InformationWeek

ven in E-commerce, form follows function. That's why the most-effective type of E-business architecture is built on a careful analysis of the way a company does business. Along the way, many companies also find that implementing the architecture gives them an opportunity to make their businesses more efficient overall. Once a company has identified the most-essential functions of its business, it's time to decide which of them can be converted into Web applications, from practical and cost/benefit standpoints. That's when many companies use the process of implementing an E-commerce architecture to begin revamping the underlying business processes.

Ideally, a company sets about creating an E-business architecture by looking at its business practices. Only after deciding which processes would translate into successful E-commerce applications should it begin selecting the technology components. Then, implementation becomes a process of making information from essential back-end business processes available to customers, suppliers, and partners to create more-direct business relationships with them.

An E-business architecture is, by definition, any portion of a company's business in which the network is used to complete some portion of a transaction, says John Crossley, product manager of secure connectivity services at Schlumberger Network Solutions, the unit of energy-services firm Schlumberger Ltd. responsible for implementing its E-business infrastructure. The architecture comprises ordering, billing, and delivery and fulfillment systems, as well as the network that connects everything and the systems that provide security, Crossley says.

A company's approach to creating an E-business system will depend on the business it's in and how much of its business it intends to put on the Web, he says. A good place to begin is in an area that can be readily transformed into a networked application. That way, the company can easily gain experience with E-business, and perhaps realize a quick return on its investment. Another good starting point is one where E-business can cut costs through automation, Crossley says.

"Business-to-business is usually the sphere where it's easier to show a return on investment," and starting with B-to-B usually minimizes disruption because it affects only suppliers and partners, not customers, he says.

The next tasks are to evaluate what systems will be needed, determine who the main vendors of those systems will be, and select vendors. Five major hardware and software categories make up an E-business architecture, says Tim Howe, chief technology officer at Loudcloud Inc., which offers end-to-end managed E-commerce products and services. Those areas are the networking infrastructure and Web servers, the applications themselves and the application servers, data storage and transactional servers, legacy integration, and the underlying operational environment, Howe says.

In most cases, users will base their choice of vendors on a variety of factors. A company may stick with a vendor if it's merely porting an existing application to the Web, or it may select a best-of-breed vendor for an application that's new to the company.

At TheSupply Inc., a procurement company for the semiconductor industry in San Jose, Calif., the main considerations were the vendors' flexibility and responsiveness, as well as their products' capabilities and strengths, says Kirk Fjeldheim, chief technology officer at TheSupply.

Because E-business makes essential company resources available to a wider audience, security decisions also are key. A company must augment security measures if they're inadequate for E-business--as is usually the case.

The company also needs to integrate the E-business system it's building with any business-automation tools it already has, such as enterprise resource planning or billing and invoicing systems. Often, third-party companies are available to do the integration, and the ERP vendor may itself offer such integration services, Crossley says.

Another major issue is whether to outsource any part of the implementation task. The choices range from doing it all in-house, outsourcing some parts of the task, or outsourcing it entirely, including ongoing maintenance and management, Crossley says.

"A lot of companies are not going to have the IT expertise to handle the breadth of things that are going to be required," he says. Another argument in favor of outsourcing is that third parties can provide some protection against losing control of project costs. With outsourcing, it's easier to insist that the system be delivered within budget.

A large-scale E-business system can be fairly straightforward, consisting of three essential elements tied together by networking hardware: a browser-based user interface on the front end, using either the Internet or a private network; a business-objects layer in the middle; and a back-end database infrastructure.

That's the case for TheSupply, which has built an online marketplace for the semiconductor industry. TheSupply's E-business architecture includes a browser-based user interface, which is a Java application built on top of an off-the-shelf application from Tradex (later acquired by Ariba Inc.); a middle tier running WebLogic from BEA Systems Inc. on clustered Sun Microsystems servers; and a back-end clustered database environment running Oracle8i, also on Sun servers.

All the equipment needed for TheSupply's site is co-located at a Santa Clara, Calif., Web-hosting facility run by Exodus Communications Inc. The physical network elements include Cisco PIX Firewalls, Catalyst 5000 switches, and Cisco 7800-series routers. At the Exodus facility, traffic enters from the Internet, passing first through the PIX Firewalls, then through the 7800 routers, and from there to the Catalyst 5000 switches, which act as hubs that distribute traffic to TheSupply's servers, also co-located at the Exodus facility.

