Internet strategy the road to web services solutions irm press

i
IRM Press
Publisher of innovative scholarly and professional
information technology titles in the cyberage
Internet Strategy:
The Road to
Web Services Solutions
MatthewW.Guah
WarwickUniversity,UK
Wendy L. Currie
WarwickUniversity,UK
Hershey • London • Melbourne • Singapore
TEAM LinG

ii
Acquisitions Editor: Renée Davies
Development Editor: Kristin Roth
Senior Managing Editor: Amanda Appicello
Managing Editor: Jennifer Neidig
Copy Editor: Lisa Tosheff
Typesetter: Cindy Consonery
Cover Design: Joyce Li
Printed at: Integrated Book Technology
Published in the United States of America by
IRM Press (an imprint of Idea Group Inc.)
701 E. Chocolate Avenue, Suite 200
Hershey PA 17033-1240
Tel: 717-533-8845
Fax: 717-533-8661
E-mail: cust@idea-group.com
Web site: http://www.irm-press.com
and in the United Kingdom by
IRM Press (an imprint of Idea Group Inc.)
3 Henrietta Street
Covent Garden
London WC2E 8LU
Tel: 44 20 7240 0856
Fax: 44 20 7379 3313
Web site: http://www.eurospan.co.uk
Copyright © 2006 by Idea Group Inc. All rights reserved. No part of this book may be reproduced,
stored or distributed in any form or by any means, electronic or mechanical, including photocopying,
without written permission from the publisher.
Product or company names used in this book are for identification purposes only. Inclusion of the
names of the products or companies does not indicate a claim of ownership by IGI of the trademark
or registered trademark.
Library of Congress Cataloging-in-Publication Data
Internet strategy : the road to web services solutions / Matthew W. Guah and Wendy L. Currie, editors.
p. cm.
Summary: "This book tells you how to create, execute and evolve a customer-centric approach for
your Internet-based management strategy"--Provided by publisher.
Includes bibliographical references and index.
ISBN 1-59140-763-X (hc) -- ISBN 1-59140-764-8 (sc) -- ISBN 1-59140-765-6 (ebook)
1. Business enterprises--Computer networks--Management. 2. Information technology--Management.
3. Web services--Management. I. Guah, Matthew W., 1963- II. Currie, Wendy, 1960-
HD30.37.I573 2006
004.6'068--dc22
2005013815
British Cataloguing in Publication Data
A Cataloguing in Publication record for this book is available from the British Library.
All work contributed to this book is new, previously-unpublished material. Each chapter is assigned to at
least 2-3 expert reviewers and is subject to a blind, peer review by these reviewers. The views expressed
in this book are those of the authors, but not necessarily of the publisher.
TEAM LinG

iii
Internet Strategy:
The Road to Web Services Solutions
Table of Contents
Preface .................................................................................................. vi
Introduction ......................................................................................... viii
SectionI:StrategicApproachestoInternetforOrganizations
ChapterI.ApplicationServiceProvision ............................................. 1
Matthew W. Guah, Warwick University, UK
Chapter II. Web Services...................................................................... 8
ChapterIII.Concerns ......................................................................... 17
ChapterIV.Recommendations........................................................... 40
Section II: Case Studies
ChapterV.ConsideringtheImpactofBroadbandontheGrowth
andDevelopmentofB2CElectronicCommerce ............................... 48
Jyoti Choudrie, Brunel University, UK
Yogesh Kumar Dwivedi, Brunel University, UK
TEAM LinG

iv
ChapterVI.ATheoreticalApproachtoEvaluateOnlineand
TraditionalTradingontheNASDAQStockExchange ..................... 67
Haroun Alryalat, Brunel University, UK
Yogesh Kumar Dwivedi, Brunel University, UK
Jasna Kuljis, Brunel University, UK
Ray J. Paul, Brunel University, UK
ChapterVII.AdaptiveCollaborativeWorkandXMLWebServices:
BenefitsofApplicationintoInformationInfrastructureandHuman
Resources ............................................................................................ 86
Mayumi Hori, Hakuoh University, Japan
Masakazu Ohashi, Chuo University, Japan
Chapter VIII. Helping Users, Mentally: A Lesson Learned from
HypertextandWebNavigation ........................................................ 101
Paulus Insap Santosa, National University of Singapore,
Singapore
Chapter IX. Reducing the Costs of Doing Business:
Human Costs and Social Issues of IS/IT Strategies ........................ 135
Souad Mohammed, UK
Chapter X. From ASP to Web Services: Identifying Key
PerformanceAreasandIndicatorsforHealthcare .......................... 149
Wendy L. Currie, Warwick University, UK
SectionIII:ThrivingorNot
ChapterXI.FutureTrends................................................................ 178
ChapterXII.A21st
-CenturyToolforIntelligentEnterprises ......... 185
Mathew W. Guah, Warwick University, UK
ChapterXIII.Conclusions ................................................................ 227
TEAM LinG

v
Glossary ............................................................................................. 259
AbouttheAuthors.............................................................................. 313
Index................................................................................................... 318
TEAM LinG

vi
Preface
This book addresses the business issues and management concerns in rela-
tions to Internet strategies of organisations in the 21st
century. By so doing,
the editors hope this book will point medium- and large-sized businesses in
the proper direction, to manage emerging technologies, such as Web services
resources and strategies to their competitive advantage. With the phenom-
enon of Web services in its infancy, the authors have drawn from works of IS
pioneers Markus, Porter, Checkland, and others. Their intellectual contribu-
tions, plus findings from research work by both new and experienced aca-
demics in Europe, USA, and Asia, provide a framework for discussion.
Web services business model was borne out of the Application Service Provi-
sion (ASP) business model. ASP delivers personal productivity software and
professional support systems, assisting an intelligent enterprise in processing
information, solving business problems, developing new products, and creat-
ing new knowledge. The need to exploit Web services capabilities to preserve
and enhance organisational knowledge is clearly defined by this book.
This is not a textbook, but it encompasses all the practical areas in which an
information system strategist functions, and also those of IT and business man-
agers. The following criteria that are being used as the foundation for the best
of textbooks on information systems are all explored in this book. They are
Internet strategies and management concepts, the business and economic of
information systems environment, opportunities and information about ASP
and Web services, sociological aspects of Web services buyer behaviour, psy-
chological aspects that influence consumption of Web services applications,
strategic tools and tactics, market segmentation, Web services product life
TEAM LinG

vii
cycles and categories, commercialization, distribution, promotion, communi-
cations, organization, analysis, application integration, future aspirations of
service providers, ethical issues and much more.
The aim of this book is to disclose the motives and mechanisms of Web ser-
vices as it is developing and changing as the 21st
century unfolds. Internet
strategies cannot be described intelligently without exploring some fundamen-
tal features and problems of society as a whole. That many IT managers in
small and medium-size businesses are either directionless, like a boat without
a rudder, or are drowning beneath waves of Internet strategies management
theories that pass over their heads, and others that persist in spite of the fact
that they remain unproven, may well be a reflection of the draft of general
economic slowdown.
An IT manager or Information Systems strategist or Business Operations man-
ager will find that this book:
• Balances systems theory and proven Internet management frameworks
which are illustrated with practical cases;
• Explains the strategic management of Internet policies in terms of capa-
bilities of IT in business; and
• Provides a good guide to those who need to discover how to apply Internet
for strategic advantage of an organization.
Matthew W. Guah & Wendy L. Currie
Leamington, Warwickshire, UK
June 2005
TEAM LinG

viii
This book is about strategic direction of Internet strategies and the manage-
ment of strategic change to emerging technologies, in general, and Web ser-
vices, in particular. To deal with this complex topic we have structured this
book into three parts containing six main areas. The first section looks at a
comprehensive framework of the emerging technologies process upon which
this book is structured. This part also includes chapters on Application Ser-
vice Provision (ASP), Web services, Concerns, and Recommendations. These
chapters clarify the various issues relating to this new phenomenon in Internet
strategy.
Section II includes chapters on case studies from different parts of the world
showing how Web services are being used to benefit businesses. They show
leadership in the Internet strategic direction and decision-making and on cul-
ture and values as these are forces that determine how Internet strategy can
be managed within an organization.
Section III considers how a situation analysis for the future of Web services
business model might be carried out. The emphasis is on understanding the
future of new technology strategies and the continuously changing business
environment and technological resources. The functional subjects that relate
to the management of organizational technological resources and that under-
pin a study of Internet strategy are examined.
Following this Introduction is a Technology Review section that presents
the central theme of the historical shifts from a mainframe to a client server,
and now to Web services strategy. An observer of the client-server technol-
ogy would have found the task of accurately discerning the path of that tech-
Introduction
TEAM LinG

ix
nology during the last decade of the 20th
century very difficult. Similarly, the
reality of the Web services technology has not burst on the business scene
full-blown, but has evolved over some 5 to 10 years from the ASP business
model. Moreover, statistical evidence to define this emerging social and eco-
nomic reality has lagged behind the writers and commentators who have iden-
tified the important features of this significant change.
Chapter I contains ASP and discusses the rise and fall of this phenomenon in
a relatively short period. This is followed by a similar discussion for the Web
Services business model.
This will then be followed by Concerns which discusses the engine that is
driving the Web services industry. Just as the steam, electric, and gasoline
engines became the driving forces behind the Industrial Revolution of the early
1900s, so the Internet and high-speed telecommunications infrastructure are
making Web services a reality today. A resulting “information processing” in-
dustry is the business sector which is providing the impetus for this revolution,
with its increasingly improving array of hardware, software, and information
products and services. These technologies, in turn, are having and will con-
tinue to have profound impacts on business management, competitive advan-
tage, and productivity.
Having set the stage by describing the changing business environment for or-
ganizations today, Recommendations then moves to the need for each en-
terprise to fundamentally think its corporate strategy. The situation can be
compared to the railroad industry in the late 1800s. It had to change its mind-
set from one of buying up large land tracts and laying railroad ties to one of
moving goods and people from one place to another, so companies today
must reconsider their traditional lines of business as they begin operating in the
21st
century. For Web services vendors, it is not just a question of selling a
product, but of selling a solution to a customer’s problem. This is where the
lines between delivering the services and traditional versus emerging markets
are blurring and changing.
The qualitative dimension is as important in the Web services industry as the
quantitative dimension. Quality control must be built into the front end of the
service delivery cycle, not viewed as a last-minute check to be done just
before contracts are reviewed. Here is where the human factor is introduced
into our discussion. In essence, the intelligent enterprise is a distributed net-
work of human talent. Within the individual enterprise, outmoded human re-
sources management philosophies must be replaced by modern approaches
that maximize the brain contribution to the products and services, not just the
brawn contribution. The emphasis of Web services is on working smarter, not
TEAM LinG

