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EAI – Refine the Economics of Integration

M.GANESHKUMAR Manager – Client Services Rising Solutions Pvt Ltd

REFINE THE ECONOMICS OF INTEGRATION.

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Enterprise Application Integration: - Need of the Hour Executive Summary: Competitive pressures, macroeconomic volatility, corporate mergers, acquisitions, the Internet, shortened

product development times, shortened production cycles, shifting supplier relationships, and diverse

customer demands are forcing companies to adapt to changing market conditions. Markets in every

industry need application integration solutions that are reliable, secure, centrally managed, and scalable

to a very large number of disparate users. The business and economic environment presents companies

with challenges that can only be met by real time exchange of transaction information. The following

document focuses the need for an Enterprise Application Integration on both ends of the customer and

the providers.

Need for an Enterprise Integration: As the need to meet increasing customer and business partner expectations for real-time information

continues to rise, companies are being forced to link their disparate systems to provide information at

higher levels of quality, efficiency and clarity.

Major changes in the business and technology are forcing organizations to enhance their business

efficiency. Business processes are seldom stand-alone and depend on information from other business

processes to improve efficiency in performing a task. Improving business efficiency can be analyzed to be

all about improving business processes and eliminating dependence issues between different business

processes. The goal of all organizations striving to achieve business efficiency is to make business

processes more cost effective through effective reduction in time, cost, and overhead of performing

business.

Today IT managers in many companies face serious threats in Integrating the legacy and disparate

systems as shown below in the Figure to acquire real time data’s which forms the backbone of business

excellence.

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Is this the questions and discussions that your enterprise talks about?

1) Current Systems are becoming obsolete (legacy)?

2) Consider the replacement of one system because it doesn’t interface well with other systems?

3) Application misbehaves and the organization has to shut down every system or a number of

systems in order to fix the bug?

4) Currently the organization is compromising functionality in order to interface systems

5) Duplication of data takes place decreasing employee efficiency.

6) Merging with another company.

7) The Current system is negatively impacting the organization’s ability to grow.

8) The Organization is unable to replace a system because it is tightly integrated with other applications.

9) Business Logic that continuously changes such as tax calculations, sales discounts and

surcharges has to be constantly recoded into multiple applications.

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Analyzing the scenarios discussed above the term EAI presume to be a magic wizard or a technical

mantra for any enterprise in solving their complex business problems.

This Integration scenario can be a boon for IT managers who kept their fingers crossed in bringing

business excellence from their complex business processes.

If an organization is experiencing one or more of the above business conditions, it is time to seriously

consider implementing an EAI solutions or replacing the current one

EAI: Enterprise Application Integration EAI (Enterprise Application Integration) is defined as the methodology and technology of Any-to-Any integration of heterogeneous application logics and data repositories and formats so that they provide optimal automated value to each other and optimal synergistic value to enterprise and multi-enterprise systems.

EAI addressed the need of integrating diverse applications and creating an information backbone. Once

in place, the EAI backbone becomes reusable and strategic asset, readily available to provide the next

generation integration capability required to construct complex business processes.

Having an EAI backbone embedded into the IT Architecture also catalyses change process. After

plugging into the backbone, applications seldom need to know the actual data source. If a particular set of

transactions, as dictated by the current application, is implemented in the newer system can be plugged

in to the architecture without the information consumers ever knowing of the change.

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The Right Strategy for EAI:

In a pre-integrated phase, companies and customers suffer from numerous problems. Dealing with

multiple stovepipe departments frustrates customers, where the right hand doesn’t know what the left

hand is doing. From the Return On Investment (ROI) perspective, companies typically make numerous

stand-alone, non-strategic investments. Time-to-market may be fast, but non-integrated point solutions

have a short life. Finally, pre-integrated enterprises are at risk due to the inability to share information,

make intelligent decisions, or manage a customer portfolio to target low-risk customers with high payback.

