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Internet growth drives enterprise application integration

This article appears in the issue February 2001 [Volume 10, Issue 2]

Business process re-engineering is an old buzzword that is gaining new meaning as it resurfaces in the form of enterprise application integration (EAI), primarily driven by the need of companies to soup up enterprise IT systems that support Internet-enabled, B2B activities. Virtually all consumer markets are shifting their focus toward a Web-centric business model that is dedicated to immediately satisfying the needs of their customers around-the-clock. When implemented correctly, a new EAI technology infrastructure unifies communications and distributes applications enterprisewide, thereby increasing productivity, cutting costs and improving customer relations--while creating new profit centers along the way.

The ever-evolving Internet is driving explosive growth in e-commerce, customer service and other real-time, interactive business activities. Indeed, Internet-based delivery systems are deconstructing almost all of our conventional business models and forcing corporate America to rebuild them from scratch. Along the way, the Internet is heightening customer expectations daily by raising standards for the delivery of services. Even if a company has not yet implemented e-commerce, its customers expect transaction fulfillment to run at Internet-driven speeds. At the same time, businesses must realize that not every customer is Web-enabled. Customer service solutions must support an evolving mix of both Web-based transactions and traditional document management processes if they are to serve all of a company’s customers.

So, despite all of the hype about the Internet, and as the recent decline of many “dot.com” companies attests, the basic rules of business remain the same. In any business environment, companies must adhere to established business processes while integrating e-business transactions into their business model. As companies adopt e-business as an essential component of their business process infrastructure, it is imperative that they do not abandon all they have learned to date about streamlining conventional business operations. To support the same business model enterprisewide, corporations are turning increasingly to EAI, which allows them to fully automate and integrate traditional back-office functions such as accounting, finance, human resources and manufacturing.

Enterprise application integration is creating significant revenue opportunities for nimble companies that can rapidly implement or adopt the right platform-enabling software. To handle the complex and evolving nature of today’s e-business environment, successful implementation of mission-critical projects is possible only through software solutions that use a fully integrated, end-to-end, e-commerce and business applications architecture. Such a solution must seamlessly combine and deploy distributed applications unobtrusively on a common, Web-enabled, business process platform, then manage them as services to both internal and external customers in a scalable, run-time, “zero-latency” technology environment.

The growth of EAI Since they started computerizing their businesses, organizations have poured billions of dollars into information systems and packaged applications such as accounting, payroll, inventory control and sales force automation. The harsh reality for most IT managers who have been investing in so-called legacy systems for years is that they have created an expensive IT infrastructure that exists as a series of disconnected and disparate “islands of automation,” which can reside on a variety of different hardware and software platforms. The problem is that those platforms employ a diversity of data methods and communications formats that were never intended or designed to communicate with one another, let alone interact with systems of other companies. The goal of EAI is to join them into a united, monolithic, cohesive structure that optimizes their collective functionality while they support a company’s business processes.

Enterprise application integration involves constructing an enterprisewide, computerized infrastructure that provides a logical IT environment for deploying new or changing business processes. Because of the scope and dynamic nature of contemporary business computing, once started, the process of EAI is never really over. It becomes, rather, an ongoing activity of linking together applications, whether purchased or developed in-house, toward the promise of seamlessly integrating them by providing connectors to their various individual enterprise systems. Information technology managers frequently find that application integration accounts for over a third of the cost of a systems implementation project.

EAI accepts and embraces heterogeneity by taking a systematic approach to the integration infrastructure rather than to the applications themselves. The major benefit to EAI is that by creating application connectivity instead of altering internal application structure, it not only leverages the value of legacy applications, but it also maximizes design flexibility and keeps functional options open for an IT manager into the future. While EAI is not the same as B2B integration, EAI is often necessary to optimize B2B operations.

Important implications With 2000 over, EAI has replaced Y2K remediation as the top priority on many company to-do lists for the near future. As the pressure mounts for companies to reap immediate gains from mergers and acquisitions, to expand the electronic interchange of information with trading partners via the Internet, and to deploy best-of-breed business applications, EAI tools have become hot commodities. EAI vendors characteristically provide their customers with solutions that integrate operational or back-office applications (inventory, accounting) with front-office applications (sales, decision support). The present-day trend is to extend the integration of those applications to the Web as an inexpensive way to provide account data to customers.

