Enterprise Application Integration

Although many IT professionals are just beginning to grasp the intricacies of middleware, the next-generation of the technology is already bursting onto the market. Get ready for enterprise application integration, or EAI.

Special Report: Middleware

Although many IT professionals are just beginning to grasp the intricacies of middleware, the next-generation of the technology is already bursting onto the market. Get ready for enterprise application integration, or EAI.

EAI products, tools, strategies and consultants promise to link disparate applications -- both packaged and homegrown -- across the enterprise to create new efficiencies and opportunities. EAI is not easy, quick or cheap, but proponents say the strategy can cut traditional application integration costs by 40 to 90 percent and measurably improve competitive advantage across the value chain.

For NT shops, EAI offers an opportunity to connect what were once departmental or line-of-business-based applications across the enterprise, explains Bill Reedy, vice president of transaction systems at IBM Corp. "Those NT applications have become fundamental parts of the business, but to get their full value, managers must allow them to reach out to other applications."

ProTeam.com (www.genesisdirect.com/bottom_main.html) has experienced this principle firsthand. The 4-year-old catalog company, which markets sports merchandise, children’s’ goods and gifts and collectibles, was formed and expanded by acquiring 21 companies and starting up 11 more internally, all within 21 months.

The IT architecture was built from the ground up, using best of breed applications on a variety of platforms, including NT. The design places 18 applications around a central EAI hub, all integrated through DataGate from Software Technologies Corp. (www.stc.com). The company’s EAI infrastructure now supports a $500 million business that processes as many as 30,000 orders and 1.75 million transactions per day.

"We would not have been able to accomplish the best of breed approach without a product like DataGate in the timeframes that we endeavored," says Dominic DiMascia, CIO of ProTeam.com.

ABCs of EAI

The definition of EAI, according to industry analyst firm Hurwitz Group (www.hurwitz.com), is the "integration of data and business events across applications." EAI replaces the costly and time-consuming point-to-point coding of integration connections between applications, a process that must be repeated with each new application, enhancement to existing applications or integration among applications.

EAI strategies typically achieve integration by creating a hub-and-spoke architecture. In simplistic terms, the EAI product sits at the center of the wheel, performing message translations and transports among the various applications at the ends of multiple spokes (see figure 1).

NT sites that want to integrate applications can create the "connector," often customized code, from the application to the hub EAI product. The EAI technology then handles the translation and transport to other applications, simplifying upgrades to existing applications and preserving the investment in each iteration of integration technology.

Even in this early stage of the market, some EAI vendors are offering prebuilt connectors to integrate popular packaged applications. These connectors plug into both the packaged application and the EAI hub product, creating a communications path between the two that require only minimal customization.

For sites integrating custom-developed applications, EAI can be more time-consuming and costly up front, but may offer greater benefits over the long term. Some EAI products help IT managers build an enterprise infrastructure, standardizing the integration scheme among legacy applications.

The potential benefits of EAI solutions are impressive. Hurwitz Group calculates that 30 percent of today’s corporate IT budgets are spent on systems integration, about $18 billion annually. Using EAI technologies to slice 40 to 90 percent from that annual cost could free substantial budgetary resources for other IT projects.

EAI can also offer what Hurwitz Group terms "return on opportunity," or ROO. While return on investment (ROI) defines how much money can be saved, ROO defines the potential for increased profits and market position, says Beth Gold-Bernstein, senior analyst at Hurwitz Group.

Business Drivers for EAI

The driving force behind the burgeoning EAI market is not just the possibility of savings, but a confluence of business and technology developments.

In the IT arena, the increasing reliance on prepackaged applications over the last 10 years has created an environment in which manually executed point-to-point integration solutions are impractical. "The total installed base of enterprise applications creates an integration challenge that is so large it can’t be ignored any more," explains Bart Foster, senior vice president of marketing and business development at EAI vendor Crossworlds Software Inc. (www.crossworlds.com).

Mergers and acquisitions, as well as regulation and deregulation, are creating irrepressible business changes that make rapid deployment of packaged solutions attractive. For example, the U.S. business community experienced 22,000 mergers last year. The first quarter of this year contained $840 million in asset changes.

In addition, a desire to extend the reach of business systems -- from inside a corporation’s four walls to its business partners and beyond -- is driving the EAI market. "The days of standalone systems are well behind us. Managers realize we must integrate systems and leverage them off one another," says Johnny Long, vice president of product strategy at MessageQuest Inc. (www.messagequest.com).

Building EAI

Because the EAI market is still developing, NT managers must come to the product selection process with a developed sense of corporate IT requirements. The most important strategic issue is whether to create an overall EAI architecture into which future application integration will fit, or to build a flexible infrastructure Lego-style -- adding integration technology on an as-needed basis.

Vendors that argue for comprehensive architecture say it provides the only method to address the business logic of the system, which guarantees efficient and complete integration over the long term. Proponents of the flexible, modular infrastructure say a complete overhaul of the architecture is costly and unnecessary since their method achieves the same integration in less time.

"It’s not enough just to put software into this," Crossworlds’ Foster says. "You must predict the common integration requirements and prebuild the system in a modular fashion. [This strategy] allows people to reuse the components over time," which provides the greatest savings, even if it takes longer to execute in the beginning.

"In a typical environment, we can put a solution in place that’s half the cost of custom coding," with the integration costs getting subsequently smaller with each new integration, Foster adds.