x
just harder. Web services strategy requires businesses to rethink not just the
elements of their economic milieu, but also their political and social contexts.
This does not suggest some kind of radical shift away from the profit motive to
the quality-of-life motive. However, we do endeavor to point out that this
strategy presents both risks and opportunities for every business in the 21st
century. Much of this discussion implicitly recognizes that doing business in an
intelligent enterprise forces suppliers, producers, and consumers into far closer
proximity with one another than is the case in an industrial economy.
Before the concluding statements, we invite the reader to look at more forms
of Web service applications involving implementation issues from active re-
searchers in both Europe and Asia. Haroun Alryalat and his colleagues at
Brunel University, London, report on a strategy involving the Stock Exchange.
Mayumi Hori and Masakazu Ohashi both at Hakuoh University, Japan, and
Paulus Insap Santosa at the National University of Singapore, report on some
respectable projects taking place in Asia involving Web services in the distri-
bution of technology to that part of the world. Souad Mohammed clarifies
several hidden costs relating to the implementation of information systems in
the 21st
century. Matthew Guah and Wendy Currie take the reader through an
implementation of Web services in the UK National Health Service, summa-
rizing parts I and III within a live project.
Finally we examine the problem of redefining success in the business environ-
ment of the 21st
century in Future Trends. Central to this discussion is the
idea of adding value at each stage of the information systems life cycle. ASP,
as a form of technological accomplishment, had little meaning for businesses
and other organizations. Unless Web services can be linked to business inno-
vation, the challenge for business professionals is to find ways to improve
business processes by using Web services.
This book has been written to take the reader into the 21st
-century IS strategy
paradigm. Utmost attention is paid to integrate the current business and man-
agement ideas with the deployment of Web services as one of the new infor-
mation technologies. Yet, the book is rooted in the concepts that have emerged
over the decades of development of the IS discipline. Web services in terms
of its products and services has continued to evolve over its short history. As
these changes have progressed, the landscape of the Internet technology has
become crowded with new services, technologies, products, and transmis-
sion media. As the Internet has continued to evolve with the discovery of new
technologies and the integration of “older” technologies such as mobile com-
puters and broadband communications, new opportunities and markets within
this area of business have opened up. Web services, as a form of electronic
TEAM LinG

xi
commerce, can be the sharing of business information, maintaining business
relationships, and conducting business transactions by means of computer tele-
communications networks. Similar to the development of the Internet’s World
Wide Web, Web services has been changing both the ways organizations deal
with one another and the way internal corporate processes are carried out
with the assistance of telecommunication infrastructures. The capabilities of-
fered by Web services present an opportunity to redesign the business pro-
cesses of intelligent enterprises in order to reach new levels of performance.
The researchers whose work underpins this book did not operate in isolation
to the work of others in the IS and related fields. All through this book, se-
lected examples of the existing literature will be discussed under the various
headings of theory. Many examples and cases throughout the text have been
drawn from international business areas. The purpose is to describe some
interesting work, which was forerunner and inspiration to our research, while
maintaining the role of theory and case studies within the interpretive tradition
of IS research. The epistemology can be viewed as broadly interpretive, see-
ing the pursuit of meaning and understanding as subjective, and knowledge as
a social construction.
Technology Review
Change usually takes a long time, and the technology that transformed enter-
prises and the economy is no exception. Why should anyone be overwrought
about the slow growth of Web services? It took mainframe computers a de-
cade or two to become central to most firms. In fact, when IBM marketed its
first mainframe computer, it estimated that 20 of these machines would fulfill
the world’s need for computation! Minicomputers moved into companies and
schools a little faster than mainframes, but they were also considerably less
expensive. Even the ubiquitous PC took 5 to 10 years to become an impor-
tant part of work life. The road travelled by these pioneers was rocky. Actual
accomplishments seldom matched those initially envisioned. There were sev-
eral reasons for this shortfall—a general lack of computer literacy among us-
ers, a general lack of business literacy, and an ignorance of the management
role by information specialists, computing equipment that was both expensive
and limited by today’s standards, and so on (McLeord, 1993). Some IS re-
viewers believe that one error in particular characterized the early systems
above all others: they were too ambitious. Firms believed that they could build
TEAM LinG

xii
giant information systems to support all managers. With the benefits of hind-
sight, one can now describe systems designed then as being snowballed or the
task attempted being unmanageable. However, some firms stuck it out, in-
vested more resources, and eventually developed workable systems—although
more modest in size than originally projected—while other firms decided to
scrap the entire management information system idea and retreated to data
processing.
When the first computers were applied to business problems in the 1950s,
there were so few users that they had almost total influence over their sys-
tems. That situation changed during the 1960s and 1970s as the number of
users grew. It then became necessary to consider the combined needs of all
users so that the systems could function in an efficient manner. During the
1980s, the situation became even tighter when a new player entered the pic-
ture—the enterprise (McLeord, 1993). A stage of organization/staff reliance
on information systems started in the mid-1980s with demands that informa-
tion systems increased operational efficiencies and managerial effectiveness.
On the back of such evolution, strategic information systems gained impor-
tance as systems expected to help organizations compete. In the 21st
century,
information systems are being developed in an enterprise environment (see
Figure 4.1).
21st
Century: The Age of Information
Society
Beniger (1986) puts forth a seemingly influential argument that the origin of
the information society may be found in the advancing industrialization of the
late nineteenth century. As industrial plants increased their processing speed,
the need for increased resources to control manufacturing and transportation
resulted in a feedback loop wherein enterprises had to process information
ever faster. The demand for sophisticated information processing equipment
resulted in the development of computers. While the subsequent new tech-
nologies nurtured the development of an information society, the continuing
cycles of demand pull and supply push account for the progress in the field.
The Internet is simply a global network of networks that has become a neces-
sity in the way people in enterprises access information, communicate with
others, and do business in the 21st
century. The Internet contains a distributed
software facility that organizes the information on it into a network of interre-
lated electronic documents called the World Wide Web (WWW). WWW has
TEAM LinG

xiii
changed the face of computing, both individual and enterprises resulting in the
expansion and development of electronic commerce. The Internet is regarded
in the 21st
century as much more than a means of communication. It is also a
source of information and entertainment that facilitates the development of
electronic commerce. The initial stage of e-commerce ensured that all large
enterprises have computer-to-computer connections with their suppliers via
electronic data interchange (EDI), thereby facilitating orders completed by
the click of a mouse. Unfortunately, most small companies still cannot afford
such direct connections. Web services enable low-cost access to this service
and having a standard PC is usually sufficient to enter this marketplace.
The Internet has been a subject of enormous hype and speculation since its
explosion in late 1980s. However, Web services can most certainly be said to
be responsible for the latest debate surrounding its usage for purposes far
beyond its original scope. By the late 1990s, ASP-like business models were
applied by a proliferation of small businesses in the Western world, thereby
creating what sometimes seemed a cult status with people from many parts of
society talking about a “new breed of entrepreneurs.”
Beyond the problems that may arise from the systematization of information,
we suggest that there is within the discipline of Web services a model of infra-
structure and context which is foundational but inadequate. This is the code
model of Web services, deriving from the work of Sleeper and Robins taking
a pragmatic look at the emerging Web services market (Porter & Millar, 1985).
We will draw on a number of theoretical sources in search for an improved
foundation. A link is also made to the environment reality theory of perception
proposed by Little (1999).
Internet Strategy
Our examination of Internet strategy begins with a look at the understanding
of strategy in business and it’s purpose to achieving business goals. Nearly all
written work in the area of strategy are based on the classic book by Alfred
Chandler (1962), Strategy and Structure. The definition used in that book is:
The determination of the basic long-term goals of an enterprise and the
adoption of courses of action and the allocation of resources necessary
for carrying out these goals. (p. 13)
TEAM LinG

xiv
Chandler considered strategy to be about setting general goals and deciding
on the broad types of action and use of resources needed to achieve them.
These involved the overall size and scope of the organization concerned, the
mix of products or services being provided, and the organization’s core val-
ues. Such approach to strategy implies that strategies are the intended out-
comes of systematic, rational decisions by top managers about clearly defined
problems. The resulting strategic change or innovation would appear as a
linear, sequential process in which strategic analysis and choice would follow
unproblematic trend by strategy implementation.
It has been recorded that Chandler’s views of strategy goes without its cri-
tiques (Mintzberg, 1979, 1990; Quinn & Hilmer, 1994; Whittington, 1993).
Some of these authors have contrasted the idea of strategy as a deliberate,
consciously intended plan with strategy as an emergent property, evolving
incrementally and piecemeal out of the ideas and actions of people at different
levels of the organization. Such strategies may be articulated consciously by
top management in most successful organizations. Others consider such emer-
gent, adaptive, or incremental view of strategy assumes that the internal and
external environments of organizations are inherently ambiguous, unstable, and
unpredictable. Others believe strategy does not assume that managers in or-
ganizations can only influence events at the margin, simply adapting pragmati-
cally and opportunistically to continually changing circumstances. These au-
thors consider the essence of a strategy and its crucial importance in any pro-
cess of change or innovation is that it embodies the deliberate and conscious
articulation of a direction. Successful strategies require both an overall sense
of direction and a continuous adaptation to change.
For a deeper understanding of strategies and strategy development, it is im-
perative to recognize their strong links with organization culture, the deeper
level of basic assumptions and beliefs that are shared by members of an orga-
nization that operate unconsciously and define in a basic taken-for-granted
fashion an organization’s view of itself and its environment. It has become
even more accepted in the 21st
century that strategies are both rooted in, and
partly explained by, organization culture. Jon Clark in his book, Managing
Innovation and Change (1995), outlined how the original founders of many
of today’s large successful organizations—Ford in the USA, Marks & Spen-
cer in the UK, Pirelli in Italy, and Siemens in Germany—played a crucial role
in establishing their overall strategy and organizational culture. Clark (1995)
also shows that organizational culture is one of the most important areas of
strategy which can be influenced by top managers and visionary leaders within
the organization.
TEAM LinG

xv
Mintzberg (1979, 1990) shows strategies to usually exist at a number of lev-
els in any organization. These strategic levels can be generally distinguished
into corporate, business, and operational.
1. Corporate strategy is concerned with the overall size and scope of the
organization.Thisinvolvestheorganization’sbasicgoalsandobjectives,
its core values and overall profile, as well as the general allocation of
resourcestodifferentoperations.
2. Business strategy can also be referred to as competitive strategy and is
concerned with the choice of products or services to be developed and
offeredtoparticularmarketsandcustomers.Thisalsoinvolvestheextent
towhichthechoicesmadeareconsistentwiththeoverallobjectivesofthe
organization.
3. Operationalstrategyisconcernedwiththedifferentfunctionswithinthe
organization. These functions could be production or service delivery,
finance,personnel,research,ordevelopmentwhichallinfluenceandare
integratedwithinthecorporateandbusinessstrategiesoftheorganization.
The interaction and consistency between the different levels of strategy and
structure are crucial issues for the organizational performance.
Clark (1995) raises the level of a long-standing debate about the relation
between strategy and organization structure. Chandler (1962) phrased this
debate with a phrase that “structure follows strategy.” This implies that orga-
nizations should first plan their strategy before embarking on the process of
designing their structure to fit within such strategic plan. In contrast, Mintzberg
(1990) argued that strategies are unlikely to be decided without reference to
existing structures. The relationship between strategy and structure is likely to
be reciprocity rather than a one-way determination. Mintzberg (1990) para-
phrased Chandler’s “structure follows strategy” as the left foot follows the
right. Clark (1995) points out that multinational corporations face a number of
complex structural problems in developing strategies which are not faced by
small businesses or professional organizations.
TEAM LinG

