Welcome to the e-Service Revolution

If industry giants like Hewlett-Packard, Intel , Microsoft and Sun Microsystems are right, the Internet is about to undergo the biggest transformation in its brief history. Welcome to the
brave new world of e-services. It is not about selling books or airline tickets, nor discounts through a business-to-business (B2B) exchange. It's a whole new marketplace for a commodity that your organization already owns--knowledge.

An e-service is any kind of business service that customers can access using a standard Web browser. The value of this Web-based model lies in providing your business with a direct pipeline to potential customers. E-services constitute a new revenue stream, but they use existing assets. In addition, e-services will be able to interact and collaborate with each other seamlessly over the Internet.

Once all the pieces are in place, perhaps a year from now, e-services will be able to discover, barter and transact with each other to perform tasks. To track and maintain inventory, for example:

• An inventory management service might compare data collected from bar-code scanners to the records in its database. That tells it what the company has in stock.

• Then, to determine whether to add or unload inventory, another service uses data mining techniques to compare the supply against potential demand based on market conditions, trend forecasts and other factors.

• To get more inventory, the data mining service contacts a purchasing service, bids on supplies over the Internet and awards the contract to the supplier that can meet requirements--based on business rules embedded in the service--for price, timeliness and quality. This information could come from yet another service that rates suppliers on these attributes.

• Next the bid is sent to a service that handles logistics and ships the goods.

• As the new inventory makes its way to the purchaser, the inventory management service updates the company's accounting service.

• Another service, run by the supplier, provides information about which goods are in demand and which aren't to a sales forecasting service, also run by the supplier.

Despite being sold by different vendors, each of these services will be able to connect seamlessly to the others as long as they are built using eXtensible Markup Language (XML) in accordance with mutually agreed-upon standard protocols. It will all happen without human intervention.

Such services already exist on the Internet in nascent form. With its package tracker, FedEx of Memphis, Tenn., took a tool built for internal use and made it available to any customer with a Web browser. For FedEx, this tool made customers happier, reduced call center expenses and extended its corporate brand into cyberspace.

To benefit from this new marketplace, vendors of e-services will have to stop thinking in terms of individual Web sites and start planning to embed their company's services in their customers' business processes. Instead of driving those customers toward a destination, they'll have to ensure that their services find those customers no matter where they are. For forward-thinking enterprise customers, e-services will reduce the complexity of their information systems, lower infrastructure costs and enable them to realize the goal of delivering knowledge to customers when they need it most.

In this brave new world, the winners will be companies that take an entrepreneurial approach to their assets, which include everything from their core business offerings to business rules, best practices and customer data. The trick will be to determine where those assets lie, which can be captured and reused and which of them have value.

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