Integration technology can play a major role in a business, without requiring management or technologists to jump through hoops. Think “out of the box” and you will recognize opportunities to deliver high value business results using integration methods, new technology, and IT assets that you already have in house.
The main reason that more companies don’t recognize and exploit broader opportunities to integrate their businesses is that integration is generally viewed as an adjunct to or a requirement of something else. Often it is saddled onto application development projects or, at best, may be seen as a way to achieve rapid compliance with a specific targeted regulation or customer mandate.
But, in fact, business integration delivers value in its own right, and can be used to deliver results in many areas – much faster than traditional IT methods.
This article discusses key drivers that motivate business integration investments. It will also define business integration and its characteristics.
Let’s start with a high-level view of the business drivers that dictate the business integration investments in most companies. Particularly in small and medium size companies, the business integration agenda is driven usually from the outside. There are
- regulatory requirements for reporting and compliance of various sorts;
- mandates and requests from important customers that are tied to revenue;
- supply chain integration issues that we need to deal with, of course, with suppliers and service providers;
- pressures from competitors that we might need to respond to as well, for example, enhancing VMI capabilities or other customer-facing services; and, finally,
- company strategy, which is both an internal and external driver.
The problem that many companies face here is that, as company resources are allocated to address the first two or three requirements, what suffers is the internal business requirements. And, traditionally, business integration for most companies is implemented in a compartmentalized fashion. Most companies tackle integration bottom-up, usually as parts of larger IT projects. And usually when integration occurs as a result of a customer or regulatory mandate, the focus is on completing the project on time, not on achieving high value business results.
Once the project is finished, thoughts of revisiting ways to add value go by the wayside due, again, to scarce resources and other pressing priorities. So when the next business integration demand surfaces, and creates a requirement for another project, the cycle repeats.
Historically, companies have reacted by acquiring and deploying specific point solutions to address the requirements of that particular business integration demand, and then reallocating resources to the next emergency.
There are three problems with this scenario. First, we get very little leverage from integration investments if each integration requirement is viewed in isolation. Second, internal business integration needs are largely ignored especially in companies with scarce resources. And finally, we rarely look for integration requirements that span business functions and domains, and that is really where we get the most bang for our buck in terms of business integration.
What is Business Integration?
We define business integration as “automated interconnection and coordination of business processes, partners, applications and data in support of targeted business objectives.” The keys here are “interconnection” and “targeted objectives.”
As noted below, most business integration is focused on automation of a business process or a set of business processes that implement a desired change in business outcome or behavior. This is what we mean when we say that integration is process-centric. Business objectives and business processes, not technical challenges, drive most business integration projects.
Business integration is also non-invasive. This is a key point. It’s important to think of integration as akin to plumbing, not as a programming exercise. So, what we don't want to do is modify applications; indeed, it may be impossible in many cases to modify applications, because you might be dealing with a commercial application or even an in-house application for which source code is unavailable, or where source code modification is undesirable, for example.
We don't want to be modifying applications as we implement business integration because that means when the time comes to either replace that application or make changes to the behavior of the integration, we have to go in a do some coding.
So, again, think plumbing not programming.
Business integration encompasses both Business-to-Business and Application-to-Application domains. And this wasn't the case just a few years ago when there was a clear separation in the market, at least, between enterprise application integration and B2B integration, for example. Today those distinctions are fading away. There is an emerging consensus that the same capabilities can be used to address both B2B and A2A requirements.
Business integration may cross functional organizational boundaries and, as mentioned, sometimes the highest value business integration opportunities do, indeed, cross those boundaries. Most business integration projects, of course, are pretty tightly focused on a single business function, but the opportunity exists to implement higher order processes that coordinate lower level activities that cross multiple functions and departments.
Another key point is that business integration exploits ready-to-use processes where standards exist. EDI is a good example of this. There is no need to reinvent how EDI works in a business, but it is important that EDI be part of the business integration environment so that you don’t have to stop at just doing EDI translation, for example; you can actually implement EDI processes that include built-in transaction routing, envelope management, functional acknowledgment generation, reconciliation, control number management, and other standard features of the EDI model.
And integrate EDI processes with your application systems making it part of your business integration environment.
That is true of other domains as well, like Data Synchronization and also non-EDI B2B Collaboration using, for example, RosettaNet or other XML standards. So it is important that those ready to use processes or predefined processes be incorporated in the business integration picture.
Business integration also exploits abstract specification methods that support re-use. In fact, it is a key to flexibility and re-use. One final characteristic of business integration is the avoidance of platform and location dependencies. This is not really a requirement but it is best practice.
And, generally if business integration behavior is specified abstractly, then those environment and location dependencies fall out automatically.
High level benefits of business integration
What are some overall benefits of business integration? In general, we get things like process efficiency and reduced latency because of the elimination of manual effort or sometimes inefficient automated mechanisms. So, for example, if we are dealing with a revenue-sensitive set of business processes, order to cash processes, where time is money, literally, then the ability to take latency out of those processes and turn around orders and invoices and payments and all of the other documents types that are involved in bringing money in the door, it is very important to those processes that business integration be as efficient as possible.
Second, Error Reduction and Quality Improvement represent a very important part of business integration benefits. Again, by automating systems, but taking people out of the loop, by implementing functions like validation and look-ups and other functions that can ensure that the quality of the information that comes out of the system is as high as it can be, we can introduce higher levels of quality and lower levels of errors in our business integration solution.
Better Information for Proactive Decision Making. This is one very big reason that companies invest in business integration. And the basic idea here is that because business integration, by nature, touches many parts of your organization and your operational and planning procedures, you can make use of it to capture, either in the process of doing normal business integration processes or by explicit extraction and routing of information, you can make better information available to decision makers and improve the overall effectiveness of your company by doing that.
Increased Flexibility and Agility, really a by-product or a result of the way business integration is implemented. It enables your team to rapidly respond to the new business opportunities and new customer and partner demands. It is the ability to re-configure your business processes as needed, and when
And then finally, Scalability, Better Positioning for Growth. This is sort of a higher order benefit but by implementing business integration, especially implementing it non-invasively, we get the ability to change parts of our business in our IT systems with less impact on other parts of the business and other parts of the IT environment and that, in turn, makes it possible for our companies to grow faster and with fewer side effects.
Why do we do all this? When business integration has been achieved, it is reflected in a degree of stability for both the technology infrastructure and the business itself. A sure sign of application instability, on the other hand, is the existence of too much code around the applications, rendering the cost of owning and maintaining them too close to the cost of replacement.
Business integration is all about business information: the better the information, the more visible the key data, the more able an organization will be in both proactive decision-making (as opposed to reactive), and the more agile an organization can be in reconfiguring business processes in response to both new business opportunities and customer demands.
Efficiency is paramount: not in the systems sense (IT efficiency), but automating manual processes and integrating systems and processes, and eliminating the latency inherent in custom coded interfaces, isolated systems and multiple point solutions
How can you tell if this approach works? Forecasts are more accurate, legacy systems require less maintenance to keep current and second-guessing decreases as business activity increases.
Jim O’Leary is Vice President, Product Management at EXTOL. Jim is an accomplished software marketing professional who has developed and managed product strategies for such companies as Mercator Software,and Software AG.