The contrast between pre-integrated and fully integrated enterprise is illuminating. In the latter, the

company/customer relationship is symbiotic. Customers feel like an integral part of the enterprise. In

regard to ROI, EAI can leverage value-chain relationships, increase market share, form new alliances,

and create new customer channels. By investing in standards and strict controls, the EAI can shrink time-

to-market from months or years to Internet time. The organization benefits from an intelligent focus of its

IT assets so called a managed risk portfolio. These reasons compel to take an action that is more

strategic and also more efficient; the following steps portray one of the best strategies for an EAI solution:

There are two areas of approach, for a best breed EAI solution,

• Business Front Approach

• Technology Front Approach

Business Front Approach: The success of any business today depends on its ability to adapt to rapid change and fully embrace e-

business. To compete effectively, organizations must reduce cycle times and increase customer

satisfaction. This requires integrating and streamlining business processes across application,

departmental, and organizational boundaries. Systems integration is no longer a necessary, expensive

activity associated with implementing Enterprise Resource Planning (ERP) packages; it’s a requirement

for future survival.

The EAI market seems to both defy and demand a singular definition. It defies definition because the

market is shifting so quickly. New partnering and licensing agreements between vendors are announced

almost weekly. Entrenched in a high level of “competition,” vendors provide their technology to many of

their competitors through Original Equipment Manufacturer (OEM) agreements. The market also

demands a singular definition because, in the marketing literature, it sounds like all vendor solutions are

more or less equivalent. They’re not. Although all the vendors contend that they have complete EAI

solutions, their philosophies, product architecture, and underlying technology are distinctly different.

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Six EAI market segmentations are defined that address the integration problem at different levels are:

Platform Integration

Platform Integration provides connectivity among heterogeneous hardware, operating systems, and

application platforms.

Data integration

This Integration is of two categories (I) Database Gateways – such as Sybase DirectConnect, Information

Builders EDA SQL, and Oracle Open Gateways.

(ii) ETML Tools.

Component Integration

This method provides an integrated access to variety of relational and non-relational database sources

and also mainframe data, through a Hub and Spoke Architecture.

Application integration

This provides a framework of collection of technologies that together provide near real-time integration

also called as Straight through processing.

Process integration

It provides the highest level of abstraction and adaptability for an EAI solution. These solutions enable

business managers to define, monitor, and change business processes through a graphical modeling

interface.

Business-to-Business integration

B2B Integration takes EAI technology beyond the corporate walls and delivers the full promise of e-

business by integrating customers, suppliers and partners. Choose integration solutions based on open standards. The EAI market remains young. Many of the

technology innovators are start-ups. There’s a high level of competition, partnering, acquisitions, and

licensing among vendors. Solutions that support open and de facto market standards (such as MQSeries

messaging, XML, and Java) offer a higher level of flexibility and present less risk than those written in

proprietary or arcane programming environments.

Justify integration infrastructure investments with a Return on Opportunity (ROO). Although an investment

in infrastructure technology can ultimately contribute to competitive advantage by enabling organizations

to more rapidly implement business solutions, the immediate, bottom-line benefit may be difficult to

define. Due to initial infrastructure investment costs, organizations may not realize savings until they

pursue subsequent projects. While a Return on Investment (ROI) defines how much money a company

can save, an ROO can help define how much a company can potentially earn from the implementation of

a technology solution. Time to market is a key factor for most organizations. Some EAI solutions require

an investment in building an infrastructure, but the investment can potentially pay off — if it enables rapid

deployment of new business solutions.

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Technology Front: EAI, as currently understood, is a solution to the Enterprise Application Disintegration (EAD) problem

rather than the solution because, in many ways, EAI is an ad hoc, tactical, and temporary patch to a

fundamental cognitive issue of the partial foresight of system evolution.

EAI attempts to provide unanticipated new functionality to partially foresight legacy architectures without

having to incur the downtime, cost, and disruption of re- architecting and re-building currently useful

legacy functionality. Clearly, this approach is not tenable in the long-term. EAI will eventually, in pieces

over time, force a re-architecting and backward re-engineering of enterprise systems.

