Achieving.the.Necessary.Coordination.in.Web.Services..Development:

The question concerning distributed vs. decentralized computing directly shows in a discussion
on standards. After all, standards play a big role in integrating systems; they resolve the need
for coordination (at the level at which the standard works). The concept of Web services is
currently receiving very much attention as a paradigm that allows B2Bi. The biggest strength
of this concept is just that it includes a set of ICT standards. Simple object access protocol
(SOAP), for example, is a standard way to communicate with Web services.
In building a business-to-business process, companies need to agree on a number of issues.
Agreement is not only needed at ICT level but also at business level. Above that, it is important
to know how to translate the business agreement into an ICT agreement, and�the
other way around�how to use ICT agreements to enable the business.
It is important to recognize the role of standards, their powers, and their threats. It can be
very useful to standardize issues�be it business issues or ICT issues�on which it does not
make any sense to compete. But of course, by standardizing some issues, competition shifts
to other issues. Companies want to make a difference somewhere. Standards such as SOAP
are very useful and lift the competition to the level of using the standard creatively.

There are different levels of compromise possible among parties (Besen & Farrell, 1994).
The levels of agreement on ICT issues are shown in Figure 5. Parties need at least bilateral
agreements. An active coordination among the parties is, however, not always necessary.
Some issues have already been standardized sufficiently at a higher level (for example at
the level of the software vendor). Clearly, companies do not have to discuss on the contents
covered by a standard anymore if they both agree to use the same existing standard.
Of course, not everything is being standardized. When it comes to technology, it is only where
interoperability is important that standards become required. Features that cause customer
dissatisfaction or hinder industry growth4 evolve into standards, while �customer-useful
differentiating features� do not tend to evolve into standards. Furthermore, the demand for
standards usually comes from the users and customers of the technology who experience
the confusion caused by the lack of standards (Cook, 1996). Employees (be it business or
ICT employees) may for example notice that there is no standard terminology for important
concepts in their company and that this creates communication problems. Companies then
consider creating a �data dictionary� with a standardized vocabulary. At the level of business-
to-business relations, companies may suffer from a non-standardized vocabulary too.
If one company uses the field �customerno� in its database, and another company uses the
field �customernumber,� both companies know the same concept but have a different name
assigned to the concept. In order to have IT systems of such companies talking to each other,
a translation will be necessary (from the standardized vocabulary of one company to the
standardized vocabulary of another company).
In choosing which level of agreement (and which standard) to use, it is important to evaluate
the opportunities that are being offered by the different levels (and standards at those levels).
As such, the presence/absence of network effects should be taken into account when deciding
when to use standards. Network effects are based on the concept of positive feedback,
that is, the situation in which success generates more success. The value of connecting to
a network depends on the number of other people already connected to it (i.e., you can
connect to). Network effects do not play in the extended
enterprise (�change partners� is a contradiction in terms), but they do play in market B2Bi