Hi Naveen,
A web service needs an end-point where data requested/received would be processed before sending/updating. A function module is used as an end point for the same.You can create a web service from a FM by following the path Utilities->More utilities->Create web service
Just creating a web service will not be enough but it should be published. Basis folks can help you in this regard.
Hope this helps,
~Athreya