xvi
References
Beniger, J.R. (1986). The control revolution: Technological and economic
originsoftheinformationsociety.Cambridge,MA:HarvardUniversity
Press.
Chandler,A.D.(1962).Patterninorganizationalanalysis:Acriticalexamina-
tion. Business History Review, 36(2), 233–.
Clark, J. (1995). Managing innovation and change. London: Sage.
Little,G.R.(1999).Paper1:Theoryofperception.RetrievedJune2002,from
www.grlphilosophy.co.nz
McLeord Jr., R. (1993). Management information systems: A study of
computer-based information systems (5th
ed.). New York: Macmillan.
Mintzberg, H. (1979). An emerging strategy of direct research.Administra-
tive Science Quarterly, 24(4), 582–589.
Mintzberg,H.(1990).Thedesignschool:Reconsideringthebasicpremisesof
strategic management. Strategic Management Journal, 11(3), 171.
Porter,M.E.,&Millar,V.E.(1985).Howinformationgivesyoucompetitive
advantage. Harvard Business Review, 62(4), 149–160.
Quinn, J.B., & Hilmer, F.G. (1994). Strategic outsourcing. Sloan Manage-
ment Review, Summer(39), 63–79.
Whittington,G.(1993).Corporategovernanceandtheregulationoffinancial
reporting. Accounting and Business Research, 23(91), 311.
TEAM LinG

xvii
Acknowledgments
So many people have played a role in the development of the ideas presented
here that it is difficult to know where to begin in acknowledging them. The
first draft of this manuscript was written while I was a PhD student at the
Centre of Strategic Information Systems in the Department of Information
Systems and Computing at Brunel University. All the staff at DISC, initially,
established a wonderfully hospitable environment for this enterprise.
I owe an inestimable debt of gratitude to Michael Livesey with whom I have
discussed many of the ideas developed herein and who read and made nu-
merous helpful comments and suggestions on several drafts that have been
incorporated in the final version of this book.
While I was writing this manuscript, I was reading Wendy Currie’s excellent
book Value Creation from e-Business Models (Elsevier Butterworth-
Heinemann, 2004). Her study clarified my thinking on many issues and con-
tributed to shaping the direction of my own work. I humbly appreciate her
continuous support and encouragement as I seek my way through the ‘trap-
doors’ of academic life.
This book would not have been possible without the cooperation and assis-
tance of the authors, reviewers, my colleagues and the staff at Idea Group
Publishing. The editors would like to thank people at Idea Group, namely:
Mehdi Khosrow-Pour for inviting us to produce this book, Jan Travers and
Amanda Appicello for their contributions, Diane Huskinson and Michele Rossi
for managing this project, especially for answering our questions and keeping
us on schedule. A special word of thanks goes to Ms. Kristin Roth, for her
diligence and determined stewardship during this laborious project.
TEAM LinG

xviii
Last but certainly not least my family (including Evelyn Christine, Michael
Appopo, Matthew Gbeyadeu and David Gbemie) who have all patiently borne
with me through dejection and inspiration as this book has evolved. Evelyn
has also provided a steady supply of patience, sound judgement and an inde-
fatigable supply of good nature for which I will continue to owe her consider-
ably.
TEAM LinG

Section I
Strategic Approaches
to Internet for Organizations
TEAM LinG

Application Service Provision 1
Copyright © 2006, Idea Group Inc. Copying or distributing in print or electronic forms without written
permission of Idea Group Inc. is prohibited.
Chapter I
ApplicationService
Provision
Abstract
Thischapternotonlydefinestheapplicationserviceprovisionphenomenon,
but also details the issues surrounding its emergence as an Internet
strategic module. It reports on several studies that concentrated on the
application service provision module impact on the day-to-day operation
of a business.
What is Application
Service Provision (ASP)?
According to the ASP Industry Consortium, an ASP is a third-party service
firmthatdeploys,manages,andremotelyhostssoftwareapplicationsthrough
centrally located services in a rental or lease agreement (ASP Consortium,
TEAM LinG

2 Guah
2000). Such application deliveries are done to multiple entities from data
centresacrossawideareanetwork(WAN)asaserviceratherthanaproduct,
pricedaccordingtoalicensefeeandmaintenancecontractsetbythevendor.
ASP is considered by many to be the new form of IT outsourcing, usually
referred to as application outsourcing. While the IT industry has become
accustomedtosellingsoftwareasaservice,theASPbusinessmodelisdifferent
due to its scale and scope of potential and existing application software
offeringstosmall,medium,andlargecustomers.Inaddition,thismodelenables
ASPstoservetheircustomersirrespectiveofgeographical,cultural,organiza-
tional,andtechnicalconstraints.TheapparentcomplexityoftheASPmodelled
to a taxonomy including Enterprise ASP, Vertical ASP, Pure-Play ASP,
Horizontal ASP, and ASP Enabler (Figure 1.1). An earlier evaluation of
differentASPbusinessmodelsresultedintofourbroadcategoriesofdelivery,
integration, management and operations, and enablement (Currie, Desai, &
Khan, 2004).
An important debate surrounding all ASP models is the extent to which
applicationoutsourcingisdifferentfromtraditionaloutsourcing.Figure1.2
providesabreakdownoftraditionalandapplicationoutsourcing.Probablythe
Initiation
Evaluation
Implementation
Integration
Services
Consolidation
1997
2003
2002
2001
2000
1999
1998
Full Service Providers (FSP)
Application Service Delivery (ASD)
Virtual Application Service Provider (VASP)
Application Centric
Customer Centric
Figure 1.1. The evolution of the ASP models
TEAM LinG

mostnoticeabledifferencebetweenthetwoiswithintherelationshipwiththe
customer.
ASP is a metamorphosis of software into a service that exists on the Web, or
often referred to by practitioners as Web-native software world. In this
model,agiantInternetprotocol(IP)network(calledtheInternet)isbeingused
toeffectivelyturnsoftwareintoaservicedrivenfunctionthatexistsasaone-
to-many option. The simple explanation for ASP is that a company delivers
application software from a central source, delivering it over a network
connectionandchargingafeeforitsuse.
ASPscanalsobedescribedasthedeliveryofpreconfiguredtemplatesoftware
fromaremotelocationoveranIPnetworkonasubscription-basedoutsourcing
contract.Thisisusuallyinaone-to-manyrelationshipandmustbeviewedas
apreimplementationoutsourcingcontractthatcanbebilledaspaymentfora
service—inrelationtotheUKmobilephonemarket,apay-as-you-goservice.
Figure 1.2. Three stages of IT outsourcing (Currie & Seltsikas, 2000)
TEAM LinG

4 Guah
Emergence of ASP
ThissectionfocusesontheemergingroleoftheASPmodel.Duringthelastfive
years,theASPphenomenonhasgrownconsiderably,withmanyestablished
andstart-upfirmsdevelopingtheirASPstrategies.Thereisagrowingaware-
nessthatfewactivitiesandprofessionshaveseensucharapidchangeoverthe
past years as the activities and professions related to the field of information
systems(Leeetal.,1995).Initiallycalled“appsontap,”thissourcingmodel
promisedtodeliverbest-of-breed,scalable,andflexiblebusinessapplications
tocustomerdesktops(Kern,Willcocks,&Lacity,2002).ASPwasthehottest
topicin2000–2001inwhatwasreferredtoinUSAas“practicemanagement
solution.”Well-establishedpracticemanagementsoftwarecompaniesinclude
Medic, Millbrook Corp., and Computer Sciences Corp. Other less-known
companies are Greenway Medical, Alteer Corp., and Perfect-Practice.MD.
Whilethesecompaniesofferremotehostingofsoftwaretotheircustomersin
the healthcare sector, they also promise the advantages of client-server
applicationswithouttheexpensiveinfrastructureoreventhestaffrequiredto
maintain it. Forecasts for the growth of the ASP industry vary, with Ovum
(Ring,2000)predictingitwillbe$25bnandDataquest$22.7bnby2003(ASP
IndustryConsortium,2000).ASPswillhaveasignificantimpactonoutsourcing
policies and practices if the business model successfully penetrates
underexploitedsectorssuchashealthcare.
TheearlyphaseoftheASPmodelappearedtorevisittheservicebureaumodel
of the 1960s and 1970s (Currie, 2000). During this period, many companies
signed outsourcing contracts with a service bureau. The fashionable term
“outsourcing” was rarely used, as the more narrow facilities management
contractsinvolvedmainframesdatacentresandbespokesoftware.Theservice
bureau model was moderately successful even though there were many
technical,communications,andfinancialproblemswhichprecludeditbeinga
viableoptionformanycompanies.
Inthiscurrentera,outsourcingwillcontinuetoundergoasignificantshiftfrom
thecentralizedcomputingofthe1960sand1970s,thedistributedcomputing
of the 1980s and 1990s, through to the remote computing in the 21st
century.
ASPswillplayacentralrolesincetheywillincreasinglyofferautilitymodelto
customers where the latter will purchase applications on a pay-as-you-use
basis (Currie et al., 2003).
TEAM LinG

Asthesehistoricalstageshaveevolved,thebasicstrategicresourcesandtools
ofeconomicactivityhaveshifted,ashasthenatureofworkandculture.Inthe
“post-Net era,” a term coined by editors of Issues of Strategic Information
Systems for its special issue in 2002, the application of knowledge and
intellectualtechnologyinresponsetotheorganizedcomplexityoftechnology,
organizational,andsocialinstitutionsbecomethecriticalfactorofproduction
andservices.
Thefindingsofmanystudiesprovidesubstantialevidencefortherealityofthe
ASPindustryintheUSAandthetransitionalphasewhichthenationaleconomy
hasmovedthroughinprogressingtoASPtechnology(Currie,2000).More-
over, the study also provided support for the notion that the basic sources of
wealth had shifted from capital to information and knowledge resources. If
ASP is a technological and economic reality, then what is its impact on
business? At the outset, it is clear that the Internet’s impact on business will
evolveovertimeandwillredefineourunderstandingofbusinessmanagement,
competition, and productivity. While we have been living with the conse-
quences of the Internet for many years, our understanding of these shifts in
humaneventshaslaggedbehindthereality.
Ironically,thisdelayedeffecthasbeenparticularlyacuteinEuropeinrecent
years, as compared to Japan and the USA. For example, in the USA,
preliminaryplanninginmovingIToutsourcingtowardanASPmodelemerged
as a general business goal in early 1980s, and by the late l990s it had been
translatedintoafull-scaleeconomicdevelopmentstrategy.Moreover,bythe
late 1990s, the USA was beginning to assess its economic development
strategies in the ASP industry, and the impacts such pronounced shifts in IT
industryprioritieswouldhaveonbusiness.
Eventoday,EuropeanbusinessandpoliticaldebatesoverISstrategicpolicy
remaintiedtotraditionalviewsofoutsourcing.Manyseniorexecutivesstill
remain sceptical or openly critical of the ASP phenomenon. These attitudes
among corporate executives and senior managers betray some fundamental
misunderstandingsnotonlyofthecurrentstateoftheASPindustryinEurope,
butalsoofthetermsandconditionsunderwhichtheadvancedASPindustry
intheUSAwillcompetewithEuropeanbusinessinthefuture.
Nearlyeveryparticipantinourresearchwithsmall-andmedium-sizecompa-
nies(SME)intheUKagreesthatimplementingASPsolutions(whichsome-
timesresultsinautomatingcertainworkflows)withoutfirstmakingnecessary
fundamentalchangesandimprovementsisthewrongwaytogoaboutbusiness
TEAM LinG