The following is one of the holistic approaches for taking up an EAI Solution in an Enterprise,

Step 1: Develop a Maturity Model.

Step 2: Envisage the ahead.

Step 3: Choose your options.

Step 4: Cross Reference Matrix.

Step 1: Develop a Maturity Model: Generally, there are four distinct levels of integration that peg most companies EAI Sophistication. So

positioning of the levels in the model can make you understand your organizations stack up level,

Level 1: Point-to-Point Integration.

Level 2: Structural Integration.

Level 3: Process Integration.

Level 4: External Integration.

Level 1: Point-to-Point Integration: This level involves establishing a basic data interchange infrastructure between applications, though

without any real business intelligence embedded in the infrastructure. Applications have migrated from

closed to open systems, wherein many software application functions are available through Application

Program Interfaces (APIs). Exchange of information between applications is usually automatic with little

manual re-entry. Further, systems are loosely coupled, permitting a degree of application independence.

Messaging-oriented Middleware (MOM) is often used to aid application distribution, scalability, and

improved accessibility of applications. However, business rules that govern dependencies between

applications still are generally custom-coded within the individual applications, with many point-to-point

interfaces.

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Level 2: Structural Integration: At this level, a company uses more advanced middleware tools to standardize and control information

exchange between applications. There are two major breakthroughs: (1) an architectural central hub or

bus, which controls information exchange, that has replaced the confusing array of point-to-point

application interfaces; and (2) diverse business rules governing data and transactions between

applications are now aggregated and consolidated at the middleware level. At this stage, organizations

are committed to an interface integration model encompassing a common data model with the future

potential to manage all applications.

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Level 3: Process Integration: At this level, organizations have achieved the transition from sharing information between applications to

actually managing information flow between applications. To make this happen, they’ve developed a

common business model that spans the enterprise. Further, sophisticated tools are used to implement the

business model in the middleware layer, supporting easy-to-use process modeling capabilities,

automated workflow functionality, and decision- support tools.

Level 4: External Integration:

At this level, companies are deemed true and Next Generation Enterprise, leveraging technology,

business process transformation, and new structures to redefine the organization — from the standpoint

of serving customers. These organizations use EAI technologies to transform the business, often directly

connecting both customers and suppliers to internal operations. These companies leverage new

capabilities to create innovative online offerings, new products and services, and can either improve an

existing brand name or create a whole new Internet brand identity. Integration at this level is so tight and

smooth between the company and its partners that customer needs drive enterprise and partner

behavior, in real-time. Concurrently, advanced technologies make it possible to manage and share

information assets. By leveraging its knowledge base, the company is fast, flexible, and responsive to

market dynamics.

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Step 2: Envisage the ahead: One of the first solutions encountered is a new set of tools called “middleware,” commercial “off-the-shelf”

software products specifically designed to bridge applications. These tools minimize the changes you

must make to applications systems. Moreover, middleware is becoming increasingly intelligent, allowing

more rapid deployment and even “plug-and-play” cutover of integrated solutions.

This sounds great, but putting middleware to work is no cakewalk. IT professionals must choose from a

confusing and rapidly expanding array of new vendors and products, as well as evolving products from

established providers.

Middleware tools cover the gamut from universal databases to message brokers, applications servers,

transaction processors, workflow servers, and Internet gateways, to name a few. The new breed of

message brokers, for example, represents a major breakthrough. Message brokers use a central hub for

collecting and distributing application information, allowing applications to communicate through a

“publish- and-subscribe” metaphor. When information arrives at the hub, it immediately becomes

available for other applications. However, confusion reigns when these tools collide with the world of

established techniques such as composite applications, data warehouses, and distributed object

development.

