DAMNED If You Do

DAMNED If You Do..

Will integration tools patch the holes left by an unsatisfactory ERP implementation?
BY LEE PENDER

Objectivos

Understand the potential pitfalls of EAI technology

Learn why EAI is not a cure-all or quick-fix solution

Discover what to look for when choosing an EAI tool

WHEN MICHAEL R. SPANO JR. set out to re-create his company's enterprise systems in the summer of 1998, he knew application integration wasn't going to be easy. The CIO of Siemens Power Transmission and Distribution in Raleigh, N.C., chose general ledger and electronic data interchange applications from Baan Co. as the company's fundamental enterprise resource planning (ERP) applications. He then planned to add more preintegrated Baan applications in phases.
    But like so many other CIOs' plans for ERP perfection, Spano's scheme hit a snag. Recoiling from the $12 million bill for the first phase of the company's ERP implementation—a price tag CIOs know as acceptable, if not unbelievably low—the financial powers that were put a halt to Spano's project. Since then, Spano has been forced to make do with a slate of disparate applications. Components such as project management remain in the realm of third-party applications, some of which are becoming outdated.
    "We had a full-blown plan, but when we ran out of money, [the system] became piecemeal," Spano says. "After Phase 1, they said we couldn't afford to keep going.
    There's absolutely nothing I can do. When the bean counter tightens the purse strings, you're hosed."
    "Hosed" describes the state in which many CIOs find themselves in the aftermath of ERP implementations. In the mid to late 1990s, ERP became the rage as a solution to the 2000 threat. It also promised the decline of clunky legacy systems that often did not coexist harmoniously within an enterprise. ERP had components to automate just about everything a company needed to do—from payroll to manufacturing. The technology would ideally allow CIOs to update and integrate enterprise systems.
    But, as many CIOs have experienced, it didn't always provide the integration they expected. As a result, IT executives are faced once again with the challenge of integrating enterprise applications—a challenge heightened by the hypercompetitive race to establish an e-commerce foothold. Seizing the opportunity, a bevy of new vendors has sprung up with the goal of providing relatively simple, low-cost applications for tying one piece of enterprise software to another. Enterprise application integration (EAI) software has moved from buzz term to hot market (see "Middleware Demystified," May 15, 2000). The EAI market is hot for one reason: Many CIOs need the technology. And they need it now.
    It's easy to understand why CIOs have this need. EAI aims to automate the process of tying together disparate systems, eliminating the need for building laborious custom interfaces to link applications. Ideally, these tools will facilitate information sharing among multiple applications and trigger business processes from application to application. The ultimate goal of EAI is to provide the type of unified enterprise system that will handle everything from customer self-service and order entry on the front end to financials and inventory on the back end.

The Dark Side of EAI
Like all immature technologies, however, EAI tools have their shortcomings and potential pitfalls. And although the EAI revolution has taken some weight off CIOs and their staffs, IT executives looking for a quick fix will likely be disappointed. Before implementing EAI, CIOs must first be prepared to deal with the technology's potential problems: cost overruns, poor interface design and the inability to provide full system integration, among others.
    First and foremost, EAI tools fall short in interface design. Despite vendor promises of easy-to-use tools, the GUIs can still be daunting. That's a problem because an easy-to-use interface for developers and users is critical to the speed of an implementation and to post-implementation user acceptance. In addition, ease of use plays a key role in determining how much support a system will need once it's up and running. And support costs money.
    Although EAI has helped relieve the cost of writing interfaces in-house, support costs can still climb dangerously high, says Beth Gold-Bernstein, vice president of strategic products and services at White Plains, N.Y.-based ebizQ.net, which aggregates information and provides buying recommendations for EAI tools. However, as with other enterprise tools, the cost of the software itself is only a fraction of the total cost of implementing a package. Companies are spending five times more on services than they are spending on software when implementing EAI tools, Gold-Bernstein says.
    And EAI is no quick fix, either. Because the most important factors CIOs must consider when choosing an EAI tool are their integration goals and the tools that best fit their systems, IS departments often must conduct thorough—and therefore time-consuming—evaluations of vendors while taking stock of their own application portfolios. And once a CIO chooses a vendor, he cannot necessarily count on a rapid implementation. Spano says the biggest problem he has faced in the EAI search process is implementation timetables from vendors that do not meet his urgent need for e-commerce, customer relationship management (CRM) and ERP integration. Some vendors, he says, propose integration projects with schedules measured in years, not months.
    "If I don't play in the e-commerce game in the next year or two, there's no reason to stay in business," Spano says. "I've got to take a short cut. I don't have five years."
    But no matter how much time or money an integration project consumes, it will likely still fall short of providing the full

If I don't play in the e-commerce game in the next year or two, there's no reason to stay in business.

