Creating Economic Value With Web Services

SDForum Web Services SIG
Tue Apr 8, 2003, 6:30pm-9:00pm, San Francisco
John Hagel III, Business Consultant and Author

These are some notes taken from a great presentation in SDForum by John Hagel. His web site and his book "Out of the Box" provide more in-depth information.

Vendor's presentation of the technology is different from the reality. They are their worst enemy in adoption.

Fundamental of economic. Look at what people are doing with the technology.

Board economic trend

Driving Force
  1. Technology innovation
  2. public policy shift (towards free economy)
Competition, uncertaintyNeed flexibility
Margin squeezecost reduction, collaboration, outsourcing
growth imperative 

Example I Dell

Use WS to greatly improve supply chain management.
Dell was already well known for efficient supply chain management.
Promote vendor collaboration.

Example II Merrill Lynch

Aggregate information from difference database and application.
Provide new services for customers.

Example III GM

Web services implementation

Cost and asset saving is a compelling proposition to business.

Early adoption concentrate on the edge, such as procurement, sales, customer interface. Today enterprise's internal operations are already well optimized. Cost saving opportunity is with partner automation.

2 adoption path observed

(One off implementation vs grand architecture)

Long term impact of WS

Stage 1 - Operational cost saving
Stage 2 - Refocusing the enterprise
Stage 3 - Growing the enterprise

Growth examples


Li & Fung (apparel)

When will tech spending recover?

Wrong question! How to sell in today's climate?
Focus on near term, targeted, modest investment. No regrets (micro-sales).
Big bang implementation, mega sales not coming back. (Uncertainty is subversive to big bang approach)

Created: 04/11/03