – their best chance of success lies in collaborating with suppliers of complimentary services and forming a supply community to satisfy the diverse and complex needs of today’s travellers. Or to quote Reed, “The most successful businesses on the Internet will hunt in packs”. (2) The Consumer’s Dilemma It’s late Thursday and Jon a city broker decides he and his new wife need a break. They declare their intent: a long weekend of romance and pampering. That intent triggers a requirement for a constellation of discrete web services (transfer to an airport, cattery service, home security watch, airline seats, taxi transfers, accommodation, theatre tickets, restaurant reservations, golfing tee-off reservations, bike rentals, guide books etc.) involving a multiplicity of service providers all necessitating hours spent searching, comparing, selecting, booking, confirming and multiple payments. Great when all goes according to plan but what happens when you want to change your mind? Alternatively, it’s late Thursday and Jan remind Jon that mother-in-law is staying next week and his determination to postpone badly needed bathroom renovations has met an irresistible force – Jan’s determination to fix it! That intent will trigger a requirement for a constellation of services and products (paint, tiles, grout, flooring, lighting, plumbing services, electrical

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services) all ideally colour –co-ordinated and properly sequenced and, again necessitating hours spent searching, comparing, selecting, buying, confirming and multiple payments. Now fast forward to a web services-enabled world in which Jon has successfully asserted his desire for that romantic weekend – anything is preferable to DIY! Jon logs on to his personal life agent and declares his intent. The “bot” (who knows Jon and Jan’s personal preferences and circumstances) sends out an RFP to various brokers (destination, tour operators, travel directories) and assembles three options for initial review. Jon and Jan select Jersey and specify a preferred departure time, hotel, tours, theatre choice and the agent negotiates, aggregates and informs J & J of the price and, after their approval, books all trip elements. All content, services and functionality used by the Life Agent and the th brokers and suppliers with which it deals is delivered as a web service. At the 11 hour, Jan declares that for reasons best known to her, mother-in-law has been invited to join them! Jon is tempted to declare another intent (I need a divorce) but resists and instructs the bot to change the hotel (mother-in-law is in a wheelchair), cancel the candlelit dinner for two and book 3 tickets to the Tom Jones concert and packs his earplugs… Despite his unfortunate change of circumstances, the entire weekend is planned and paid for with fewer than three instructions. A New Ecology This collaborative, event-driven team approach to satisfying customers’ needs will not only require the widespread adoption of web services but will also stimulate the emergence of a new ecology comprising five general types of enterprise species that will emerge in the overall business ecosystem : 1. Service /competency providers: individual enterprises that supply one or other of the following: goods and services, information, functionality (tools), quality assurance. These competencies or services linking to them will be made available via the web as XML-wrapped “web services” for invocation on demand. 2. Brokers: enterprises that aggregate services from the pool identified above and add value in the form of choice, quality assurance, independent evaluations, searching and comparing tools; 3. Channel Managers/Distributors: will provide conduits to customers and their agents and will include iTV channels delivered into the home, airline, hotel, office; web portals (wireless and otherwise), Call Centres, print media, kiosks etc. 4. Affinity Agents or Life Agents: These are the enterprises that are closest to the consumer and focus all their energy on serving the consumer. It is a symbiotic relationship. They exist to save the customer time and or money and draw down from the web those products and services that the customer needs to solve a problem, complete a task, or meet an objective. In return, the customer entrusts the agent with a substantial amount of personal detail (their personal profile) and encourages the agent to learn more about themselves and their preferences through the act of serving them. We call them Affinity Agents because we suspect they will attract users who have some form of affinity with each other. For example, they may focus on a market segment (“yuppies”, or retirees in the CD economic group); special interest groups (such as antique enthusiasts, ramblers, skiers, motor racing enthusiasts, Harley Davidson owners), or could be associated with a profession (e.g., lawyers or nurses) or belong to a similar church. We call them Life Agents because they will take care of all aspects of Life – from romance (dating agency), buying a house and organising one’s personal financial affairs, personal shopping, pension planning, raising children, helping take care of older parents.

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They will offer their member enormous convenience and savings due to their ability to procure in bulk, trawl the web for opportunities, compile user reviews from peers etc. While they do not yet exist in large number, several business pundits and visionaries have forecast their emergence including Farncome and Camrass, authors of The Atomic Corporation (3) and Hagel and Singer in Net Worth back in 1999. (4) Customers won’t have the time, the patience, or the ability to work out the best deals with information buyers on their own (nor will vendors have time to haggle, customer by customer). In order for consumers to strike the best bargain with vendors, they’ll need a trusted third party – a kind of personal agent, information intermediary, or infomediary – to aggregate their information with that of other consumers and to use the combined market power to negotiate with vendors on their behalf….we argue that companies playing the infomediary role will become the custodians, agents and brokers of customer information.(5) 5. Network Providers will create and supply the infrastructural glue that binds all participants together and will enable trade to occur in a safe, secure and efficient manner. Over time, all content and functionality (software tools) used by the acts in the tourism ecosystem will be supplied as XML wrapped “web services” that can be invoked and used over the Internet, assembled to create higher order applications and perform tasks. The Network Provider is a neutral agency that provides all the services necessary to connect buyers and sellers in a secure, reliable, managed fashion. (6)These services include Security (authentication, authorisation, encryption), Directory, Messaging, Orchestration, Billing & Metering, Quality Assurance) Note: network providers in this model equate to “Context Providers” identified in Don Tapscott’s (7) original anatomy of Business Webs and, in his view, are destined to achieve the lion’s share of the spoils. In conclusion, while the practical, technical and financial benefits to business of adopting web services are several and significant, it is the customer’s desire and need to be served effectively as a whole individual trying to complete one or a set of specific tasks that will ultimately result in the widespread adoption of web services. Responding to this desire and using web services will result in a new business ecology. New types of enterprise, novel forms of organisational structure, and new opportunities will surface. Most certainly, it will lead to different leadership and management styles than are being practiced today . We are indeed cursed – we do indeed live in the most interesting of times! Footnotes
1.

The term “business web” was first introduced by Don Tapscott in his book Digital Capital. Harnessing the Power of Business Webs, Don Tapscott, David Ticoll, Alex Lowy, Havard Business School Press 2. The Rule of the Pack, David Read, Harvard Business Report Reprint 1020C 3 These five types are working ideas being developed by DestiCorp for the travel and tourism industry but will likely apply in other vertical markets 4 The Atomic Corporation: A Rational Proposal for Uncertain Times, Roger Camrass and Martin Farncombe, Capstone 2001 5 NetWorth: Shaping Markets When Customers Make the Rules, John Hagel III and Marc Singer, Havard Business School Press, 6 Vitiris and the Web Services Ecosystem, Killdara.com, Whitepaper, 2001 7Digital Capital: Harnessing the Power of Business Webs, Don Tapscott, David Ticoll, Alex Lowy, Havard Business School Press

Anna Pollock is CEO of DestiCorp – a strategic consultancy that helps executives, entrepreneurs and individuals make some sense of the commercial world in which they operate in order to ignite innovative insights, dare to do bold things and know they are not alone.

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