6 Guah
improvement.Thatisbecausenewandbetterproductsoftenreplaceexisting
ones. At the same time much-needed skills may not be backed up by job
descriptionsandfunctionalstatements.Andtoooftenthepoolingofparallel
andsimilaroperationsisnotconsideredwhenimplementinganASPsolution.
Preliminary findings of our research show some conflicting stakeholders
perceptionsforasuccessfulimplementationofsuchamodel.Thesepercep-
tionsnotonlyleadtoabetterunderstandingoftheethicalissuesinvolvedbut
also of the complex relationship of these ethical issues with other technical,
organizational,andsocialissuesthatneedtobemanagedeffectively.
What Does ASP Mean
for Your Business?
An application containing a database with all your customer information or
paymentduedateorrecordsofalle-mailisstoredandprocessedbyanoutside
providerinlieuofbeingonyourlocalnetwork.
Thismeansnooneinyourbusinessneedstoworryaboutmaintainingaserver
fullofallthisinformation.ItispainfulforanorganizationtohavetospendIT
resourcesmaintainingserversandthinkingofthedisasterswhenthesystem
goes down or an upgrade is needed. An ASP business model allows your
businesstheluxuryofhavinganoutsideserviceprovider,whospecializesin
server maintenance and support, to provide what should be an incredibly
reliableandsecureITsystems—somethingonlyafewbusinessescouldafford
beforenow.
A typical ASP has to submit to government audits, provide multiple servers
(redundancy),four-way(4-T3)replication,backuppowersystems,and24/7
support. Most small- and medium-size companies cannot afford all that and
keep up to date with necessary improvements. It also allows savings from
software licensing, enabling small- and medium-size companies to be as
powerful as their larger competitors. They do this by subscribing to an
inexpensive monthly ASP service giving them the chance to be virtually
unlimitedintheircapacitytostoreinformation.
AnASPsuppliesacompleteinfrastructureforyourbusinessandmanagesthe
networkandalltheapplicationsthatyouwishtorunonallthecomputerswithin
yourcompany.AnASPusuallychargesafixedfeetomanageyournetworkand
TEAM LinG

applications. One important factor in this business model is that the ASP is
allowed to manage your network. Your business does not need to operate its
own server; instead, your computers are connected to the ASP’s server
throughanopenconnection.OnemajorproblemwithASPuptake,sofar,has
been that the costs of such connections have not fallen significantly as
anticipated.Thiswouldhaveprovidedanattractivealternativetoincreasingly
expensive network management. Moreover, your company would know in
advance what the software and management will cost because it is being
charged a fixed fee.
References
ASPIndustryConsortium.(2000).Industrynews.RetrievedDecember2002,
from www.Aspindustry.org
Currie, W., Desai, B., Khan, N., Wang, X., & Weerakkody, V. (2003).
Vendor strategies for business process and applications outsourcing:
Recent findings from field research. Hawaii International Conference
onSystemsSciences,Hawaii.
Currie,W.L.(2000).ExpandingISoutsourcingservicesthroughapplication
serviceproviders.ExecutivePublicationSeries.CSIS2000/002.
Currie,W.L.(2004).Theorganizingvisionofapplicationserviceprovision:A
process-oriented analysis. Information and Organization, 14, 237–
267.
Kern, T., Willcocks, L.P., & Lacity, M.C. (2002). Application service
provision: Risk assessment and mitigation. MIS Quarterly Executive,
1(2), 113–126.
Lee, D.M.S., Trauth, E.M., & Farwell, D. (1995). Critical skills and knowl-
edgerequirementsofISprofessionals:Ajointacademic/industryinvesti-
gation. MIS Quarterly, 19(3), 313.
Ring, (2000). European market research: A report to the ASP Industry
Consortium.Ovum,March.
TEAM LinG

8 Guah
Chapter II
WebServices
Abstract
Organizations today are desperate to identify new opportunities in the
facilities provided by the Internet. Few have attempted to link
interorganizational, interfunctional and interpersonal levels of their
organizational processes via Web services. They have undertaken this
process in anticipation of reshaping and improving their core business
processes. This chapter details how Web services could potentially make
a significant different in the integration of software applications across
multiple platforms, sites and departments of an organization. The chapter
concludes by advising that organizations, in the process of reviewing their
Internet strategies, should at least investigate the potential impact of Web
servicesintegrationbecausethiscouldsoonerorlaterbecomeapermanent
business necessity and not just a competitive advantage material.
TEAM LinG

Web Services 9
What are Web Services?
Web services are the small software components that are available over the
Internet. Publishing as Web services makes the software applications more
reusable and shared by many more users. Web services enable business
partnering and thereby generate a great way of revenue streaming for the
companies.Italsohelpsinreducingthedevelopment,integration,andmainte-
nancecostofthesoftwareapplication.
Simple Object Access Protocol (SOAP) is the communication protocol that
helps in transporting the Extensible Markup Language (XML) messages
between the client and server. SOAP is nothing but XML over Hypertext
TransferProtocol(HTTP).WhentheWebserviceclientmakesarequest,the
SOAP client application programming interface (API) constructs a corre-
spondingXMLmessagecontainingtheremotemethodnameandvalueforits
parametersandsendstheXMLmessageoverHTTPtotheserverhostingthe
Web services. The server receives the XML message, executes the business
logic (may be written in Java), and sends the response back to the client.
The Web services paradigm includes a programming model for application
integrationthatdoesnotdiscriminatebetweenapplicationsdeployedinsideand
outside the enterprise. Integration and development of Web services can be
done in an incremental manner, using existing languages and platforms and
adopting existing legacy applications (Figure 2.1). One of Web services’
anticipatedbenefitsisthathumanend-userinteractioninthenormaldataentry
Webapplicationcanbereplacedbydirectapplication-to-applicationcommu-
nication.
When we talk about the benefits of Web services, we cannot overlook a few
issues in using Web services as well (Sleeper & Robins, 2002). The primary
issueissecurity.TheotherWebapplications,suchasJavaServlets,arebeing
accessedviaHTTPbrowser.Theuser-specificinformationcanbestoredinthe
HTTPsessionandusedforusers’sessiontracking.Afineexampleofthisisthe
shoppingcartapplication.
However,becauseWebservicesarebeinginvokedbythestand-aloneclient
applications,theservercouldnothaveanyideaabouttheuserwhoisactually
makingtherequest.Thiswouldposeamajorproblemthatanyunauthorized
user may consume our Web services and we do not have any control on this.
Another serious problem is the tampering of XML messages while they are
transmittedoverwire(Wilkes,2002).
TEAM LinG

10 Guah
Figure 2.1. Web services integration model
TEAM LinG

Web Services 11
UsingXML,businessanalystscandefinepoliciesandexpressthemasEML
documents. These documents can have sections that are encrypted and the
documents can be digitally signed, distributed, and then interpreted by the
securitymechanismsthatconfigurethelocalsoftware.Thiswillallowvarious
implementationstomapfromtheXMLdescriptiontoalocalplatform-specific
policyenforcementmechanismwithoutrequiringchangestotheinfrastructure.
Web Services Approach
This new approach introduces the proxy-based lightweight framework for
providingsecureaccesstotheWebservicesbeingrequestedbytheclients.The
basicideaistodeployaproxyWebservicethatreceivestherequestfromthe
endclientonbehalfoftheactualWebservice.Theproxyserviceauthenticates
theendclientbyvalidatingtheclient’scredentials,whichhe/shehadsentalong
withtheWebservicerequest.Iftheclientisauthenticatedsuccessfully,he/she
will be given access to the requested service.
The advantages of this approach are as follows:
• Itisbasedonmessage-levelsecurity.
• It does not only authenticate the user, but it also verifies the message
integrity.
• ItdoesnotdisturbtheactualWebservice,whichmayberunningonthe
productionserver.
• It acts like a plug-in; it can be removed and replaced with any other
solutionatanypointintime.
• IthidestheactualWebservice;theprocessisabstractedfromtheclient.
Theclientwouldnotknowthathis/herrequesthasbeeninterceptedand
processed by a proxy.
Integrating new handlers, such as auditing and notification, is very easy.
Whereasanauditinghandlerisformaintainingtheserviceaccessinformation,
anotificationhandlercouldbeusedforsendinge-mailstotheserviceproviders
in case of any problem in accessing the service.
Someone might now want to raise a question about the performance of the
proxyapproach.Becauseoftheintroductionofaproxyinthecommunication
TEAM LinG

12 Guah
path of end service, the invocation time will be a little longer. However, the
performancefiguresaremoreacceptable.
The proxy Web service uses Web services handlers to intercept XML
messagesusedinWebservices.Itcontainstwomajorcomponents,namely:
• Authenticationhandler
• Proxyclient
Needlesstosay,theauthenticationhandlerisrealizedbyusingaWebservice
handlerandtheproxyclientistheback-endcomponent.Thetwocomponents
are packaged into a single Web service. While the authentication handler
authenticatestheclient,theproxyclientinvokestheactualWebservice.
Tostartwith,theendclientsendstherequesttotheWebserviceproxyalong
withitscredentials.Thecredentialscouldbeeitheracleartextpasswordora
digitalcertificate.Incaseofbasicauthentication,thecredentials(usernameand
password) need to be sent as HTTP header parameters. In the case of
advancedauthentication,theendclientsignstheXMLmessagewithhis/her
digital certificate and sends the signed XML message to the server. Now the
client has done its job.
On the server side, the authentication handler acts as an XML interceptor,
which receives the XML message and the HTTP header parameters, if any.
Dependingonthetypeofauthenticationmechanismneeded,thecorresponding
Figure 2.2. Proxy-based approach to Web services (www.developer.com/
articles)
WS 1
WS 2
TEAM LinG

