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What’s a good idea?

Are real-time business or Web Services good ideas?

Want to make a million bucks? Help your company stay ahead of the competition? All you need is to know is a good idea when you see one. Right. We know there are no simple formulas, no magic methodology that makes it possible to infallibly know a good idea when you see it. Venture capitalists are professionals at evaluating ideas, and as the dot-bomb era showed, they are not infallible.

However, in the world of technology we encounter new ideas so frequently that I suspect many people have developed their own way of judging a new idea. We have heuristics, or rules of thumb, to guide us. I’m assuming these rules are as diverse as we are. Mine are relatively simple, and I’d like to share them with you. They were born over a decade or two of being burned and occasionally delighted by new ideas in technology. I try to keep my approach uncomplicated and oriented toward avoiding The Big Mistake.

A big mistake, such as a belief that online commerce will take over the world (the dot-commers), is usually found in the neighborhood of ideas that are getting a lot of hype. Hype isn’t always wrong, but I think most of us have a sniff test for anything that smells of hyperbole. I tend to boil my approach down to three questions: Who benefits? What scale is this? How will it get done? Rather than explain how each question is handled, let’s look at a couple of examples: real-time business, and Web services–are these good ideas?

Glittering concepts

One of the ideas just beginning to get attention is real-time business. Real-time business means a company can carry out a chain of transactions–from purchasing agent, to supplier, to delivery, to assembly, to distribution, to marketing, to customer, to accounts payable, to financial reporting–almost instantaneously, in real time. As one wag put it, “When a customer orders a leather couch, a cow flinches in Kansas.” The idea of speeding up transaction processing and the information provided by it is not new, of course. It’s one of the seminal motivations for using computers. What might be considered new is the awareness that we now have the capability of actually achieving real-time business. We have the fast computers that almost any company can afford. We have the communications systems. We have the software. And some companies are doing it, or at least coming very close to real-time goals.

At least so goes the argument. First question: Who benefits? Companies that succeed in achieving real-time business practices will benefit, presumably because they will be quicker and more agile in responding to the market and therefore have a competitive advantage. A little less obviously, another big beneficiary is the computer and communication industries that will sell all the gear necessary to achieve real-time business. This is no small measure a self-serving idea. Will the customer or consumer benefit? Possibly, with lower prices and speedier service, but this seems farther down the chain of priorities.

Second question: What scale is this? Massive. Actually, much bigger than massive, since real-time business can theoretically include almost every company everywhere. It’s a global concept. Global concepts are like glittering generalities in rhetoric, which means they sound good but in practice don’t mean much.

That brings us to the third question: How will this idea become real? Since speeding up the business process is assumed to be one of the inherent reasons for using computers, we’re already at work at real-time business and have been for half a century. What’s really new in the concept of real-time business is the makeover of how a company organizes itself, a cultural as well as structural change to accommodate the systems and procedures of doing business lickety-split in real time.

It could happen–but globally, quickly, and inevitably? Real-time business sounds plausible, but it’s much more difficult than the hype would indicate. It won’t happen without a lot of changes, including better technology, and ultimately might prove to be inappropriate for many aspects of business. After all, human behavior–like the business of motivating people to buy something–doesn’t move at the speed of computers. My sniff tests suggest you forget the hype and pay attention when competitive pressures make real-time business processes important.

Too many cooks

Undoubtedly you’ve seen the hype for another big idea, Web services. A Web service, as a concept, unites a gaggle of standards (UDDI, SOAP, WSDL, XML) into a relatively new way to distribute applications and data. It should allow building applications with pieces of programming and data that come from almost anywhere. For example, you might build an international order processing system using one company’s currency converter, another company’s tracking system–and so forth.

So who benefits from Web services? Certainly a lot of frustrated programmers who have been dealing with the problems of sharing data and programs between businesses for decades. When it works, a Web service may be the answer to a variety of business-to-business (B2B) projects. The software industry embraces the idea of Web services because it opens new revenue streams (such as permanent rental of software). This is another idea with a big self-serving component. Consumers were originally included in those who would benefit, but that talk has all but disappeared.

The scale of Web services could be big. Software companies like Microsoft have bet heavily on it, and the hype suggests that Web services might become the foundation for most of the software of the future. Of course, the foundation isn’t the whole story of a house, nor are Web services the whole story of software; so maybe the scale isn’t really that big. Not everybody is convinced that distributed applications will be the dominant form of software in the future. This may be like wondering whether online commerce will be the dominant form of retail.

So how will Web services be implemented? It’s one of those ideas that got momentum from major software companies (Microsoft, IBM, Sun, Oracle, etc.), who like the concept, the potential revenue stream, and the idea that selling the sophisticated tools needed to build Web services. However, outside of trivial projects, building and integrating Web services remains technically complex. The Web is a tangled environment of hardware and software that must be made to work together if Web services are to succeed. The key is usually industry standards. Unfortunately, competitive wrangling over standards among the same major players–and especially the fighting over “loose ends” that were not covered by the original standards such as security and transaction integrity–is making the technical difficulty worse.

So after applying my three questions, I rub the old crystal ball (my bald head) and think:

The idea of Web services is credible and more focused than real-time business. Its beneficiaries are also focused (limited), and therefore more plausible. The scope is ambitious; a sniff test says claims for Web services are probably overblown. It’s the implementation question that causes me the most concern. For something that’s supposed to be so important, Web services are in grave danger of become the next competitive football. This means competing standards, fragmented technical approaches, and probably slower implementation. No wonder we’re seeing more reports about potential developers and consumers of Web services becoming wary. Web services are a good ideaÑone that companies can’t afford to dismiss. But they’d better check it out from a lot of different angles before taking the plunge.

That golden insight

Of course there’s more to the analysis of new ideas than three simple questions, but they do provide a convenient framework. When I think about “Who benefits?” (Who makes the money?) “What’s the scale?” (How big is this idea, really?), and “How can it be done?” (Can it be done?), it’s a form of reality check that forces me to consider a lot of different factors.

Almost by definition, a new idea is untested, so evaluation involves opinion and guesswork. My interpretation of real-time business and Web services is not based on complete knowledge or considerable experience. Under these circumstances, judging whether an idea is good or not has a lot of subjectivity. Given these same questions, your interpretation would probably be different. However, being somewhat systematic–especially for important (and risky) new ideas–is the point. It sure helps if you have to defend your opinion. Gut feel plays a part, but as another wag said: “My gut gets it right only after a full meal.”

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