The implications of EAI may not be as exciting or apocalyptic as Y2K scenarios, but they are just as profound in terms of their importance to the enterprise. A recent Forté-commissioned (forte.co.uk) research report, that was conducted by Spikes Cavell and covered more than 300 large businesses across Europe, found that business users were almost unanimous when it came to the importance of EAI. In fact, 95% of them rated application integration as important and 87% claimed that EAI had increased their ability to do business.

With its core technologies enabling the e-commerce boom, enterprise application integration is poised to remain a solid growth industry for years to come. Companies worldwide spent $420 billion in 1999--nearly half the worldwide IT budget--to develop custom integrations internally. EAI license revenue is projected to double annually from $900 million in 1999 to $3.6 billion in 2001, according to the Gartner Group (gartner.com). By 2006, Gartner predicts that revenue will top $7.3 billion. The top-paying management job this year is in EAI, a category that wasn’t even listed in last year’s survey by Information Week (re: The Corporate Job Market). According to WinterGreen Research (wintergreen.com), a Lexington, MA-based analyst group, the demand for EAI products could propel sales of that segment of the computing industry from $3.4 billion today to $8.9 billion in 2003.

EAI is breaking through barriers as vendors add and strengthen products that, through a unified interface, link companies to their suppliers and partners. That allows them to provide business-to-business integration links that enable sharing of inventory and purchase information. As they shift their focus to e-commerce, companies are concentrating their efforts on integrating their technology with the Web. Consequently, the emphasis on EAI nowadays is primarily driven not directly, by the enterprise, but indirectly, by the Internet.

EAI levels, products and layers Enterprise application integration can be described or categorized according to the level of technical sophistication that is involved. It is generally acknowledged that there are four levels of EAI:

  • point-to-point integration,;

  • structural integration,;

  • process integration and;

  • external integration.;

In point-to-point integration, enterprise applications interchange data, but business intelligence remains within the individual applications. With structural integration, instead of an array of point-to-point application connections, information flows to a centralized hub, and the hub collects business rules for data and transaction exchanges. At the process integration level, tools are used to implement the company business model in the EAI software and to link together business processes and workflows. During external integration, the organization is using EAI to transform the business by extending its business processes directly into the realms of customers and suppliers.

EAI products come in a variety of flavors that are geared toward handling the different levels of EAI, based on the methods for dealing with each of them. Along those lines, first-generation EAI products are essentially middleware retreads. They are used primarily to help developers and integrators in point-to-point integration at EAI level one. Second-generation products go beyond point-to-point integration, and can handle structural integration and process integration, employing data interchange plus APIs to accomplish their tasks. They include scalability features like load distribution, powerful tools for extending application capabilities, and a growing library of canned interfaces for popular systems such as SAP R/3, Baan or Oracle Financials.

Third-generation tools are emerging that, in addition to facilitating process integration, support external integration beyond the organization. A key advantage is that their greater maturity gives them broader range and greater potential for the future. While they still have tools for custom integration, they link them to enabling technologies such as application servers, using Enterprise JavaBeans and ActiveX, messaging- oriented middleware (MOM) and remote procedure calls. Other enablers include XML and related technologies, such as schemas, which are used to decouple providers and users of information; distributed objects, using CORBA or COM to communicate; plus process automation and workflow. Along with those tools and technologies, centralized standards and sites for publishing message schema, such as BizTalk and RosettaNet, have sprung up for sharing the message formats (usually XML) used by industries and business backbone products.

A typical EAI software solution can be envisioned in the form of a three-layered model, depicted by GIGA Information Group in the white paper, Electronic Partner Networks. The resource layer facilitates basic application development. It houses external interfaces, an integration broker for legacy transactions, an application server and development tools from a single vendor. The application value-add middle layer provides comprehensive application architecture for more complex, flexible applications. It contributes components such as adapters and connectors, workflow modeling and rules-based personalization. The workflow layer supports a workflow engine and full workflow and process-modeling capabilities.

Tailor-made However, not all third-generation EAI products enjoy the same features. When evaluating EAI products, it is important to know the capabilities of each one and match them to the integration needs of the organization. In the end, all integration projects require some customized integration to the base applications, which can happen in a variety of ways.

