Web services can dramatically reduce the cost associated with these items because of the flexibility implied in the architecture. Since business rules can be more easily changed after deployment, fewer demands are placed on the up-front design phase and less "user-acceptance" risk exists.

The second approach is the data integration approach. By creating a common database, users and applications can share information and coordinate activity. This, too, is very expensive. It requires complex requirement and architecture efforts, as well as ongoing maintenance that involves refreshing data. Data integration is expensive for several reasons:

A Web services architecture facilitates the creation of a layer of abstraction, enabling reusable components to be created that hide the complexity of the data from the user and allowing easier modification and enhancement over time.

It is not surprising, then, that when faced with requirements to be more agile (i.e., view change as necessary and good instead of costly and undesirable), the impracticality of these approaches becomes painfully apparent.

Many end users, analysts, and vendors have reached the same conclusion: a new approach is necessary for the types of requirements emerging today in support of business imperatives. Web services that enable siloed IT systems to freely communicate with one another are the foundation of that approach.

A New Approach Takes Shape
For a company to revise its business processes, it must first take stock of its existing systems and methodologies before determining how to use them to achieve certain objectives. A premier financial services company successfully planned how to fine-tune its business processes in the following manner.

First, it identified strategic business objectives such as increased per-customer revenue and increased competitive differentiation. Then it determined the key business drivers of these objectives, such as meeting increasingly high service expectations, unifying the online and offline channels, and coordinating contact management. Finally, it parsed out the key business processes behind the business drivers, such as making a product offer and responding to a query for product information. Having defined its objectives and the means to achieve them, the firm was set to tackle the technical challenge of how to make it happen.

This process-centric approach to fine-tuning business processes has several benefits. It allows companies to:

Tactically, improving the efficiency of business processes involves three areas of focus:

Addressing these three tactical areas almost always means tighter systems integration, either from system-to-system or system-to-database. It also means connecting "silos" of business logic that operate independently of each other and of any "customer context," or knowledge about the customer that will improve interaction. Until recently, it took custom coding to connect the silos. Custom-coded solutions are expensive, brittle, and often impractical when management demands that the company respond quickly to business drivers. As a result, these types of integrations often fail, or companies don't even attempt them.

Bridging the Gap with BPM
Enter BPM, which industry analysts believe will jump from $570 million in 2002 to more than $1.5 billion in 2005.

BPM coordinates the actions of isolated IT systems - like CRM, SFA, and ERP. Using the built-in intelligence of existing applications and systems, BPM can help companies nimbly react to key business events and capture millions of dollars in potentially missed revenue opportunities while improving customer service. Using a Web services architecture founded on XML, SOAP, J2EE, and similar technologies, BPM can synchronize signals from existing applications, enabling them to work together without changing how they operate individually.

BPM technology overcomes the weaknesses of the current generation of systems integration approaches. It provides a variable cost model that allows for a small initial implementation footprint tied to a three-to- six-month payback period, tightly coupling investment and return. Today, technology must prove utility before vendors can demand license and support fees. Instead of the typical 12+-month implementation and two-year payback model, Web services- based BPM technology scales deployment effort to the initial requirements. As a company extends its BPM implementation over time, it builds upon the work already performed.

BPM allows for rapid modification so end users can engage in "test-and-learn" process development and management. Most of the processes that support key business drivers are complex and must continuously evolve in response to internal and external changes. BPM technology that utilizes a Web services architecture enables users to implement, test, modify, and re-implement processes in rapid sequence based on what they've learned.

BPM gives end users more involvement so they can change processes on the fly and improve agility and productivity without having to call IT. The current generation of technologies is brittle largely because IT shoulders the bulk of maintenance costs and responsibilities. BPM technology balances the workload between the end user and IT in such a way that users can maintain processes without resorting to IT support.

Companies benefit from BPM's ability to reuse common data objects such as "Customer" and "Trade" and use open standards to make them available to any application. The complex infrastructure many organizations operate has evolved from the many proprietary database structures and application logic syntaxes from years of systems development. Most valuable components of business processes, including data definitions, business rules, and transformation logic, are replicated in a variety of formats across the enterprise. BPM technology relies on an object model that exposes and abstracts these elements so they may be reused across different systems via components of the Web services architecture, such as emerging XML standards.

BPM provides a context for the business process to allow users to access information at the application level, before it has been saved to a database, dramatically reducing data integration. Most traditional application integration is based upon the movement of "state data," that is, data that has been saved about a particular event. State data is stored in databases, and then "synchronized" with other databases linked to other applications. But companies don't save much information needed to support business rules because it is too expensive or too complex.

Companies can use BPM to cultivate existing business logic and integration capabilities to connect existing applications and databases without modifying them. This lightweight connection is the hallmark of Web services. Most of these systems already have connections built into them, either with middleware or published application programming interfaces (APIs). BPM technology uses these connections to link databases and applications while providing a layer of abstraction that hides the variability that exists between systems.

Integration technology has been around for nearly 10 years. However, while it has addressed some specific needs, it still isn't practical for most companies because of the cost and performance issues. Consider that most integration projects still involve custom code, according to Forrester Research. Businesses that want to streamline how they respond to key events, build revenue, and strengthen customer relationships should instead take a fresh look at integration from the process perspective. What processes do they need to implement to achieve their business goals, and what technology will help them do that affordably? With its roots in Web services that make disparate IT systems communicate, BPM technology can provide the framework CIOs need to capitalize on missed revenue opportunities while still keeping costs under control.