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Adding e-commerce to legacy systems

Despite the slowdown among dot.coms, business and government organizations are continuing to become more Web-centric. Traditional retailers are adding online sales channels, banks are providing online transaction capability and e-marketplaces are being launched. We hear a lot about the front office and back office, and how they need to communicate in e-commerce applications. What happens when they don't? A customer uses a retailer's Web site to order a product, but doesn't know that the product is out of stock and that delivery will be delayed by two weeks.

The origin of the problem is straightforward. Most companies' IT systems were developed before e-commerce came on the scene. Therefore, no built-in connections existed between the Web site and the enterprise infrastructure when the company added an online channel.

New companies, especially those that are Internet-based, have an advantage. They can implement an integrated system that connects everything from the very beginning--an e-commerce platform, customer relationship management (CRM), accounting, inventory and so forth. But the majority of e-commerce applications are add-ons from brick-and-mortar companies seeking to extend their reach. What can they do to integrate e-commerce with their other enterprise applications?

One option is to seek out e-commerce platforms that can connect to their legacy systems via "point-to-point" linkages, from one application directly to another. Vendors are making that easier as time goes on, by forging partnerships and writing APIs. Many of the e-commerce products such as Ariba’s B2B Commerce Platform have built connections to Oracle, SAP, and PeopleSoft to access enterprise resource planning (ERP) systems. However, those point-to-point solutions are not inherently flexible, and become complex when multiple applications are required.

Another option is to add an enterprise application integration (EAI) product that connects all the applications at a central hub. Among the companies in that market are TIBCO Software, webMethods, Vitria, CrossWorlds, SeeBeyond and Actional. Not only can the e-commerce application talk to the back office, but all of the internal IT systems can then communicate with each other. (For a detailed discussion of EAI, see ""Internet Growth Drives Enterprise Application Integration," by Arthur Gingrande, KMWorld, February 2001.)

Integration is a good way to leverage existing assets, which may include applications, data and intellectual capital. In addition, it offers an executive-level view of business processes that contributes directly to more effective strategic planning. Better predictions can be made about events that depend on multiple factors--customer behavior, inventory and staffing levels, for example, when those elements are transparent and connected. Finally, integration opens not only customer channels but also the supply chain. A wide variety of software is available that allows enterprises to add an e-commerce capability while improving their internal processes.

TIBCO offers a comprehensive suite of products that covers business process integration and automation, content management, and integration with other enterprises and marketplaces. TIBCO is widely used in virtual trading applications such as Enron’s marketplaces. It is also used in such high-volume sites as Yahoo Finance, Motorola and Delta Airlines. Delta is using it to provide information to front-line employees about operational events such as passenger boardings. That real-time information will allow Delta to offer improved customer service and adapt quickly to changing circumstances. TIBCO ActiveEnterprise is being implemented at NASDAQ to allow financial institutions to send real-time market data to professional traders and individual investors.

"There has been a lot of hype about e-procurement in the last year," says Shankar Iyer, VP of products at TIBCO. "Companies felt pressured to have an online purchase capability, for example." He points out that while it may be efficient to purchase indirect materials such as office supplies online, the real value in e-procurement comes from optimizing dealings with both buy and sell side for their direct supplies. To do so, integration must be pervasive throughout the supply chain.

"Companies are also still looking for ways to re-engineer their business processes," he adds. "They need to put in business process management that works across these layers." webMethods made an early commitment to XML and has benefited from that decision. Adherence to the emerging standard has facilitated not only implementation of its products, but also the establishment of partnerships with such companies as Ariba, BroadVision, and CommerceOne. A key feature of webMethods' products is that they employ graphical tools to generate code, which reduces cost and time for integration. A typical integration takes six to 12 weeks.

The webMethods Integration Platform includes webMethods Enterprise for integrating business applications and processes within the enterprise, and webMethods B2B for integrating external processes such as procurement and supply chain management. Technology from webMethods is also used in products such as SAP Business Connector, which allows SAP and non-SAP users to carry out transactions with each other.

W. W. Grainger , a provider of maintenance equipment and services, used webMethods B2B to integrate its online procurement sites ( FindMRO.com, and TotalMRO.com) with its internal databases. Its SAP R/3 ERP system contains inventory and pricing information, which customers can now access directly when they place an order. The orders also now go directly from the Web site into Grainger's SAP R/3 ERP system, so they no longer need to be rekeyed. Integration improves both external and internal business processes.

"Companies want to improve their customer service by having real-time access to all their systems," says Zach Urlocher, VP of webMethods, "but they also want to enhance their supply chain performance." With a shorter cycle time, companies can rely on just-in-time inventory to reduce the need to keep stock on hand. LSI Logic reduced the time to place a purchase order for supplies from about 12 days to a day-and-a-half, and the cost along with it, from $25 to $5.