Web Services 13
implementationisinvokedtoverifythecredentials.Byprovidingmanyhooks,
differentkindsofimplementationsfortheauthenticationcouldbeintegrated
veryeasily.TheLightweightDirectoryAccessProtocol(LDAP)servercanact
asanACLrepository,whichstoresalltheclients’profiles.
In the process of authenticating the client, the credentials being sent by the
clientscanbeverifiedagainstthecredentialsstoredintheACLrepository.If
they are found to be matching, the user is authenticated successfully. Other-
wise,theauthenticationprocessisafailureandthehandlerwillsendthefailure
message to the end client. In the case of successful authentication, the proxy
client invokes the actual Web service by constructing a new SOAP message
and sending it to the server hosting the actual Web service.
As far as the end client is concerned, he/she receives the response from the
proxy Web service and the whole logic of authentication and actual service
invocationisabstractedout.Theotheradvantagesofthisnewproxyapproach
over other products are as follows:
• Lightweightframework
• Low cost
• Easytointegrate
• Quick to deploy
Webservicesarenotadisruptiveapproachtohostedservices,rather,theyare
anadditivestepforward.Theywillprovideastandards-basedwayfordifferent
servicesandapplicationstointeroperate,whichwillgreatlyreducetheintegra-
tionhurdlesASPshavelongfaced.Intheprocess,Webservicewillalsogive
ASPs increased flexibility to create and deliver more personalized hosted
solutionsfortheircustomers.
ConsideringWebservicesarecreatedanddistributedbymultipleentities,an
ASP would not be able to ensure that individual Web services will be
developedorrunontheinfrastructureoftheirchoice. However,theASPmust
developanddeployitsownserviceswithinfrastructurethatcomplieswithWeb
servicesstandards.Thiswillensurethatservicescanefficientlyinteractwith,
and take advantage of, other Web service components.
TEAM LinG

14 Guah
Web Services’ Impact
In the seemingly fast-paced world of the 21st
century, change is the only
constantandthereforeeventhorizonsareimmediate;businessescannotpredict
whattheywillneedorhowtheywillactinayear’stime.Webservicesarethe
currenttoolsbestsuitedtotheabilitytobridgethemultiplicityandcomplexity
ofexistingITinfrastructures.SuchusefulnessofASPtoanintelligententerprise
isasimportantasanyotherinthe21st
-centurycollaborativebusinessenviron-
ment.Webservicesareself-contained,modularbusinessprocessapplications
that Web users or Web connected programs can access over a network—
usuallybystandardizedXML-basedinterface—andinaplatform-independent
and language-neutral way. This makes it possible to build bridges between
systems that otherwise would require extensive development efforts. Such
servicesaredesignedtobepublished,discovered,andinvokeddynamicallyin
adistributedcomputingenvironment.Byfacilitatingreal-timeprogrammatic
interaction between applications over the Internet, Web services may allow
companiestoexchangeinformationmoreeasilyinadditiontootherofferings,
suchasleverageinformationresources,andintegratebusinessprocesses.
Users can access some Web services through a peer-to-peer arrangement
rather than by going to a central server. Through Web services systems can
advertise the presence of business processes, information, or tasks to be
consumed by other systems. Web services can be delivered to any customer
device and can be created or transformed from existing applications. More
importantly,Webservicesuserepositoriesofservicesthatcanbesearchedto
locatethedesiredfunctionsoastocreateadynamicvaluechain.Thefutureof
Webservicesgoesbeyondsoftwarecomponents,becausetheycandescribe
theirownfunctionalityaswellaslookforanddynamicallyinteractwithother
Webservices.Theyprovideameansfordifferentorganizationstoconnecttheir
applicationswithoneanothersoastoconductdynamicASPacrossanetwork,
nomatterwhattheirapplications,design,orrun-timeenvironment.
Web services represent a significant new phase in the evolution of software
development and are unsurprisingly attractive to a great deal of media and
industryhype.LikealmostallnewInternet-relatedtechnologies,theimmediate
opportunitieshavebeenoverstated,althoughwebelievetheeventualimpact
couldbehuge.ThiscanbedemonstratedbytheimmediateandkeyroleofWeb
serviceswhichistoprovideaparadigmshiftinthewaybusinessmanagesIT
infrastructure(Hondo,Nagaratnam,&Nadalin,2002).Itprovidesintelligent
TEAM LinG

Web Services 15
enterpriseswiththecapabilityofoverturningtheacceptednormsofintegration
and thereby allowing all businesses to rapidly and effectively leverage the
existingITandinformationassetsattheirdisposal.
Intelligententerprisescurrentlyrunninganoutsourcingservicearealreadyseen
to be one of the early gainers of the Web service revolution. However, there
will be others as enterprises discover the hidden value of their intellectual
assets. Considering most enterprises have until now used the Internet to
improveaccesstoexistingsystems,information,andservices,weenvisagethe
dayswhenWebservicespromisenewandinnovativeservicesthatarecurrently
impossible or prohibitively expensive to deploy. With such developments
anticipated to promote the ASP business model, Web services integration is
considered to be at the heart of this expectation. Through this process of
connectingbusinesses,ASPswillbeabletoquicklycapitalizeonnewoppor-
tunitiesbycombiningassetsfromavarietyofdisparatesystems,creatingand
exposing them as Web services for the end game of fulfilling customer
expectations.
ItisourviewthatanyintelligententerpriseconsideringtheASPbusinessmodel
shouldatleastinvestigatethepotentialimpactofWebservicesintegrationas
thiswillsoonerorlaterbecomeanotherpermanentbusinessnecessityandnot
a competitive advantage material. Those intelligent enterprises that have
adoptedoursuggestedapproachwillnotonlygainadvantagenowinbusiness
for lower costs and better return on assets, but are also expected to develop
valuable experience for the first decade of the 21st
century. Considering the
Internet’s history, as Web services become the standard and the expertise of
ASP become more established, it should become the norm.
Figure2.3showsthatholisticapproachtotechnologyalwaysseemstowork
betterthanpiecemealapproachtoinformationsystemssolution.
Web Services, as it is currently is like a two-legged table. A version of Web
Services Plus being practiced by a few vendors after the dot.com crash is
representedbythethree-leggedtableabove.However,anevenmoresuccess-
fulmodelofWebServicesPluswouldbeaproperlyarchitecturedfour-legged
table, as presented above. The analogy here is that a two-legged table is less
stablethanathree-leggedtablewhileafour-leggedtableisevenfirmer(Figure
2.3).
TEAM LinG

16 Guah
• Technology
• Application
• Technology
• Application
• People
• Technology
• Application
• People
• Work Flow
Figure 2.3. Evolution of Web services
Conclusion
This chapter has discussed Web services and the security issues involved in
usingWebservices.Italsobriefedyouaboutthevarioussolutionsavailableand
howtheproxy-basedapproachcanbeveryusefulforsecuringWebservices.
References
Hondo, M., Nagaratnam, N., & Nadalin, A. (2002). Securing Web services.
IBM Systems Journal, 41(2).
Sleeper,B.,&Robins,B.(2002).Thelawsofevolution:Apragmaticanalysis
oftheemergingWebservicesmarket.AnanalysismemofromtheStencil
Group. Retrieved April 2002, from www.stencilgroup.com
Wilkes, L. (2002). IBM seeks partners to drive adoption of XML Web
services. Interact, February.
TEAM LinG

Concerns 17
ChapterIII
Concerns
Abstract
As evidence relating the reality and basic features of the application
service provider (ASP) market continues to grow, there begins to be less
concern about confirming that any structural economic shift has continued
historically, and more concern about understanding how the ASP industry
is performing, and its impacts on productivity, investment, corporate
capital formation, labor force composition, and competition. The
relationship between the traditional outsourcing and the “latest wave” e-
sourcing on the one hand, and Internet investment productivity on the
other, is at the centre of the IT strategic problem confronting corporate
management in the 21st
century.
Intelligent Enterprise
Business Environment
Anintelligententerpriseexistswithinseveralenvironmentalelements.Theseare
theenterprisesandindividualsthatexistoutsidetheintelligententerpriseand
haveeitheradirectorindirectinfluenceonitsbusinessactivities(seeFigure
TEAM LinG

18 Guah
3.1).Consideringintelligententerprisesareoperatingindifferentsectors,area
ofemphasis,andwithdifferentpoliciesandstrategies,theenvironmentofone
enterpriseisoftennotexactlythesameastheenvironmentofanother.
Thebusinessenvironmentforintelligententerprisesincludestheenterpriseitself
and everything else that affects its success, such as competitors, suppliers,
customers, regulatory agencies, and demographic, social, and economic
conditions.AproperlyimplementedASPbusinessmodelwouldprovidethe
meansoffullyconnectinganintelligententerprisetoitsenvironmentalelements.
As a strategic resource, ASP helps the flow of various resources from the
elementstotheenterpriseandthroughtheenterpriseandbacktotheelements
(see Figure 3.1). Some of the more common resources that flow include
informationflowfromcustomers,materialflowtocustomers,moneyflowto
shareholders,machineflowfromsuppliers,andpersonnelflowfromcompeti-
tors and workers’ union.
Looking at Figure 3.1, one can see a generalized theory of enterprise’s
perception(Little,1999).Thetheoryissufficientlyimaginativelymotivatedso
thatitisdealingwiththerealinnercoreoftheASPproblem—withthosebasic
relationshipswhichholdingeneral,nomatterwhatspecialformtheactualcase
may take.
Intelligent
Enterprise
Financial
Community
Environmental
Movements
Competitors
Worker’s
UnionShare
Holders
Suppliers
Customers
Education /
Researchers
International
Government
Charities /
NGO
National
Government Local
Government
Figure 3.1. A tool for controlling influences in a complex environment
TEAM LinG

Concerns 19
Anintelligententerprisecansucceedonlybyadaptingitselftothedemandsof
its external environment, which is often represented by a number of groups
(formallycalledstakeholders)thataffecttheorganization’sabilitytoachieveits
objectives or those affected by it. Stakeholders other than participants and
customersformanotherimportantpartofthecontext.Stakeholdersarepeople
withapersonalstakeinanASPsystemanditsoutputseveniftheyareneither
itsparticipantsnoritscustomers.Permanentamongsuchgroupsarecustom-
ers, distributors, competitors, employees, suppliers, stockholders, venture
capitals,tradeassociations,governmentregulators,andprofessionalassocia-
tions.Animportantrolefortheinformationsystemsistokeeptheorganization
informedoftheactivitiesofallthesestakeholdersandsimilarlystakeholdersare
keptinformedabouttheactivitiesoftheorganization.
Zwass (1998) describes an organization as an artificial system. He further
defines an organization as a formal social unit devoted to the attainment of
specificgoals.Withnotificationthatabusinessenterprise,asasystem,hasto
generateprofit,thoughitmayalsopursueotherobjectives,includingemploy-
mentprovision,andcontributingtoitscommunitygenerally.Zwass(1998)also
restricts the value measurement of an artificial system to two major criteria:
effectiveness (the extent to which a system achieves its objectives) and
efficiency(theconsumptionofresourcesinproducinggivensystemoutputs).
Consideringthatintelligententerprisescompeteinaninformationsociety,the
requirementsforsuccessfulcompetitiondependsontheenvironment.Inthe
case of ASP, such environment presents several serious challenges, and the
role of intelligent enterprises information systems has evolved over time as
competingenterprisesattempttomeetthesechallenges.Fewenterpriseshave,
however,identifiedopportunitiesfordeployingstrategicinformationsystems
that have proven success in the competition process by analyzing the forces
actinginthemarketplaceandthechainsofactivitiesthroughwhichtheydeliver
products and services to that marketplace.
Infrastructure Issues
Infrastructure is the resources the system depends on and shares with other
systems.Infrastructureistypicallynotunderthecontrolofthesystemsitserves
yetitplaysanessentialroleinthosesystems.ForASPthetechnicalinfrastruc-
turetypicallyincludescomputerhardware,telecommunicationfacilities,and
appropriatesoftwaredesignedtorunontheInternet.Examininginfrastructure
TEAM LinG

