In 2001 Olex, one of Australia's largest cable makers, took the bold step of implementing a Web services infrastructure - three years later the company is still waiting for its customers and partners to follow suit.
Despite being an early adopter, Dominic Serong, the company's customer e-business solutions manager, said Web services may be here, but its use is still years away.
Olex is still awaiting market maturity although vendors have been spruiking the wonders of Web services for the past 18 months.
Serong said the company made the decision to build a services architecture because it increasingly shared information with customers over the Web.
"We're capable of using Web services but we need our customers to agree," Serong said. "There is a couple of years' worth of customer upgrading before many will take a look at Web services even that is still two to three years away. There is also a case of upgrading systems to support Web services."
Serong said the competitive advantage of Web services lies with its ability to reduce customer enquiry loads, such as stock queries.
Steve Patrick, Olex's IT manager, said most businesses are not yet at a point where Web services systems are ready to just turn on.
"It's not a technical issue; changes to business processes are required," Patrick said. "The cost savings with Web services aren't as much a consideration as the reduction in customer service. The place where I see it delivers value is with better inventory management; working with thinner amounts of stock reduces capital costs."
Olex is an iSeries site running the Bpix ERP application and uses IBM's WebSphere as its Web application server.
The industry sector may also be a contributing factor for the rate of uptake of an emerging technology like Web service, as Patrick believes a lot of companies in the electrical industry struggle with EDI, let alone Web services.
Also, according to Serong, the electrical industry hasn't operated in real time and orders typically went that day or the day after - "it's not like the food industry - with perishables".
Patrick said Olex had no previous experience with Web applications and although it has begun to realize the benefits, it is still a long way from having Web services-enabled customers.
"Web services will enable us to communicate with customers as the groundwork is done," Patrick said. "We also plan to write more internal business applications in Java, as requests from the business come which will put more workloads onto WebSphere. For example, our Access-based cable management system was Web-enabled and is easier to maintain."
Olex will now consider employing Web services to look at stock through ERP as it finds ways to apply Web services to things other than just ordering, Serong said.
Patrick said when Web services takes off there will be a demand for skills as there are not enough available now.
"We used a mixture of in-house and external skills but when we start a significant Web services project we will use external skills and learn from there," he said.
Web services now in full swing: Gartner
While acknowledging that some industries are further down the road than others when it comes to Web services, Gartner Asia Pacific research director Dion Wiggins said the technology is now being used extensively to streamline and grow businesses.
"The early adopters were the process-intensive industries like banking and finance," Wiggins said.
"Until this year most Web services projects were used internally for integration. The global 2000 are beginning to pick it up quite strongly now."
Wiggins said the benefits of Web services is that it can be deployed to any end application, which may be a purchase and ordering system, but the big challenge is for businesses to think beyond their legacy processes.
To explain how efficient a Web services framework can be Wiggins cited the example of printing a document from a hotel room to a Kinko's printing centre in the US. The document is printed from the online PC, properties like binding and double-sided pages are chosen, the nearest Kinko's location will be determined by Microsoft's MapPoint, the cost of the job will be calculated, and if you would like it delivered to your hotel it can even be added to your room's account - all automatically via Web services.
Gartner research indicates that Web services is still evolving in Australia with almost half the organizations currently implementing it, or plan to do so over the next 18 months.
More than two-thirds of the organizations using Web services already provide Web services that can be accessed by external parties and another one-fifth plan to do so by the end of 2005, according to Gartner.