The facility is connected to the Internet via a 100-Gbps data link, and TheSupply connects to the Exodus facility via a 45-Mbps private-network link. TheSupply's customers connect over the Internet to the facility via either 1.5-Mbps or 45-Mbps private links, which they set up, pay for, and maintain. For protection against service disruptions, TheSupply also has standby servers at the ready and backups of its data, Fjeldheim says.

The total cost of hardware and software for TheSupply's architecture was about $2 million, Fjeldheim says. The company leases some of its hardware, which keeps the cost lower than if it had purchased everything.

Any company embarking on an E-business implementation needs to know what its target market is, what budget constraints will be put on the system, whether it will be entirely Web-based, the size and number of transactions it will need to support, how outside parties will connect to the system, and what level of security is appropriate, Fjeldheim says.

After that, the company can begin assembling a structure that will suit its needs, including specific components: the front-end user interface, the applications in the middle, and, finally, the underlying infrastructure. "The last thing you deal with is the hardware, because hardware is the easiest part," he advises.

For many companies, the process of Webifying current business functions is part of reengineering those functions to improve their efficiency, customer responsiveness, and cost structures. That's what happened at ON Semiconductor Corp., which broke its business down into five essential functions. "The major piece of work had to be done within our own four walls, so to speak," says Colum O'Neill, director of E-business.

The five processes the Phoenix company identified as essential to make available via an E-business infrastructure were product design and support, price quoting and negotiation, order entry and management, order fulfillment, and field support, O'Neill says. ON Semiconductor broke each process down into specific functions to be put on the Web. At the same time, the company set specific goals for improving each one.

For its order-fulfillment system, the company set the goal of always delivering product on time. To achieve that, it reengineered its entire supply-chain system by deploying i2 Technologies Inc.'s master-planning-environment software, which consolidates orders, forecasts demand for products, and creates manufacturing plans. The master-planning environment is then tied to the company's online product-ordering and order-fulfillment systems.

ON Semiconductor applied that type of thinking to all five key processes, making each more efficient, O'Neill says. The result was a single Web portal using Vignette Corp. for Web presentation and session management; several Java applications that tied data from the Web application to defined business processes; the eGate Integrator from SeeBeyond Technology Corp.; an E-business customer-relationship management system from Siebel Systems Inc.; a back-end database from Oracle; the Matrix 1 product-development application; and i2's master-planning environment.

Customers can use the Web site to get product information, order samples and literature, get customized pricing and availability dates, check order status, and compare ON Semiconductor's products with competitors' wares.

At General Motors Corp., improvements to fundamental business functions are also part of moving those processes to the Web, CTO Tony Scott says. GM is in the second stage of putting its business on the Web.

The first phase involved putting a few simple aspects of the business online. In phase two, GM is "figuring out how to be a more-efficient business in all aspects," Scott says. That's because once GM had the basic IT and networking systems in place for E-business, it became clear how the automaker could use those systems to drive efficiencies in more areas, he says.

"Once the basic infrastructure is in place, people find creative ways to use it, with strong business benefits," he says. "The second step is realizing that some of the processes can be externalized and done in cooperation with other businesses, and then the benefits are really profound." Covisint LLC, the auto industry's procurement portal, is an example of that type of cooperative effort, Scott says.

GM hasn't rushed into any area of E-business without first carefully considering how it will help the overall business, Scott says. "Everything we do, we do with an eye to having some bottom-line benefit," he says. For each of its main areas of business, GM has a specific idea of what capabilities it wants to enable on its public Internet sites over time, Scott says. For instance, GM first offered product descriptions and specifications on the site, then the ability to compare various automobiles, then virtual "tours" of GM's vehicles.

Although its E-business goals evolve, "we've always had a design in mind and certain functionality targets," which usually become more sophisticated as the company goes along, Scott says.

That's because GM is well aware that a sound, adaptable E-commerce architecture serves the core requirements of the business itself and evolves as those needs change.