Phase 1: Integration The  first  phase  of  Web  services  adoption  will  begin  with  internal  system integration projects. The need for internal integration derives from the myr- iad of information silos created by proprietary enterprise applications imple- mented  to  support  activities  such  as  financial  management  (general  ledger, accounts payable, accounts receivable), costing systems, order management, procurement,  and  production  scheduling.  These  enterprise  applications are  typically  large,  client-server  implementations  built  with  an  internal, organization-facing  view  of  the  world,  and  oriented  toward  internal  effi- ciency and controls. In  their  initial  deployments  of  Web  services,  organizations  will  write services that expose the functionality locked within enterprise applications and  legacy  systems,  enabling  that  functionality  to  be  leveraged  by  other applications or business processes. The integration phase of Web services adoption will prepare organizations for the next phase, collaboration. The lessons learned from applying Web services internally to systems integra- tion and enterprise application integration problems will be leveraged for the benefit of external trading partners in the collaboration phase of Web services adoption. A Day in the Life of a CIO 19 Integration Collaboration Innovation Domination •Experimentation with Web services with small, internal integration projects •SOAP-enablement of  legacy applications and ERP, CRM systems •Fast cycles of learning reach the limits of early Web Services, immature standards, and unprepared IT architectures •Increase in shared information across the business •Experimentation with WS outside firewalls •Increasing interaction with trading partners & customers •Close trading partners implement Web services to drive shared value •“External” trading partners begin sharing information to drive industry value chain benefits •Lessons from integration and collaboration applied to new processes and business models •New distributed WS processes and applications drive business change •Dramatic business results are achieved as WS are applied in new ways, driving new value propositions •First movers begin to assert their dominance over respective markets and industries •Industry dominance achieved by innovating new business models as well as out-executing competitors •Web services leaders win through rapid innovation and cycles of learning •Web services mastery creates new company and industry structures as boundaries are redefined FIGURE 1.1 Phases of Web services adoption. 74188_WY_Marks_01  2/5/2003  4:08 PM  Page 19