Assess what you have and what you need. Decide on the level of integration needed to support and

attain your business goals. An enterprise can enjoy long-term success at Level 2 or Level 3 — if that level

supports the company’s business model. If you want more, expect to spend more. To progress to a new

level, you can expect to commit to greater investment in robust architecture. For example, Level 2

requires a significantly more substantial upfront architectural process commitment than building a Level 1

point-to-point integration solution. The upside is that you experience significant positive impact on

business drivers such as risk, customer satisfaction, and ROI.

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EAI is additive. A successful integration strategy demands incremental enhancements in tools and

technology and simultaneous reengineering of business processes. As you move up the scale towards

becoming an integrated enterprise, new integration components add to those implemented at the

previous level. Everyone can benefit from EAI, but each experience is different.

New organizations building infrastructure and business processes based on the Internet — without legacy

systems — can move higher and faster than older companies with closed proprietary systems and

reengineering issues. On the other hand, older players have the benefit of vast data stores and

established supplier and customer relationships, which can be leveraged to climb the EAI ladder.

Step 3: Choose Your Options: There are five basic integration strategies. Choosing the right one for your organization depends on your

current applications and IT architecture. Application software consists of three architectural layers:

presentation, business logic, and the database.

In Tier 1 architectures — common in many legacy systems — everything is custom-coded and tightly

linked. If a change is required in one layer, it requires rebuilding all three layers.

Tier 2 architectures tie two of the layers together — both presentation and business logic (commonly

referred to as a fat client), or business logic and database (separating only the presentation layer is called

a thin client). This architecture benefits from yielding a new level of independence without the burden of

re-coding applications every time a change is made. For example, separating the presentation layer lets

you use different Graphical User Interfaces (GUIs) and screens or change a Web page without rewriting

the business logic.

Tier 3 architectures separate all three layers and provide the greatest independence. Alternately,

organizations can opt for n-tier, which breaks the business logic and database levels into more granular

distributed objects.

Application configuration in many ways determines which of the following strategies is open to you:

• Common User Interface Strategy:

The organization opts to tie together its applications at the presentation level by providing

a common user interface with minimal changes to the back-end. This approach,

commonly seen on the Internet, relies on the intelligence of the user to reconcile

differences between applications. Sometimes, users must perform double entry of the

same data because the back-end business logic and databases aren’t integrated. On the

plus side, the tools and techniques in this strategy are proven and mature. The downside

is that you’re relying on the user to perform the data and process integration. That’s

inefficient and error-prone.

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• Database Integration Strategy: The enterprise still maintains separate applications, but opts to use sophisticated

database manipulation tools to move data directly from one database to another. This

approach doesn’t require changes to the presentation or business logic layers, which can

save enormous costs when legacy systems are involved. The drawback is that this

technique could create bad data, since it is bypassing the business logic layer that

contains many of the rules for maintaining data integrity and consistency.

• Composite Application Strategy This involves a massive application, such as an ERP system from SAP, People Soft,

Baan or Oracle, or a distributed object system that provides the core set of functions for

the company. For example, a collection of SAP application modules might already be

performing 50 percent of a company’s processes, so they decide to make that the hub

and have everything else peripheral. All other applications — internal and external —

must conform to the SAP interface standards and serve the SAP database as the master.

ERP vendors aren’t standing still, either. They’re continuing to enhance their products to

provide more open interfaces and conform to new standards (such as XML) to maintain

this as a viable integration strategy in the Internet age.

• Multi Step Process Strategy This approach uses middleware, an additional layer of business rules, to integrate the

business logic layer in the application architecture model. The new layer describes how

the different applications interact and integrates the applications by managing events (or

transactions) in a controlled multi-step process. The multi-step process strategy shows

the most promise for driving true enterprise objectives, and is the basis for a wave of new

products in recent years such as message brokers, transaction monitors, integration

brokers, and process workflow engines. These tools generally use either hub-and-spoke

or bus architecture, or operating metaphors such as publish-and-subscribe, request/reply,

or file-and-forget.