Direct integration capabilities of products include those required to support system interfaces, as well as tools for easily developing and maintaining those interfaces. If there is a need for data integration, the product must have data warehousing capabilities that enable the system to collect and organize data from a variety of different sources. It should also permit the easy identification of database tables or messages formats and allow them to be saved in a common warehouse. In contrast with the “static” nature of a data warehouse, in some cases to get real-time data it is necessary to construct a virtual corporate database, so developers will need repository-based transformation capabilities that allow them to link a number of legacy system source codes with metadata. That linkage permits information to be converted into a format that can be accepted by the target application.

For level-three integration tasks, process automation capabilities are necessary to join applications into a process by using workflow design to link individual actions of one to transactions of another. For example, through process automation, an order entry system can be integrated with a company’s manufacturing and inventory systems. The result will produce a Dell-like build when the customer initiates a business workflow routine through the request process. Process automation software also incorporates a mechanism for building business rules and centralizing business rules among the applications, as well as automatically inserting them into workflow procedures.

EAI deployment When developing an integration framework for EAI deployment, a project manager must understand business process and information integration requirements in addition to legacy systems functionality. He must also take into consideration the complexities introduced by the various business applications to discover how to simplify them during the course of developing the required integration processes. Overlapping and related issues that need to be taken into account would include a KM/business intelligence model, building an e-commerce platform, and developing a toolset that targets the full and complete life cycle for application development. Above all, business process engineering ramifications should not be overlooked in the process.

Using an EAI team’s collective knowledge is necessary to effectively promote the transition from an isolated and fragmented collection of unconnected applications to an integrated application development paradigm. Once emulated, EAI solutions can offer operational insights to integration planning groups. For example, following the flow of transactions through e-business environments allows an integration planning team to determine how specific functions are used. System architects, business analysts, component-based development experts and EAI project leaders must work closely together to plan a successful strategy that takes them to the envisioned final system in the least disruptive manner.

Process-driven The need for application integration is compelled by business dynamics that, at times, can outdistance existing technologies. To compete at the speed of business in today’s instant, Internet-driven world, organizations need to redefine and re-engineer their most critical business processes. That means changing business strategies, business processes and technology platforms--in that order. The point is, application integration is only an implementation methodology—it not a business solution in itself. In order to survive in business, an IT manager must make sure that his EAI plan is process-driven.

Fragmentation of technology systems across software packages, custom applications, hardware platforms, legacy systems, databases and other applied knowledge systems keeps companies from deploying their core business skills effectively. The absence of business processes and applications that are interoperable, highly connected, and tightly integrated, invariably translates into systemic inefficiencies, poor customer service, and lost business opportunities that, in turn, ultimately lead to lost profits. Indeed, the Forté report mentioned earlier revealed that 77% of IT respondents and 70% of business respondents were aware that a lack of application integration produced a significant negative cost impact on their business.

Business process-driven EAI allows existing applications to be recycled as supportive stages of next-generation business processes that will enable a company to effectively focus on its core capabilities. Maximum reuse, minimum coding and reduced time to market are EAI’s enabling benefits. Application integration’s holistic approach generates solutions that are synchronized to the bigger needs of the business enterprise and its customer base--solutions that grant the adaptability required to react swiftly to the dynamics of corporate change. The ultimate goal is to streamline, integrate and migrate legacy environments into a cohesive architecture that is resilient to technology fragmentation, even as it evolves.

These goals and benefits suggest that, when building an EAI architecture, it is best to begin by launching a business strategy initiative. To generate maximum value, the EAI planning team should concentrate application buy-build decisions on mission-critical business processes that actualize the company’s competitive advantage. Platform customization should be determined by the amount of work required to complement the packaged integration capabilities and prefabricated adapters and connectors of the vendor-provided, EAI software. Then, the application architecture can be designed by the IT department to satisfy custom development requirements. Intelligently planned, process-driven, enterprise application integration can deliver impressive results quickly—and, in so doing, it can succeed in raising senior management’s opinion of the role of the IT department to new heights.

Portions of this article were taken from the AIIM white paper “Enterprise Application Integration—an Overview” by Arthur Gingrande, partner, IMERGE Consulting, with technical assistance from Bernard Chester, principal, IMERGE, available soon from the AIIM bookstore at www.aiim.org. Arthur Gingrande can be reached at 781-258-8181, e-mail arthur@imergeconsult.com. Bernard Chester can be contacted at 206-979-7389, e-mail bchester@imergeconsult.com.


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