Quelle: CIO USA
If you order speakers from Bose, your order goes into a system CIORobert Ramrath calls the Common Order Interface. Ramrath's group knitthis custom framework together about three years ago. Two legacy callcenter applications, plus a Web commerce app built mostly withMicrosoft tools, are all linked to an underlying database andconnected to the corporate back-office ERP system so your order windsup in SAP regardless of how it was placed.
That's the kind of setup for which enterprise application integration(EAI) tools were born. EAI software connects applications through acentral message-routing hub, similar to middleware tools like IBM'sMQSeries. However, EAI tools are also equipped to parse and translatedata, and automatically route information according to businessprocesses.
Framingham, Mass.-based Bose passed over EAI and built its orderingframework using custom code and SAP's proprietary BAPI integrationlanguage. Ramrath describes the experience as painful; so why didn'the choose EAI instead? EAI tools were less mature back when Ramrathstarted his project. The big kicker was that a robust EAIimplementation can easily cost half a million dollars. That's too muchexpense for a single integration project to bear.
The idea with EAI, of course, is to spread the costs over all yourintegration projects CRM, e-commerce, legacy extractions and everythingelse. That's a nice idea in theory, but cost-justificationspreadsheets are notoriously resistant to theory. "We're alwayskeeping an eye on EAI tools. They're expensive, and the only way youcan justify that expense is if you look way out" into the future,Ramrath says. "We can see it if we compare the loaded cost of doing[multiple integration projects] ourselves.... But there are a lot of'what-ifs' in that cost analysis."
EAI is infrastructure, and cost justification is always a tough sellfor infrastructure projects. Taking a long-term view, however, theonly thing more expensive is not using these tools or anotherconsistent enterprise wide integration method like .Net or Webservices. Yes, EAI's real payoff is in business agility the ability tochange business processes quickly but in today's economy that's notlikely to squeeze a check out of the CFO.
However, big companies such as General Motors report concrete savingsof as much as 80 percent on certain integration projects once themessaging hub is in place and reuse of interfaces starts to kick in.Smaller companies have a tougher decision to make, but those withmultiple or business-critical integration needs can also experiencebenefits from EAI. As long as CIOs have a clear-eyed understanding ofthe up-front costs (including consulting and maintenance tabs),pursuing a coherent integration strategy such as EAI should pay off inthe long run.
Poised for Payback
Detroit-based General Motors is the poster child for EAI because ofthe sheer size of its application portfolio. Cherri Musser, CIO of eGMand process information officer of supply chain for the informationsystems and services organization, was seeking "a higher level ofreusability" in her interface code. She also wanted to simplify eGM'stangled web of applications. Both efforts would save the companymoney.
The vast array of applications under Musser's care includes all ofGM's consumer-facing Web activity, a Siebel CRM system, dealer supportsystems and portal software from iPlanet. GM's supply chainapplication infrastructure includes connections to Covisint, a customvehicle order management system, planning and logistics applications,and inventory management. Some GM units (those in smaller geographicalregions) use SAP as their foundation. Others don't. Also, there is ani2 Technologies supply chain management package rollout under way.That package will replace older planning applications as part of anambitious reengineering of GM's entire order-to-delivery process. SoMusser's integration efforts are aimed at a moving target, whichincludes thousands of legacy systems, she says.
All of GM standardized on SeeBeyond's EAI toolset. Musser says hergroup solicited bids for a set of integration tasks, and identifiedsignificant savings with the SeeBeyond software, though GM won'tdivulge the exact dollar figures involved.
Musser's team took several approaches to selling business-sideexecutives on the SeeBeyond purchase. For starters, she demonstratedthe concept of EAI through simple diagrams. The simplicity of having asingle connector to each application, instead of many interconnectedlegs for every system, made the potential payoff conceptually strong.Her group then presented the actual bids to her business counterpartsfor their evaluation. Among the bids was an approach that involvedcobbling together EAI-like functionality from various other middlewaretools. GM had already experienced the difficulty of such a piecemealapproach. "We had previously made a couple of starts at trying to getan integration hub set up, with linkages into that hub," Musser says,but the effort and cost required to connect various pieces provedoverwhelming.
Musser strengthened the business case for EAI by collaborating withher counterpart, GM's process information officer for themanufacturing area. The more projects that go under an EAI umbrella,the better the potential payoff will be because interface reuse goesup. When manufacturing agreed to use SeeBeyond for integrationprojects as well, that offered additional savings for GM. That's whybig enterprises with multiple projects can achieve a demonstrable EAIROI more readily than smaller companies.
Now Musser is in the thick of a phased rollout of the SeeBeyondsoftware. The first project on her docket was establishing aconnection to Vector, a logistics service provider (and joint venturebetween GM and CNF Transportation), writing scripts that dig data outof legacy systems. Having a key project to get the payback meterticking is an important part of achieving and demonstrating EAI ROI.Thus far GM's savings are meeting expectations and will rise as thecompany begins to reuse its interface code for additionalapplications.
