Evolution of Process Portals to Multi-Channel Architectures ‑ A Service-Oriented Approach at ETA SA

19th Bled eConference eValues Bled, Slovenia, June 5 - 7, 2006 Evolution of Process Portals to Multi-Channel Architectures – A Service-Oriented Approach at ETA SA Jan W. Schemm, Christine Legner University of St. Gallen, Institute of Information Management Switzerland {Firstname.Lastname}@unisg.ch Rudolf Zurmühlen ETA SA Manufacture Horlogère Suisse Switzerland Rudolf.Zurmuehlen@eta.ch Abstract This paper illustrates a typical pathway towards increasing electronic interaction with external business partners. Based on the case study of ETA SA, a Swiss manufacturer of watch movements and components, it explores current issues in portal-based B2B integration. In order to allow for tighter process integration with distinct customers, ETA conceives a multi-channel architecture which provides electronic services to customers using either direct or portal-based electronic channels. Since a multi- channel approach typically is associated with major integration challenges, the paper outlines and discusses the vision of service-oriented architecture for interorganizational integration. 1 Introduction Progress in information technology (IT), and more specifically the emergence of the Internet, is considered a major accelerator in realizing closer forms of collaboration between business partners. On the customer side, the electronic channel has proved valuable in offering supplementary self-services to the customer which are information-based and need not be co-located with the product (Piccoli et al. 2004, Day and Hubbard 2003). In fact, many companies report closer customer relationships and improved operational efficiencies in their customer-facing or downstream processes (Chen and Chen 2004). From a technical view, portal-based solutions represent the dominant electronic collaboration platform as they impose the lowest integration requirements. However, in the medium and long term, companies will prefer closer integration with their business partners by directly connecting information systems across company borders. This paper discusses the evolution of interorganizational systems as well as issues which may result from portal-based integration in B2B relationships. It uses a qualitative case study research design as described by (Yin 2002). Based on the case study of ETA SA, it explores different stages of electronic interaction with customers and outlines the need for offering electronic services using both, direct and portal-based electronic channels. Since complexity arises with the additional channel, we sketch a service-oriented multi-channel approach as target architecture for interorganizational integration. This paper is structured as follows: Section 2 provides a systematic over- view on different types of electronic interaction and outlines typical issues in implementing higher levels of process integration with external partners. Section 3 introduces the case of ETA SA, a Swiss manufacturer of watch movements and components: The firm is successfully using a customer process portal for interacting with its customer base, but is confronted with some class of customers demanding higher levels of process integration. In order to offer electronic services via different channels and to satisfy the requirements of each class of business partner, ETA conceives a multi- channel architecture, which is presented in Section 4. Section 5 derives key finding regarding interorganizational integration and outlines topics for future research. 2 State of the Art in Interorganizational Integration 2.1 Evolution of Interorganizational Integration Starting in the 1970s, the evolution of information systems for inter- organizational process integration is characterized by the convergence of three parallel technological evolution pathways: Interorganizational Systems (IOS) denote information systems that transcend organizational boundaries (Johnston and Vitale 1988, Hong 2002). Dating back in the early 70s, EDI-systems were introduced to enable structured data exchange. They were supplemented by ordering systems with higher-order data inte- gration, shared databases and functionality. Compared to EDI- systems, ordering systems focused on the efficient support for collaborative processes rather than accelerated communication. Electronic marketplaces finally were established in order to provide multilateral (n:m) integration (Bakos 1991, Kaplan and Sawhney 2000, Mahadevan 2003). As figures on electronic business-to- business transactions underline, IOS have only been successful in certain industries and usually involve a limited number of (large- volume) transaction partners. 2 Communi- Electr. Internet-based Emergence Institutionalization Integration, Web cation trans- of the Internet of the Internet Portals Services channel actions Evolution pathways n:m Electronic marketplaces ‚Classic IOS‘ IOS- 1:n Ordering Systems based n:1 1:1 Electronic Data Interchange ERP- Functional Internal ERP ERP II Service-oriented based IT-Support Integration Architectures Time 1970 1980 1990 1995 1997 2000 2005 Figure 1: Convergence of interorganizational information systems (adapted from Alt 2004) Parallel to the emergence of IOS, ERP-systems introduced internal information integration into the company by providing cross- functional data integration and process support (Davenport 1998). The reach of ERP-systems gradually expanded to support collaboration with external partners (Davenport and Brooks 2004): ERP II (Weston 2003) or Business Networking Systems (BNS) (Alt and Fleisch 2000) provide functionality for both, CRM (customer relationship management) and SCM (supply chain management). The commercial diffusion of the Internet and especially the World Wide Web laid the foundation for the third major evolution path towards interorganizational integration. Following a phase of rapid growth of enterprise web sites since 1994/1995, companies gradually integrated Internet technologies with their existing information systems e.g. by deploying XML-based data exchange or connecting their ERP-systems directly to t Internet front end. The latter was supported by portal solutions which integrate content and functionality from heterogeneous data sources (Dias 2001). The phases illustrated in Figure 1 neither dictate a strict development path every company has to pass through, nor a predefined sequence (Venkatraman 1994). Nonetheless, the illustration helps in explaining the convergence towards a technological platform for interorganizational inte- gration, reproducing the development of integrated ERP-systems in an interorganizational environment. Web services which allow for application- to-application integration across heterogeneous platforms using open internet standards, and service-oriented architectures are expected to stimulate this development (Hagel and Brown 2001, Daniel and White 2005). 2.2 Interaction Types and Corresponding Levels of Agreement Interorganizational information systems can be classified according to their interaction type (cf. McAfee 2005a, Fleisch 2001, Reimers 2001). Human- 3 human-interaction describes traditional forms of interaction between humans which may be supported by electronic means, e.g. groupware or e-mail (cf. Figure 2). In the case of human-machine-interaction, external users are getting direct access to internal data and applications. This is typically realized by internet front ends or portals which bundle data and applications on the basis of users and roles. Machine-machine-interaction finally describes the direct communication between two information systems without human intervention.