20 Guah
mayrevealuntappedopportunitiestouseavailableresources,butitmayalso
revealconstraintslimitingthechangesthatcanoccur.
Evaluationofinfrastructureisoftendifficultbecausethesameinfrastructure
maysupportsomeapplicationsexcessivelyandothersinsufficiently.Drawing
from Porter and Millar’s theory that information systems are strategic to the
extent that they are used to support or enable different elements of an
enterprise’s business strategy, this paper proposes a framework that IS in
largerorganizationalsystemsmayenabletheireffectiveoperationormaybe
obstacles (Porter & Millar, 1985). In an earlier paper we use the UK’s
National Health Service’s system infrastructure and context as two distinct
meansofdeterminingimpactonlargersystems(Guah&Currie,2002).
Infrastructure affects competition between businesses, geographic regions,
andevennations.Inadequateinfrastructurepreventsbusinessinnovationand
hurtsintelligententerpriseefficiency.Whileeveryinternationalbusinessperson
canseethatthingshavechangedvastlyinmostofAfricaandSouthAmerica,
thesignificanceofinfrastructureasacompetitiveenablerorobstaclehasclearly
not changed. That is because infrastructure consists of essential resources
sharedbymanyotherwiseindependentapplications.Alocalregion’sphysical
infrastructureincludesitsroads,public,transportation,powerlines,sewers,
andsnowremovalequipment.Itshumanandserviceinfrastructureincludes
police, fire, hospital, and school personnel. A region’s physical and human
infrastructurecanbeeitheranenableroranobstacleandisthereforeacentral
concerninmanybusinessdecisions.TheimportanceofcertainISinfrastructure
elementsserveasakeymotivationforthesuccessfulimplementationofASP.
The required IS infrastructure raises a broad range of economic, social, and
technicalissuessuchaswhoshouldpayforinfrastructure?Whoshouldhave
access to/control over them and at what cost? Which technology should it
include?WhereASPisinvolved,theeconomicquestionoftenputstelephone
companiesagainstcablecompanies,bothofwhichcanprovidesimilarcapa-
bilitiesformajorpartsofthetelecommunicationssystem.Fromcertainview-
points,itcanbeconsideredtheresponsibilitiesofgovernmenttoensurethata
nationalITinfrastructureisavailableasakeymotivationforthepreviousbuzz
words“informationsuperhighway.”
Justaslocalregionsdependonthetransportationandcommunicationinfra-
structure, infrastructure issues are important for ASP implementation and
operation. These systems are built using system development tools; their
operationdependsoncomputersandtelecommunicationnetworksandonthe
ISstaff.Deficienciesinanyelementofthehardware,software,orhumanand
TEAM LinG

Concerns 21
serviceinfrastructurecancrippleaninformationsystem.Conversely,awell-
managedinfrastructurewithsufficientpowermakesitmucheasiertomaximize
businessbenefitsfromASP.
Inadequacy of Existing Infrastructure
Most people would agree that motorways such as the M4, M6, and M1
together with railways up and down the country are a part of the UK’s
transportationinfrastructure.Transportationisvitaltotheeconomy;itmakes
themovementofgoodsandpeoplepossible.Economicinfrastructureprovides
afoundationonwhichtobuildcommerce.Isthereatechnologyinfrastructure?
At the national level, there is a communications infrastructure in the form of
networks that carry voice and data traffic. In recent years, the Internet has
become an infrastructure that ties a wide variety of computers together. The
Internethighlightsthefactthataninnovationwhichbeganasanexperimentcan
maturetobecomepartoftheinfrastructure.
InfrastructurebeginswiththecomponentsofASP,hardware,telecommunica-
tion networks, and software as the base. A human infrastructure of IS staff
membersworkwiththesecomponentstocreateaseriesofsharedtechnology
services. These services change gradually over time and address the key
businessprocessesoftheintelligententerprises.Noninfrastructuretechnology
isrepresentedbyapplicationsthatchangefrequentlytoservenewstrategies
andopportunities(Weill,1993).
Itsoundsinpracticethatmuchofthejustificationforinfrastructureisbasedon
faith. Weill (1993) did find one firm with a creative approach to paying for
infrastructure. The company required careful cost-benefit analysis of each
project.Whenthisshowedhigher-than-necessarybenefits,itwasloadedwith
infrastructure costs to take up the slack. In essence, the company added in
“infrastructuretax”toprojects,notunlikeairlinetickettaxestopayforairports.
Infrastructureisvital,butinvestmentsinitarehardtojustifyifyouexpectan
immediatereturn.TheSingaporeexamplepresentstheclassiccaseforinfra-
structure;asmallamountofinvestmentandguidancecreatesafacilityonwhich
many organizations can build. Networking in Singapore has the potential to
transform the nature of commerce on the island and to help achieve the city-
state’sgoalsforeconomicdevelopment.
TEAM LinG

22 Guah
Telecommunications: Facilitating ASP Emancipation
Telecommunicationsistheelectronictransmissionofinformationoverdis-
tances. In recent years this has become virtually inseparable from computer
withapairedvaluethatisvitalforintegratingenterprises.Mostenterprisesin
the 21st
century have access to some form of telecommunications network,
which is simply an arrangement of computing and telecommunications re-
sourcesforcommunicationofinformationbetweendistantlocations.These
enterprisesareusuallyusingoneoftwotypesoftelecommunicationsnetworks
which can be distinguished by their geographical scope: local area network
(LAN)andwideareanetwork(WAN).LANisaprivatelyownednetworkthat
interconnectsprocessors,usuallymicrocomputers,withinabuildingorona
compoundthatincludesseveralbuildings.Itprovidesforhigh-speedcommu-
nicationwithinalimitedareawhereuserscansharefacilitiesconnectedtothe
network. On the other hand, WAN is a telecommunications network that
coversalargegeographicalareawhichlargebusinessesneedtointerconnect
their distant computer systems. Computer networks differ in scope from
relatively slow WAN to very fast LAN. There are several topologies and
channel capacities responsible, which the objective of this chapter does not
permitofadetailedexploration.
ASPs use WAN as a fundamental infrastructure to employ a variety of
equipment so that the expensive links may be used efficiently. The various
equipmentscontrolthemessagetransfersandmakesharingthelinksamonga
number of transfers possible. An increasing number of ASP customers have
user PCs that are connected to a LAN that communicates with the WAN via
a gateway. In certain cases the ASP may offer common carriers and provide
value-addedservicethatcanbecombinedwithprivatenetworkstocreatean
overallenterprisenetwork.
Asane-commercephenomenon,afewoftheessentialsofanASPinfrastruc-
ture are common carriers, value-added networks, private line, and private
networks. Common carriers are companies licensed, usually by a national
government,toprovidetelecommunicationsservicestothepublic,facilitating
thetransmissionofvoiceanddatamessages.Asmostcountriespermitonlyone
common carrier, the service can be broken down and leased as value-added
networkstovendorswhothenprovidetelecommunicationservicestotheirown
customers with added values that could be of various sophistications. For
increasedspeedandsecurity,anenterprisemaynotwanttosharewithothers
andcouldtaketheoptionofleasingitsownprivatelinesorentirenetworksfrom
TEAM LinG

Concerns 23
acarrier.Ithasbeenproventhatleasinglinkscanresultinsavingsfromhigh-
volumepoint-to-pointcommunications.
TheabovearetheapparatusthroughwhichanASPusestelecommunications
togiveitscustomerthecapabilitytomoveinformationrapidlybetweendistant
locations and to provide the ability for their employees, customers, and
supplierstocollaboratefromanywhere,combinedwiththecapabilitytobring
processing power to the point of the application. As shown earlier in this
chapter, all this offers an ASP customer the opportunities to restructure its
businessandtocapturehighcompetitivegroundinthemarketplace.
Issues of Security
ConsideringtheASPindustryisridingonthebackoftheInternet’sovernight
success,thehighlypublicizedsecurityflawshaveraisedquestionsaboutASP
suitabilitytoserveasareliabletoolforthepromotionofintelligententerprises
forthe21st
century.AnASPvendorcouldbeforgivenforthinkingtheprimary
servicetoitscustomersistoprovideconnectionsbetweenpossiblymillionsof
computerslinkedtothousandsofcomputernetworks.However,thepreven-
tion of unauthorized users who steal information during transmission, who
sabotage computers on the network, or who even steal information stored in
thosecomputersaremajorpartsofthevendor’sresponsibilities.Exploitingthis
flawmightpermithackerstogaincontrolofdesignatedserversandthenaccess
ordestroyinformationtheycontain.Aslongastheserisksarenotasfarfetched
asonemighthope,customerswouldcontinuetobewaryabouttheuptakeof
ASP business model (Currie, Desai, Khan, Wang, & Weerakkody, 2003).
The many break-ins and other general security problems occurring with
Internet/intranet demonstrate some of the risks of engaging in any form of
businessmodellinkingtotheInternet.ManyASPvendorshavetriedtoreduce
thedangerusingfirewallsandencryptionsbutsuchmaneuversnotonlyreduce
risk, but they also reduce the effectiveness of a networked environment (see
Figure 3.2). The IT community has generally accepted that effective use of
encryptionandfirewalltechniquescouldeliminatemuchoftheriskrelatedto
unauthorizedaccessanddatatheft.
Doesanymathematicalencryptionguaranteeabsolutesecurity?No.Justasa
physical lock cannot provide absolute safety, encryption cannot guarantee
privacy—ifathirdpartyusesenoughcomputersandenoughtime,itwillbeable
tobreakthecodeandreadthemessage.However,bychoosingtheencryption
TEAM LinG