That's a simple strategy echoed by TransUnion Executive Vice Presidentand CIO Len Lombardo. TransUnion, a Chicago-based consumer creditreporting agency, has begun to implement Vitria's EAI tool.TransUnion's first EAI project was a pass-through to an insuranceunderwriting system that draws data from a third party, combines itwith data from TransUnion and delivers it to insurance companiesevaluating policy decisions. Based on the company's work so far,Lombardo says Vitria will provide cost reductions ranging from 40percent to 80 percent on future integration efforts. However, he ismore enthused about the speed with which these interfaces can be putin place. Data is the corporate product, and creating a new productlike the underwriting package "goes straight to the bottom line," hesays. "Credit reporting is our core business, but as we grow intoother areas, we need to have an engine to help bundle productstogether from different partnerships and different data sources."Without EAI, Lombardo says new TransUnion products would require twiceas much time, or longer.
Lombardo's statements hint at what Beth Gold-Bernstein, vice presidentof strategic products and services at White Plains, N.Y.-basedconsultancy EbizQ, points out as the greater benefits of EAI providingmanagement of and real-time visibility into business processes acrossthe company and across interactions with business partners. With EAIin place, companies can use a graphical tool to model work processessuch as order fulfillment. Change those processes by pointing andclicking, and the EAI software will reflect those updates correctly inits code for routing or transforming data. "You can continue to usethe existing investment [in applications] underneath this EAI layer,[since it is] already working and managing the transactions but use EAIto change processes and reduce cycle times," saysGold-Bernstein.
Costly at Many Levels
Make no mistake: EAI systems are expensive. Top-end EAI covers a lotof turfa stack of functions from basic messaging up through businessprocess management. On top of this central engine, EAI customers buy"adapters" to connect to their applications (such as an SAP or Siebeladapter) and custom adapters for idiosyncratic legacyapplications.
There's more to the total cost than just the software. EAI projectscarry three red flags: consulting costs, maintenance costs and datadefinition problems that can drive up the first two costs. Those areclassic IT project expenditures, but they're worth flagging with EAIbecause early vendor marketing efforts suggested the idea that EAIstuff is off-the-shelf, once-and-done, plug-and-play. Not so, saypractitioners.
First of all, doing a high-end EAI implementation without consultantsis inadvisable if not impossible. "It's terribly expensive to use [BigFive consultants], but the only thing more expensive is not usingthem," says Dennis Benner, executive vice president of AutoByTel.com.Benner began digging into EAI three or four years ago as CIO ofconstruction and energy company Fluor Corp., where he had nearly 80systems he needed to connect to the central ERP software. ("To saythat was a challenge is to suggest that WWII was 'inconvenient," hesays.) The complexity of the software and the high-end integrationprojects for which it's used mean consultants are anecessity.
In fact, big companies often bring in not only third-party consultantsbut the EAI vendors themselves. For General Motors' SeeBeyondimplementation, for example, the company called inPricewaterhouseCooper's and Cap Gemini Ernst & Young, as well aspersonnel from the software vendor, for deep technical expertise.Since GM is heavily outsourced, Musser says the company will continueto depend on outside help to maintain and update its links because,like all other software, EAI does require maintenance.
TransUnion's Lombardo expects to keep the software in order with oneor two full-time employees. "There can be decreased cost based onpersonnel, but more commonly those costs are displaced rather thandecreased," says Gold-Bernstein. In other words, the folks who werehand-coding interfaces frequently get reassigned to maintain the EAIlinks. Same head count, different tasks.
Many companies like TransUnion are banking on connections to otherbusinesses to make EAI worthwhile. While the potential forintercompany payoff may be great, it takes extra efforts to make thoseconnections work. As Benner points out, data definitions usually varyfrom company to company or even within a single company. Drawing on hisdays at Fluor for an example, Benner says, "I may sell a pipe that'scertified for $10 and a noncertified version for $7. They havedifferent part numbers, but under the covers it's the same pipe. Thepart-number issue can drive people nuts. That's the bigger problemthan being technically able to pass data from one system to theother."
If a company has trouble defining a "part" or "customer" (and almostall do), imagine the disparity across company borders. EAI tools havethe capacity to address those problems through their ability totransform data as it moves from point to point. However, the legworkof describing the differences and training the EAI tool to map datacorrectly from one system to another is something that won't beautomated.
TransUnion is fortunate in this regard, so far. Lombardo didn't facedata mismatch problems to that extent in his first Vitria projectbecause the data from Axciom is simply packaged with TransUnion data.The two data sets are different, so there are no overlap or mismatchissues. However, data still requires extensive testing to ensure itsadherence to TransUnion's standards. Other companies probably won't beso fortunate and will have to carefully examine all data definitionsinvolved in EAI integration projects.
On Sale Now
EAI vendors may follow the same pricing strategy as ERP makers: Sellhigh to the Fortune 500 first, then lower the price in search ofmidmarket buyers later. Smaller companies in particular may balk attoday's EAI sticker price and choose to wait, or they may look atlower-end EAI tools.
Which brings us back to the conundrum faced by Robert Ramrath at Bosewhen he built his company's Custom Order Interface pay more up frontfor EAI, or pay more later when it's time to change systems andprocesses.
Now that the tools have grown up, Ramrath finds himself pondering EAIagain. Bose just completed a high-level study of EAI tools thatincludes five distinct possible business-planning scenarios. In otherwords, the payback will change depending on how Bose's business playsout during the next several years and the additional integrationprojects it might or might not undertake. Will Bose take the plunge?Will you?