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• Web Services Strategy.

Web Services provide a distributed computing technology for revealing the business

services of applications on the Internet or intranet using standard XML protocols and

formats. The use of standard XML protocols makes Web Services platform, language,

and vendor independent, and an ideal candidate for use in EAI solutions.

Web Services eliminate the interoperability issues of existing solutions, such as CORBA

and DCOM, by leveraging open Internet standards - Web Services Description Language

(WSDL - to describe), Universal Description, Discovery and Integration (UDDI - to

advertise and syndicate), Simple Object Access Protocol (SOAP - to communicate) and

Web Services Flow Language (WSFL - to define work flows, not yet a W3C standard).

Step 4: Cross Reference Matrix: All five strategies are valid. However, note that each works best only at specific levels of EAI maturity. So

it’s important to develop a cross-reference matrix between EAI maturity and integration strategies to

determine the approach that will work best for the enterprise.

Integration Strategies Application Integration Integration Challenge

User Interface Strategy

Database IntegrationStrategy

ApplicationIntegration Strategy

Multi Process Strategy

Web Services Strategy Maturity Levels

√

√ √

√ √ √

√ √ √ √

The database integration strategy works well at Levels 1 and 2, and, to some extent, Level 3, but falls

short when you try to convince outside partners and vendors to agree to your internal data definitions and

standards.

The composite application strategy is great, but not for Level 4 enterprises. It requires external partners

and vendors to agree to use the exact same applications to match yours.

√ √ √

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The common user-interface strategy can be made to work for Level 4, but it’s a short-term solution. It

requires your partners and vendors to log into your systems as well as the systems of their other partners,

which is not feasible (or tolerable), if you have dozens or hundreds of partners.

For the long-term, the multi-step process or middleware layer strategy is best. It conforms to Level 4

business goals, allowing internal and external players to agree on data content formatting standards

without placing draconian IT change-out requirements on your partners and vendors. Users can continue

to user their internal systems as they do today and B2B exchanges that need to occur do so transparently

and automatically with no manual intervention. Under this model, every function requiring human

interaction is done only once throughout the entire value chain of transactions. Once this level of

integration is achieved, productivity increases dramatically and the entire business process, both within

and across enterprises, occurs rapidly. But the payoff makes these initial hassles worthwhile, creating an

organization that’s fully ready for e-business success and able to adapt instantly to market changes.

Web Services strategy are not EAI in and of them. Rather, Web Services are just another technology that

enables EAI, and it can significantly change the traditional and strategic approaches.

The best-chosen EAI strategy should improve the business efficiency and business process. EAI acts like

a multi weight lubricant that can power your organization to new levels of performance regardless of

market terrain or how quickly the ground ahead of the enterprise changes.

Conclusion: It is impossible for every organization to predict what tomorrow new business integration requirements will

be is. The traditional approach has not met expectations. With the current economic pressures, now more

than ever, integration measures provide significant return on investment- typically within six months or

less. Automating business processes and implementing IT enabled work flow processes will help

corporation eliminate unnecessary personal costs, reduce errors due to manual activity and continually

refine the processes that are critical to maintaining a competitive edge. Enterprise Application is a

journey, not a destination. Higher business value can be realized as increasingly complex business

processes are automated, standardized, reused, and shared.

About the Author:

M. GaneshKumar is working as a Manager - Client Services at Rising Solutions Private Limited India. He is currently handling the client services management and also client delivery capabilities for the various projects at Rising. He has had a prior wide experience in working with leading banks in managing their delivery centers and also has a high degree of expertise in pre sales, business analysis and consultation to EAI Solutions for Corporate Sectors, Banks, Telecom Sectors, Engineering Sectors and Automobile industries all over the globe. He has worked with clients and project teams across different vertical to plan and implement complex IT business process and also on the realization of the business potential and the implications of emerging technologies with the customer. Voice: 91-44-42146099 Email: [email protected]

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