The established global business environment is under intense pressure from Asian countries such as Korea, China and India. This forces businesses to concentrate on their core competencies and adopt leaner management structures. The coordination of activities both within companies and with suppliers and customers has become a crucial competitive advantage. At the same time the Internet has transformed the way in which businesses run. As the Internet becomes a cheap and effective communication channel, businesses are quick to adopt the Web for integrating their systems together and linking them with their suppliers and customers. Current enterprise computing using J2EE has yielded systems where the coupling between various components in a system is too tight to be effective for ubiquitous B2B and B2C e-business over the Internet. This approach requires too much agreement and shared context between business systems from different organizations. There is a need to move away from tightly coupled monolithic systems and towards systems of loosely coupled, dynamically bound components. The emerging technology, Web Services provides the tools to accomplish this integration but this approach presents many new challenges and problems that must be overcome. In this paper, we will discuss the current approaches in enterprise application integration and the limitations. And there is a need for services oriented applications i.e. web services. Finally the challenges in implementing web services are outlined.