The idea of revamping the IT infrastructure, however, is unappealing to many. "It used to be the holy grail of most IT organizations and CIOs to strive for flexible information systems. But we’ve learned over the last 10 years that there is no such thing as a flexible information system. It takes too long to do adequately and by then, the business has changed too rapidly," says Pat Fortune, president and COO of Neon Software Corp. (www.neon.com).

In today’s business climate, "it is only practical to define a flexible architecture on which sensible information systems are built. You cannot define an entire architectural scheme all at once," he says. Instead, NT managers should look for EAI products that allow integration of applications one at a time.

Choosing a Solution

Buyers must beware of the pitfalls of selecting a vendor in a rapidly changing marketplace. As the demand for EAI solutions grows, the number of vendors will expand accordingly.

Select a vendor with experience and avoid startups or companies repositioning themselves as integration companies, says Jim Demetriades, CEO of Software Technologies. "Anyone can say they do integration. [To protect yourself] do a pilot and make sure it’s real technology," he says.

ProTeam.com began its integration process by carving out critical management systems first. Once each was integrated into the hub, additional applications were bolted on. Later, as additional companies merged into the organization, IT managers pushed their data to the DataGate hub and allowed it to populate the associated systems with external data.

Beyond the pilot, NT managers must ensure their EAI products can work in production environments. Many new EAI products offer no management functionality, and perhaps worse, no interface with existing management products, points out Steve Craggs, vice president of enterprise application integration at Candle Corp (www.candle.com). "You can write it yourself or find suppliers who will provide it. But you must ask suppliers the question," he says.

DiMascia of ProTeam.com confirms monitoring software can be hard to come by. Two years ago, none of the available products offered functionality robust enough to meet the company’s needs, so the IT staff developed its own interface monitoring system.

NT managers should also carefully evaluate the advice of well-meaning experts, warns Vytas Kisielius, vice president at Frontec AMT (www.frontec.com). For example, the extensive list of questions provided by consultant organizations is designed to make consultants the most important part of the decision making process. "Throw away that list," he says. "It’s the wrong place to start."

Instead, ask yourself questions specific to your situation: What business process are we automating? What role do I play? What are the work flows, the business processes and the systems affected? Who decides what process should look like? "Technology guys often embark on integration without knowing what the business process should look like or who owns it. It’s a prescription for disaster," Kisielius says.

Customization, Consultants, Cost

Another concern is the customization required to effectively execute EAI. The majority of integration projects include legacy systems, for which no pre-developed connectors are available. Where the applications are homegrown, the complexity is higher still.

"There is an emerging recognition that EAI is not as simple as brochureware makes it sound," IBM’s Reedy observes. "Truthfully, it’s more complicated than that. The fact that [vendors] have formats laid out doesn’t mean they have all the integration and processes worked out."

Nearly all EAI implementations require some custom-developed code to automate the business processes that drive the applications. Experts say evaluating and, when necessary, re-engineering these processes is critical to the success of the EAI implementation.

"You can’t think you just need to connect one application to another," Kisielius says. "If you don’t think about the whole business process you want to automate, you can easily end up with just another point solution."

The need for customization may create a corollary requirement for consultant expertise since few NT shops have EAI knowledge available in-house. Yet NT managers want to gain the benefit of hired expertise without having a corps of consultants camped out for months or years.

When properly used, however, consultants can help NT managers define the scope of the project, lay out tasks, and perform the knowledge transfer that will keep a consulting assignment from extending unnecessarily.

In recognition of the ongoing need for EAI expertise, some organizations are beginning to assign responsibility for these issues to an "enterprise architect," says Judith Hurwitz, president and CEO of Hurwitz Group. "These companies recognize that you can’t solve the problem just once," and assigning someone the responsibility for strategic IT development can be a worthwhile investment.

Customization and consulting can escalate the cost of an EAI solution. As with ERP projects, some EAI implementations have license-to-services ratios of 1-to-5 or more. "People feel the consulting portion has gotten out of control," confirms John Fomook, vice president of marketing at SmartDB Corp. (www.smartdb.com). As a result, many vendors are striving to bring non-license costs down closer to a 1-1 ratio.

If the experts are correct, the cost of carefully implemented EAI strategies is worth the price when the overall development and integration savings are considered. "The cost [of enterprise integration] is the cost to the business, not just to the IT budget. It’s a survival issue for companies to understand," says Paul Rampel, CEO of StarQuest Software Inc. (www.starquest.com).

Compared with platform-to-platform integration, the cost is reasonable. The traditional price of developing a Unix-to-mainframe connection ranges from $50,000 to $200,000, estimates Joe Menard, vice president of marketing at BEA Systems Inc. (www.beasys.com). EAI products have a similar price range, but also offer data transformation. "It’s not all that expensive, considering the problems that EAI solves," he says.

For ProTeam.com, the true benefit came in time to deliver its products to market. DiMascia estimates integrating the systems directly or developing middleware in-house would have taken two to three years, using five developers. Instead, the company spent about $400,000 for the DataGate product, its hardware and custom code for COM clients. In a $7.5 million IT system that has generated nearly half a billion dollars in revenue, the expenditure seems like a good deal.

Hurwitz Group Recommendations for EAI Implementation

  • Align business and IT
  • Define business drivers, ROO and ROI
  • Define strategic goals and tactical requirements
  • Take a tactical approach to build your strategic infrastructure
  • Hurwitz Group's five reasons for the growing popularity of EAI

    • Integration of ERP systems
    • Value chain integration
    • Mergers and acquisitions
    • Business process re-engineering
    • E-business.