Actional uses a different paradigm from that of most other integration vendors. Control Broker 3.0 resides within the front- and back-end applications rather than on a central server.

"Our product allows viewing of the data from within the native application," says Ron Eager, director of marketing at Actional. It can work either as a point-to-point solution or in an existing middleware environment. The user can have a complete view of the application from within a product such as Siebel at the front end or SAP at the back end.

"This means a lot less retraining for our customers," Eager points out. "In addition, implementation integration can be done in a matter of weeks, rather than months." Eager maintains that processing time for transactions is significantly reduced with Control Broker because it does not require numerous data "hops" through a centralized middleware platform. That approach enables request-reply round trip data throughput at near-zero latency speeds, a critical feature for systems that are dealing with large amounts of customer-facing data..

Sabre used Actional's Control Broker to link a disparate set of applications related to its travel businesses. Sabre is the worldwide leader in computer reservations, with nearly 40% of agent bookings served through its computer reservation system (CRS). The company also developed Travelocity.com, the first Web travel site for consumers, and provides travel-related IT solutions for corporations. Its reservation system is based on IBM's Transaction Processing Facility (TPF), a proprietary operating system designed for high throughput. Actional was selected because of its speed and ability to connect the existing Sabre Structured Data protocol to CORBA.

"We didn't want to continue propagating proprietary solutions," says Andy Morrison, director of enterprise architecture at Sabre. "We had a lot of legacy data in addition to the TPF system, as well as our new Web sites, and wanted a flexible architecture."

The system has been tested and certified, and is scheduled to "go live" within the next few weeks. Custom code was required for the TPF connection, but for other interfaces, pre-built connections were available.

"One benefit that was not an explicit goal, but turned out to be very positive, is that we now have a platform that can adapt to new initiatives," says Morrison. He is enthusiastic about the flexibility that the new system will have. "A year ago, many people were unfamiliar with XML, SOAP and Web services. With our new system, we can keep pace with the options these new technologies bring."

Two other companies, Level 8 Systems and UDIco are less visible in the market but offer some interesting capabilities. A large bank based in Amsterdam, ABN AMRO, used Geneva Integrator from Level 8 to build a cash management system that connects its Web site to its back-office legacy systems. The company already had an EAI system but wanted to handle customer inquiries through its Web site. Geneva Integrator set up the new system, which converts data from legacy systems to XML and HTML. Implementation took four months, and ABN AMRO is reporting savings in both development costs and annual maintenance.

The system used the built-in connectors that come with Geneva Integrator, but custom connectors also can be developed. The Geneva High Performance Integration Platform provides both e-business object automation and e-business process automation. In June, Level 8 will launch its enhancement of Cicero, for which it obtained exclusive rights from Merrill Lynch, Pierce, Fenner & Smith. Cicero is designed to integrate applications at the desktop and is focused on the call center market.

UDICo's Universal Data Interface (UDI) is a versatile, XML-based product that is designed for high-volume environments. It was developed at PricewaterhouseCoopers for use by its clients, and UDICo was later spun off as a separate company. Bob DuCharme, VP of corporate documentation for UDICo, says, "UDI is ideally suited to applications such as banks, which require high-speed transaction processing."

The product increases throughput as compared to other messaging middleware products by using "dynamic message grouping." That technique reduces latency caused by the overhead of the data transport layer that carries metadata. UDI can be used for Web-based transaction processing, messaging applications within the enterprise, high-volume batch processing, and electronic billing presentment and payment (EBPP). It is presently being redesigned for greater ease of use by developers.

The implementation phase can be facilitated by using an experienced integrator. eFORCE, for example, specializes in building sophisticated e-business solutions for Fortune 1000 companies.

“We pick up after the strategic planning phase is completed," says John Hitchcock, VP of marketing. "Some clients have picked out the software they want to use, while others want guidance with this phase." eFORCE uses an implementation methodology called eBRIDGE that structures the development and assists with the transition to the new system. Many of eFORCE's clients are traditional companies that want to add an e-commerce interface. For example, the company built an online trading exchange for Bank of America (boa.com) and the infrastructure for e-STEEL, a B2B marketplace for direct material sales in the steel industry.

For the future, integration will allow e-commerce to move to a different level. Initially, the focus has been on efficiency and affordability.

"Integration will allow enterprises to begin collaborative commerce," says Shankar, "in which purchasers share more about their businesses and suppliers gain a deeper understanding of those needs." Integration will be an essential ingredient for the success of that endeavor.

Judith Lamont is a research analyst with Zentek Corp., e-mail jlamont@sprintmail.com.

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