24 Guah
methodcarefully,designerscanguaranteethatthetimerequiredtobreakthe
code is so long that the security provided is sufficient. It is advisable that
intelligententerpriseskeepthisprincipleinmindwhenthinkingaboutInternet
security.Whensomeoneassertsthatanencryptionschemeguaranteessecu-
rity,whattheyactuallymeanisthatalthoughthecodecanbebroken,theeffort
andtimerequiredisgreat.Thus,anencryptionschemethatrequireslongertime
to break than another scheme is said to be “more secure.”
However, a good proportion of the small- and medium-size enterprises
(SMEs) surveyed did not appreciate that many ASP vendors have tried to
reduce the danger using what is called firewalls—computers that intercept
incomingtransmissionsandcheckthemfordangerouscontent.Somefearthat
the mere process of downloading information across the Internet may entail
hidden risks (see Figure 3.2). As far as performance goes, some vendors are
consideringarrangementswithnationaltelecommunicationgiantsforbetter
dataaccessfacilitiesoverWAN.Thetrendtowardderegulatingtelecommu-
nicationsmustcontinuegloballyfordataratestobecomeamuchlessimportant
restrictioninthefuture.
Overcoming Obstacles to a Commercial Future
Thepowerfultrendtowardanetworkedsocietyhasmanycomponents,starting
with the fact that use of online networks is exploding. Businesses in the 21st
Figure 3.2. Comparison of forward and reverse proxy cache security
TEAM LinG

Concerns 25
century require tools that take advantage of the millions of people who have
usedcomputernetworksforbusinessandpersonaluses.Thesebusinessesrely
on the fact that e-mails and e-bulletin boards are not only commonplace in
leadingbusinessesbutalsousedforpurposesrangingfromansweringcustomer
service inquiries to exchanging views about personal topics and politics.
Reinforcingthesetrends,ASPvendorsarebuildingthenetworkcapabilities
into their products for intelligent enterprises to see the Web services as an
importantturningpointforcommercialopportunitiesbecauseithasmadethe
Internet so much more accessible and adaptable for nontechnical business
users.
Many obstacles are currently apparent, however, when one looks at the
possibilitythatASPwillbecomeamotivationaltoolforintelligententerprises
inthe21st
centuryandamajordeterminantforthefutureofInternetinfluence
ontheworld’spopulation.
Theareasofconcern,mentionedinTable3.1,relatetoorganization,security,
online performance, freedom and control, competition, and hype versus
OBSTACLES CAUSES SOLUTIONS
Organization Earlier capacity was daunting and
business strategy was unproven
Advent of Web services to
make ASP far easier to
comprehend and adapt
Security Too many reported server break-ins
and other general Internet/intranet
security problems
Industry to emphasize
efforts in protection
machinery and firewall
systems
Performance Telecommunications infrastructure
available in the 1990s globally not
sufficient to support requirements
Use of broadband services
and improvement to
infrastructure globally
Control General negative press about lack of
control on the Internet and risk to
criminal accessing confidential data
Some form of regulation—
of an international
nature—might be needed
Competition Business model does not encourage
differentiation
Cooperation must be based
on trust between vendors
and individual customer
Hype Although ASP model was said to save
costs and is enticing to SMEs, very
little evidence exist
Whether the great potential
of ASP to SMEs will
prevail over the sceptics’
views remains to be seen.
Web services is expected
to provide that killer
means of bridging the gap
Table 3.1. Major obstacles and proposed solutions
TEAM LinG

26 Guah
substance.TheissueoforganizationisbasedonthewayASPhasevolved.The
ASPindustrylacksthetypeofclearorganizationthatwouldmakeiteasytouse
as a reliable and profitable business model. Although ASP vendors’ former
capacitywasdauntingandstrategywasunproven,theadventofWebservices
will make it far easier to comprehend and even adapt.
LookingbackattheInternet’shistory,oneseesmanyincidentsthatraiseissues
about freedom and control. Major Western nations (USA, UK, France, etc.)
have either proposed or passed legislation related to criminal penalties for
transmitting,accessing,orinterceptingdataoftheInternetillegally.Although
theInternethasbeenunregulatedinthepast,seriousconsiderationofASP-like
businessmodelscouldresultinmorelegislation.
ASP as Competitive Investment
Thefundamentaldefinitionofwhatconstitutesamission-criticalapplication
remainsrelativelyunchanged;itisthoseapplicationswhereeventhesmallest
amountofdowntimewillhaveasignificantnegativeimpactonanenterprise’s
operationalefficiencyandbottomline.However,thenatureofwhatintelligent
enterprises now deem to be mission-critical systems has altered with a far
greaterrangeofapplications.
Onewaytointerestamanagerinanewinnovationistoshowthatacompetitor
is planning to adopt this innovation. Intelligent enterprises do respond to
competition to avoid being put at a disadvantage. Banks provide a good
exampleofinvestmentintechnologyforcompetitivereasons.Inanearlystudy
ofATMdeployment,BankerandKauffman(1988)foundthatATMadoption
providedalimitedadvantagetocertainbanks.Thefindingssuggestanearly
advantagefrominstallingATMsandjoiningalargenetwork.Customersclearly
likeATMsandtheinterconnectionstothebankingnetworkitprovides:there
is very little reason for a bank not to join an ATM network. In fact, because
competitors offer ATMs and are in networks, a new bank is almost forced to
investinthistechnology.In2002ATMswerecertainlycompetitivenecessities
forbanking.SomebankswereclosingexpensivebranchesandinstallingATMs
instead.However,sinceallbankscanfollowthisstrategy,itwasunlikelyone
wouldgainasignificantadvantagefromit.
TheairlineindustryoffersanotherexampleofISasacompetitivenecessity.To
start an airline in the 21st
century—especially in the UK and the USA—you
wouldhavetoinvestinsomekindofASPserviceformakingareservation.The
TEAM LinG

Concerns 27
travellingpublichasbecomeaccustomedtobeingabletomakereservations
andobtainticketseasily,eitherpaperorelectronic.
Investmentsforstrategyandtomeetacompetitivechallengemaynotactually
benefittheenterprisemakingthem.Anenterprisemaybeforcedtoadoptnew
technologytostayevenwiththecompetition,asinthetwoexamplesmentioned
earlier. In this case, it is not so much return on investment in ASP, but rather
whatisthecostofnotinvesting?Willanenterpriselosecustomersandmarket
sharebecauseitdoesnothaveaparticulartechnologyinplace? Canyouenter
anewlineofbusinesswithoutinvestinginthetechnologythatcompetitorshave
adopted? What kinds of services do customers expect?
ASP Implementation Strategies
Thestrategyonechoosesforimplementationhasadirectimpactonthelevel
of investment required for an ASP initiative. One strategy is to hire external
expertise,eithertodeveloptheentireapplicationortoworkwiththeinternal
ISstaff.ConsultantshavebeenavailablefordevelopingASPinvestmentssince
the first systems appeared. Consultants will provide advice, and many will
actually undertake the development of the IT application. Carried to an
extreme,theenterprisecanoutsourcethedevelopmentandeventheoperation
of an ASP application. There are a number of network providers who offer
completexSPservices(vertical,horizontal,pureplay,etc.)andanenterprise
mightoutsourceitselectronicdatainterchangeeffortstothem.
Themajoradvantageofusingconsultantsandoutsourcingistheavailabilityof
external expertise. ASP is so complex and difficult to implement that most
intelligententerprisesincludeabudgetforhelpfromaconsultingenterprisethat
hasextensiveexperiencewiththispackage.Whentheenterpriseentersintoa
consultingoroutsourcingagreementforanASPinitiative,itshouldbeaware
oftheneedtomanageitsrelationshipwiththesupplier.Enterprisesthathave
delegatedtheresponsibilityfordevelopinganewASPapplicationtoanoutside
enterprisegenerallyhavebeenunhappywiththeresults.Managersstillhaveto
monitortheagreementandworkwiththesupplier.Thereareexamplesofmany
very elaborate management committees and structures established at enter-
prises such as Microsoft, UNISYS, and IBM to manage outsourced IS.
Evidencewithinthepastthreeyearshaveshownthatsituationscandevelopin
whichlargenumbersofinsurmountableproblemsarisewithissuesthat,inan
TEAM LinG

28 Guah
ASPvendor’sopinion,weregoingtocauselastingimpedimentstotheultimate
systemsimplementation.Amongseveralvendoroptionsweretheseprimary
four:
• ImplementedtheISasbestastheycouldwithintheseconstraints;
• Demonstrated unpalatable objection to the problem owners and set
conditionsforeventualcompletionsofwork;
• Strove to ignore the problems and created the system as if they did not
exist;and
• Completelyrefusedtocontinueworkregardlessofsystemphase.
Whileeachoftheabovecourseshasquiteaseriousimplication,thefirstoption
was most taken.
IntelligententerprisesshoulddeterminetheuptakeofASPbasedontheirlong-
termISplanandonrequestsforinformationsystemsbyvariousstakeholder,
that is, the prospective users, corporate management, internal IS team,
customer,andsupplieraccessibility.ItisnotsufficienttoimplementASPforthe
competitive edge the system may give the enterprise or the high payoff the
system promises. The past phase of ASP has proven that not all systems that
appearpromisingwillproducesufficientbusinessresultstojustifytheiracqui-
sition.However,itisnosurprisethatcertainintelligententerprisesstillfindit
difficulttoevaluatetheworthofprospectivenewtechnology.
BorrowingfromCheckland’sHumanActivitySystem(HAS)concept,anASP
vendor will have problem with certain stakeholders and surrounding issues
(Checkland & Scholes, 1990):
• Client: the systems beneficiary can be difficult to identify due to the
outsourcingnatureofASPbusinessarrangements.
• Owner: the eventual system owner may be anywhere between the
negotiatingpartytoafourthpartysomewhereandinsomecasesnotable
toparticipateintheoriginalnegotiations.
• Actor:theseareoftenindividualsandgroups—ofvarioustypesandwith
variousneeds—whoareusuallyinvolvedinthesystematdifferentstages.
• Objective:whattheprojectisintendedtoachieveishighlydependenton
theprocessanditcanoftenbedifferentforvarioususersandstakeholders.
TEAM LinG