—MICHAEL SPANO JR.

system integration that has become the ambitious goal of every CIO. While EAI tools are handy for connecting a single application to another, few—if any—can provide "many-to-many" integration, or link multiple applications to other application sets under a common interface.
    Such integration is important because it is virtually impossible to develop a single, unified system without it. Linking systems point by point across the enterprise can help streamline some processes, but without a single system interface and unified business processes across applications, a company will not be able to maximize its cost savings and efficiency—or ensure that its outward-facing CRM and e-commerce technologies are consistently providing customers with timely and verifiable information.
    "Some vendors are putting in some simple transformation technology," Gold-Bernstein says, referring to tools that allow two applications to share information through a common data format. "Many-to-many integration requires a higher level of transformation. Ease of use, common tooling and manageability across the stack is the No. 1 goal."
    Many-to-many integration becomes even more complicated when one of the integration targets is another EAI tool. Companies facing post-merger or post-acquisition integration projects are often

The still-maturing EAI market simply hasn't produced many tools aimed at facilitating the difficult process of integrating the integration tools.

forced to develop EAI-to-EAI hookups. But EAI vendors have, for the most part, not focused on developing tools to link each other's applications. However, if two companies have systems tied together by EAI applications, those applications need to interface with each other and serve as a point of connection between systems. Furthermore, the still-maturing EAI market simply hasn't produced many tools aimed at facilitating the difficult process of integrating the integration tools.
    "I don't think anybody makes middleware that adapts middleware to middleware," Spano says. "They want you to replace it. That's definitely going to become an issue."

Need for Process Integration
Another anxiously awaited step in the market's maturity is the development of tools that can handle process integration. The heart and soul of EAI is data integration, converting types of data into a format that can pass between systems. But business processes—the practices a business has developed to execute actions such as fulfilling inventory and notifying customers of shipments—are still the realm of enterprise systems. While a few EAI tools will handle process integration, many are still basic data-translation tools. The charter of ERP was to automate business processes, and those processes are now an integral part of enterprise technology. EAI tools must ensure that a process inherent in Application A can trigger an appropriate response in Application B. That goes beyond simple information sharing and involves setting up triggers that will notify applications when to execute a particular action.
    "The customers who fail in this arena are the ones who fail to understand it's a process flow," says Ed Pillard, EAI managing partner at PricewaterhouseCoopers in Edison, N.J. "What it really says is that when [customers] order a PC from [a manufacturer], they tell their supplier in real-time that inventory for that [PC's] motherboard just got [reduced] by one. The supplier is on the hook to keep track of those decrements. When you have a fully integrated environment, you can really do that."
    John Jalovec, director of global programs in the IT department at Delphi Automotive Systems in Troy, Mich., says data transfer and process integration are almost impossible to separate because the data being transferred is moving with the purpose of executing a process. Therefore, having an EAI tool that handles both types of integration is critical.
    Jalovec says he's in the process of using tools from Crossworlds Software to link SAP R/3 to a legacy mainframe system and e-commerce applications. Process integration is critical because applications linked by a data transformation tool become key to carrying out business processes and executing processes as one single application would, not as two disparate applications acting separately.