Concerns 29
• Environment:thesituationinwhichthesystemwillbedevelopedand
implementedgrosslyaffectsthefinaloutcomeoftheprocess.
• Expectation: there are often as many assumptions of a project as the
numberoftimesitisdiscussed.Moreimportant,theseassumptionstend
tochangeasonegoesthroughvariousstagesofthesystemdevelopment
andimplementation.
Theissuehereisnotjustoneofinvestment;italsoinvolveslearningandtime.
Thereisalearningcurve,sometimesquitesteep,withnewtechnology.Ifthe
enterprisehasnotdevelopedamoderninfrastructureovertime,itwillhaveto
investmoreforanewASPinitiativebecauseoftheneedtobuildinfrastructure.
It will also have a longer development time as the IS staff learns about this
infrastructureanddevelopsthenewapplicationsthatrequireit.
Problem, Solution, or Opportunity?
OnestimulusforASPsolutionimplementationisitsintentiontotransformthe
enterprise. In this light, the investment in ASP is part of a larger change
programmethatismeanttoenableintelligententerprises’virtualandmultiple-
team structures. The resulting contributions can be described as part of the
outcome of a general change effort. Change is also an opportunity. For most
ofthecompaniesinvolvedinourresearch,managementdecidedonadesired
organization structure and used IT investments to help create it. Managers
planned for change and welcomed it as an opportunity to make the entire
organizationfunctionbetter.Changeisalwaysathreat,asstaffmembersare
forcedtoalterbehaviorthathasprobablybeensuccessfuluntilnow.However,
asshowninsomeoftheexamplesinthisbook,changeisalsoanopportunity
toreshapeintelligententerprisesandmakethemmorecompetitive.
ThepushtowardgreaterconnectivityisamajorfactordrivingASPinvestments
in the 21st
century. The UK’s Department of Trade and Industry (DTI) has
encouraged (some would say mandated) a certain level of electronic data
interchange(EDI)complianceforcompaniesthatwishtodobusinesswithit.
Industryassociationsencouragecompaniestocommunicateelectronically.
Efficientcustomerresponse,EDI,just-in-time,continuousreplenishmentpro-
grams, and the Internet are all examples of the different kinds of electronic
connectivity.
TEAM LinG

30 Guah
For the successful implementation of ASP in the 21st
century, organizations
must maintain a socio-technical perspective, thereby avoiding the purely
technologicalapproachtoachievinghigherproductivity.Indeed,balancingthis
with the consideration of social and human aspects of technology brings the
added value of creating a workplace that will provide job satisfaction. Such
information systems must be designed to fit the needs of its users and the
organization at large and be capable of evolving as these needs invariably
change.Suchethicalconsiderationsofinformationsystemshavemovedintothe
forefrontasinformationsystemshavebecomepervasiveinmodernbusinesses.
Ethics,forthemostpart,involvemakingdecisionsaboutrightandwrongand
notnecessarilyaboutthepossibleandimpossibleandonlyremotelyrelatesto
production increase or decrease. The major ethical issues that have been
noticedtobeaffectingintelligententerprisesinformationsystemsinthe21st
centurycanbesummarizedintoprivacy,accuracy,property,andaccess.
In an effort to modernize, every challenging intelligent enterprise in the 21st
century seems to be jumping on the ASP bandwagon. There comes a point
whenindustryanalystsshouldimplementthecriticalsuccessfactor(CSF).The
CSFmethodology—developedbyJohnRockartoftheMassachusettsInsti-
tuteofTechnology—definedasthosefewcriticalareaswherethingsmustgo
rightforthebusinesstoflourish—derivesorganizationalinformationrequire-
ments from the key info needs of individual executives or managers. CSF
methodologyisorientedtowardsupportinganenterprise’sstrategicdirection.
BycombiningtheCSFsofthesemanagers,onecanobtainfactorscriticaltothe
successoftheentireenterprise.Suchanapproachhasbeenproventobeuseful
in controlling quality of the information system in certain vertical sectors
(Bergeron & Bégin, 1989).
Effects of ASP on IS Departmental Staff
Employee involvement is an employee’s active participation in performing
workandimprovingbusinessprocess(Alter,1996).Theold-fashionedview
ofemployeeinvolvement—employeefollowingtheemployer’sinstructionin
returnforawage—encouragesemployeetobepassive,takelittleinitiative,and
oftenviewthemselvesasadversariesoftheenterpriseanditsmanagement.In
contrast,trulyinvolvedemployeesfeelaresponsibilitytoimprovetheirwork
practiceswiththehelpofmanagersandothersintheenterprise.
TEAM LinG

Concerns 31
ASPcandirectlyaffectemployeeinvolvement.ASPcangenerallybedeployed
inwaysthatincreaseordecreaseemployeeinvolvementintheirwork.AnASP
businessmodelthatprovidesinformationandtoolsforemployeesincreases
involvementbecauseitreinforcestheemployee’sauthorityandresponsibility
forwork.Ontheotherhand,anASPbusinessmodelthatprovidesinformation
tomanagersorqualityinspectorsbutnottheiremployeescanreduceinvolve-
mentbyreinforcingthesuspicionthattheemployeeisnotreallyresponsible.
Thehumanandservicesideoftheinfrastructureinintelligententerprisesoften
gets short shrift in discussions of new systems or system enhancements.
Businessprofessionalsareoftensurprisedattheamountofeffortandexpense
absorbed by the human infrastructure. The tendency toward organizational
decentralizationandoutsourcingofmanysystem-relatedfunctionsmakesit
even more important to include human infrastructure in the analysis of new
systems.
Human Factors in ASP Technologies Development
Therapidrateofdevelopmentofthesetechnologicalmiracles,astheywould
havebeenviewedfromanearlierage,hascreatedamomentumofitsown,and
it is not surprising that concomitant concerns have also developed about the
impactandinfluenceofASPonhumansociety.Theshrinkingoftimeandspace
enabledbyASPhasbenefitsintermsoftaskefficiencyandwidercapabilityfor
communication,butitislessobviousthateaseofmanagementorevenstress
at work are improved at a deeper level (Markus, 1983).
TheabovediscussionshouldnotbetakentoimplythatASPmodelsdetermine
thedirectionofintelligententerprisemanagement.Thedevelopmentandtheuse
ofanASPsolutioniswithinmanagementcontrolandthereisnoinevitablefuture
path. However, it can be argued that the quantity and quality of debate about
the human and societal impact of computers and related technology has not
matchedthatrateofdevelopmentofthetechnologiesthemselves(Walsham,
1993). For example, the debate concerning ASP and its Web services in
intelligententerpriseslargelycentresonquestionsofstrategicimportanceand
valueformoneyratherthandeeperissuesofhumanjobsatisfactionandquality
oflife.
While the mechanistic view of enterprise formed the early foundation of an
intelligententerprisemanagement,theimageofenterprisesasorganismshas
arguablybeenthemostinfluentialmetaphorformanagementpracticeoverthe
TEAM LinG

32 Guah
lastfewdecades.Thecorporealviewseesintelligententerprisesasanalogous
tolivingsystems,existinginawiderenvironmentonwhichtheydependforthe
satisfactionofvariousneeds.Theoriginsofthisapproachcanbetracedback
totheworkofMaslow(1943),whichdemonstratedtheimportanceofsocial
needsandhumanfactorsinworkactivitiesandenterpriseseffectiveness.Itthen
emphasized that management must concern itself with personal growth and
development of its employees rather than confining itself to the lower-level
needsofmoneyandsecurity.
WithrespecttosocialrelationsasconsideredinWebmodels,itisimportantto
notethatparticipantsincludeusers,systemdevelopers,theseniormanagement
of the company, and any other individuals or groups who are affected by the
ASPbusinessmodel.Kling(1987)notesthatcomputingdevelopmentswillbe
attractivetosomeenterpriseparticipantsbecausetheyprovideleveragesuch
as increasing control, speed, and discretion over work, or in increasing their
bargainingcapabilities.Fearoflosingcontrolorbargainingleveragewilllead
some participants to oppose particular computing arrangements, and to
proposealternativesthatbetterservetheirinterests.
It could be said that the above comprises the analysis of what Checkland
(1983)definesastheHAS.HAScanbeseenasaviewonthesocial,cultural,
ethical,andtechnicalsituationoftheorganization.Bothmodelsdealwithone
old problem which continues to trouble information systems today. That is,
thinking about the means by which to deal with the two aspects of any new
system(humanbeingsandtechnology)andhowtheycanbestcommunicate
witheachother.AsitrelatestoASP,theindustrymustbringtogethertheright
mixofsocial(humanresources)andthetechnical(informationtechnologyand
othertechnology)requirements.Hereiswherethekeyhardwareandidentified
humanalternatives,costs,availability,andconstraintsaremarriedtogether.
AsynopsisofanISproblemusuallyappearschaoticandincomprehensible.An
exampleistheNHSISstrategyasofDecember2001(Guah&Currie,2002).
The use of a problem framework will not only show the essence of a view of
the problem context but will also demonstrate that getting the context and
meaningoftheproblemrightismoreimportantthanpresentation.Theprimary
tasksshouldreflectthemostcentralelementsofwhatisoftencalled“problem
setting.”
ASPvendorsshoulddemonstrate,whenreviewingagivensituation,thatany
incoming information system is intended to support, develop, and execute
primarytasksoriginallyperformedbyhumans.Theyshouldbeawareofissues
thataremattersofdisputethatcanhaveadeleteriousaffectuponprimarytasks.
TEAM LinG

Concerns 33
In terms of IS, the issues are often much more important than the tasks.
Consideringitisnotpossibletoresolveallissueswithanygiventechnology,
theyshouldalwaysbeunderstoodandrecognized.Thatisbecauserealityreally
is complex, so the ASP industry should never approach a problem situation
withaconceitedorinflatedviewofitsowncapacity.Notallproblemscanbe
mapped, discussed, and designed away. Often the ASP industry will be
requiredtodevelopaformofamnesiatowardcertainproblemsthatareeither
imponderableortoopoliticalintermsoftheorganizationorbusiness(Guah&
Currie, 2002).
A detailed understanding of the above will help in providing a reasonable
answer to certain essential questions that are necessary for an ASP to
satisfactorilyproduceworkingsolutionsforitscustomers.Afewofthegeneral
questions are: Who is doing what, for whom, and to what end? In what
environmentisthenewsystemtobeimplemented?Towhomisthefinalsystem
goingtobeanswerable?Whatgapswillanyadditiontotheoldsystemfillwithin
thenewsystem?
Socio-Technical Issues
AnintelligententerprisenormallyhasseparateobjectiveswhenlookingatISin
termsofsocialandtechnicalrequirements.Whilethesocialobjectivesreferto
theexpectationsofmajorstakeholders(i.e.,employees),thetechnicalobjec-
tives(Table3.2)refertocapacityoftheorganizationasawholetoreacttokey
issues.
Because the social objectives (Table 3.2) of an ASP solution can broadly be
seen as the expectations of the system in terms of the human beings who are
goingtobeworkingwithit,theywillvaryfromoneproject/contracttoanother.
Astheyareoftenundervalued,managementdoesnottendtofeelthatthesocial
SOCIAL TECHNICAL
Being relatively self-sufficient Informing management
Providing a quick service Improving timeliness
Providing job satisfaction Improving communication
Providing professional satisfaction Increasing information-processing
capacity
Improving division’s professional status Providing a long-term facility
Table 3.2. Socio-technical benefits of ASP
TEAM LinG

Internet strategy the road to web services solutions irm press

Internet strategy the road to web services solutions irm press

Empfohlen

Empfohlen

Weitere ähnliche Inhalte

Andere mochten auch

Andere mochten auch (10)

Ähnlich wie Internet strategy the road to web services solutions irm press

Ähnlich wie Internet strategy the road to web services solutions irm press (20)

Mehr von Cangpt

Mehr von Cangpt (15)

Kürzlich hochgeladen

Kürzlich hochgeladen (20)

Internet strategy the road to web services solutions irm press