Unfortunately, Simpler Is Better
But even though EAI is not the ideal solution, many CIOs will be forced to take it on since they don't have much choice. In a sense, the challenge of choosing an EAI tool and developing a strategy is similar to the process of implementing ERP. Setting ultimate goals for the enterprise system and assessing the complexity of applications are paramount. To determine the tool that best fulfills their requirements, CIOs need to do some soul-searching within their enterprise architectures. For example, the more complex the business processes and the more sophisticated the applications, the less positive an impact EAI will have. A company that uses applications to support multiple processes and scenarios will not get as far with EAI as one that relies more on simpler, less process-intensive applications.
    Diversity of technology is also a factor. IT shops that run multiple platforms or use databases from several vendors will almost certainly have plenty of custom coding to do even after an EAI tool is in place. No tool, for instance, completely eliminates the need to handwrite code in the integration process. What is important to ferret out is the degree to which a tool automates integration and how much work it leaves for an IT staff or a team of consultants to finish.
    When Wayne Usie, vice president of IT for the discount retail chain Family Dollar Stores in Charlotte, N.C., was looking for an EAI tool, "most [vendors] were trying to tout that they could touch every job you have in every system and link them together," he says.
    In an effort to implement batch processing, Usie's company is using tools from EAI vendor AppWorx Corp. He essentially linked Family Dollar's retail-specific merchandising system, made by Retek, to Oracle's ERP applications and a warehouse management system from Catalyst International. AppWorx can be used to detect and recover errors in the data-processing process, thereby filling a gap left by the lack of a batch-processing management tool on the part of Retek. Usie is quick to note that his system, still under development, is relatively simple because Family Dollar customers do not buy online.
    In addition, Oracle handled much of the custom integration work that allowed its ERP applications to work with Retek and Catalyst in the first place. Universal integration fixes in the form of EAI tools are not quite on the horizon yet, Usie says. Custom integration and help from application vendors are still part of the EAI implementation process, which becomes more difficult for companies with systems more complicated than Family Dollar's. "There's more complexity in certain environments than in others," he says. "The problem is getting integration generic enough for anybody."
    While EAI has its own set of concerns, it is also dogged by some of the more traditional problems that often accompany other

The problem with EAI is getting integration generic enough for anybody.

—WAYNE USIE

software applications. Security is an issue, as it is with any enterprise project, but the most potentially troublesome issue is scalability. EAI tools have to scale with multiple applications, and because the technology is still a new concept, there are few reliable benchmarks for testing its scalability. CIOs, as a result, must be careful to plan for the eventuality that EAI might not keep up with a company's growth. "We can't even define what a benchmark-integration process is," Gold-Bernstein says. "Some companies have installed some solutions and found they would not scale to meet their needs."

Making Do
Ultimately, as with most emerging technologies, EAI tools should improve, but CIOs know better than to rely on the potential of technology rather than on what it offers today. Analysts predict consolidation in the market as vendors partner with each other to join the stronger features of their offerings. ERP vendors are getting into the act too. This fall, SAP will collocate facilities with several EAI vendors in hopes of developing integration tools designed to link R/3 to external systems.
    There is hope, too, that trends such as online marketplaces will lead enterprise application vendors to open their often difficult-to-integrate systems, thereby relieving some of the need for EAI tools. But CIOs have heard it all before. ERP, once heralded as a savior of enterprise technology, has caused almost as many problems as it set out to solve, and EAI has the potential to ultimately be similarly problematic—despite predictions that tools will improve with time and development.
    "I would characterize the [EAI] field as immature," Pillard says. "If it were an ideal world, I'd tell my clients not to implement anything until Version 3. But it's not an ideal world." Once reality sets in, CIOs need to assess and recognize their business needs.
    "The advice I would give [a CIO is to] understand the business problem you're trying to solve," Gold-Bernstein says. "The problem occurs when you don't identify the business problems well enough to recognize the tool sets that you need."
    Indeed, the CIO who is not racing to pursue the Holy Grail of integration is a rare—and possibly nonexistent—breed. E-commerce pressure and the need to cut costs and streamline operations are pushing IT departments to evaluate EAI as soon as possible. For Spano, the situation is nearly dire. There is no time to wait for—or bet on—the maturation of EAI tools. When used properly and after considerable study, EAI tools can be the first step on the road to integrating the leftovers of ERP and the new applications driving e-commerce. They will not, however, be the cheap and easy cure-all many CIOs so desperately need. The path to integration through EAI is still unpaved, and the best action CIOs can take is to approach with caution.