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Application Integration for Midmarket Companies

Technology leaders of fast growing companies face a really complex problem - how to integrate their key applications in a way that keeps risks low, costs down and schedules short.

Companies on a growth path don't have the IT resources they need, nor do they have the financial slack to invest in expensive and complicated software-based integration tools. Nevertheless, they must integrate their core applications in order to gain the most value for their business.

Application integration projects will increase in both scope and number. This trend is especially challenging for midsized companies.

This article examines the application integration trends for midsized businesses, companies with less than $3 billion in revenue. Technology leaders in these companies have only a few integration approaches to choose from: create custom code, wrestle with sophisticated EAI tools or use an appliance dedicated to integration.

These three integration choices are analyzed - so that managers can more knowledgeably select the best approach. Appliances stand out as the best alternative for the bulk of integration projects - they simply cost less, are easy to use and involve less risk than the other approaches.

IT managers can typically save 40 to 80 percent in total cost of ownership (TCO) over the other options, and delivery is measured in days, rather than months.

Because the integration challenges faced by large companies differs somewhat from those of midsized businesses, larger companies may use appliances for their many point-to-point integration projects or to quickly and easily integrate applications with existing EAI platforms. However, technology managers of Fortune 500 companies will still find value in the lessons learned here because integration appliances work well in any size business.

Growing Need for Integration

In the past few years, enterprise software providers have turned their sights to midsized companies. Companies such as SAP, Oracle, Salesforce.com and RightNow have created versions for midsized businesses and are currently seeing strong growth in the adoption of these systems.

There will be demand for enterprise resource planning (ERP) and customer relationship management (CRM) solutions as midsized businesses aim to get the same operational and analytical benefits as the larger companies have enjoyed. In addition, on-demand or software as a service solutions, such as those offered by Salesforce.com are gaining traction among midsized businesses.

This trend will likely help midsized businesses gain important abilities, but there remains one huge problem - the benefits of enterprise applications can only be realized when those applications are fully integrated. Two (or more) applications must be able to share data and business rules seamlessly, in real time, with reliable performance and scalability. For example, a field sales representative can learn that the customer he's been spending time selling to has not paid his bills and is on credit hold in the billing system. Or, manufacturing and materials management groups can gain early visibility of a coming downstream surge in orders and use this information to adjust production schedules.

Integration is a top priority for companies. Companies that can integrate their applications are going a long way toward improving their business processes, because most processes cross functional lines naturally.

The overwhelming majority of application integration needs in midsized businesses are straightforward: move data from one application to another, in real time, according to set business rules. Some especially messy integration problems will always exist, and these problems will require the use of sophisticated and custom tools. However, most integration projects are relatively simple. Does it make sense, then, to invest in a NASCAR effort when a Camry will do?

Probably not. More likely is that technical managers want a technology that takes care of the vast number of straightforward integration projects in a quick, simple and cost-effective manner. A technology that completes integration in days, rather than months, will quickly give businesses the full benefit of an integrated enterprise.

Application Integration - Three Choices

There are three ways to integrate applications. First, through enterprise application integration (EAI) tools; second, through custom coding; the third is through integration appliances, which are relatively new to the market, and - for many midsized businesses - have already overcome the challenges and barriers of the first two approaches. Let's look at each.

EAI and ETL Tools - Like Using a Chainsaw to Open a Letter

EAI tools were designed to create elaborate frameworks for integrating dozens to hundreds of applications. Companies have found they are good approaches to addressing complex business process initiatives such as business process management (BPM), business activity monitoring (BAM) and an enterprise backbone. extract, transform, and load (ETL) tools support massive volume transactions and very complex data manipulations, such as you might find in big data warehousing solutions. Both of these approaches require heavy lifting by many skilled programmers, long delivery times and high budgets.

Interestingly, most integration projects do not have the characteristics described above. Most midsized businesses are not implementing huge data warehouses, nor do they need to integrate the hundreds of standalone applications for which EAI was designed. Most midsized businesses need to integrate fewer than 10 applications. Using EAI tools for these kinds of integrations is like using a chainsaw to open a letter: too much overhead and time required for the task, which prevents positive payback.

Custom Coding - Complicated, When You Need Simple

The default for any company facing an integration project among critical applications is to write the data transformation and workflow mapping code from scratch using Java-based languages, ABAP or some other scripting language. However, writing custom code creates at least five serious problems for IT managers.

  1. Monopolizes specialist skills. By writing custom code for straightforward application integration projects, midsized businesses must commit their few programmers, and therefore lose the ability to create new value-added applications and functions that will support their core business.
  2. Custom code is not reusable. Integration code usually cannot be reused because variables and calls are idiosyncratic to the underlying project.
  3. Custom code does not provide visibility into integration transactions. Custom coding tends to focus on data transformation and workflow mapping, rather than on important integration monitoring features. Without such monitoring capability, managers are left in the dark about why certain orchestrations or data fail to get properly executed, nor are they warned ahead of time about such integration failures.
  4. Custom code is rarely scalable and flexible; it's "brittle." Integration code that is written for a specific one-off purpose is very difficult to scale up as the business grows because program designs do not typically account for future changes.
  5. Custom code is expensive. Most midsized businesses do not have adequate testing and version control systems in place, which leads to expensive maintenance later on.

For most midsized businesses, the custom-coding approach creates problems that are difficult to manage.

Integration Appliances - A Simple, Reliable Approach for Integration

An IT appliance, in general, performs a specific function, with all of the required programming installed on a standalone, self-contained hardware platform. The device is called an "appliance" because it has the same self-contained/dedicated function characteristic as most household appliances. They look like any other rack-mounted box - but dedicated to one important task. IT appliances successfully perform common functions such as encryption, firewall, VPN, network attached storage, VOIP, etc.

Appliances dedicated to application integration - such as the Cast Iron Integration Appliance - are relatively new on the market, yet have already proven to be an excellent solution to common application integration projects.

The Business Value of Integration Appliances

Technical managers who use appliances for their integration projects report four major business benefits, when compared to custom coding or EAI tools.

1. Fast delivery. Implementation is measured in days, not months as with custom coding and EAI approaches. A typical midsized business integration project takes less than 30 days. One SAP to Salesforce.com project using an appliance approach took just 15 days. An Oracle ERP to NetSuite project took just 14 days.

2. Low TCO. Appliances tend to be impressively cost-effective. Vendors offer subscription rates, which - combined with short and simple implementation cycles - leads to TCO savings of up to 80 percent over custom-coding and EAI approaches. In a sample of 10 integration projects using the appliance approach, customers saved between 40 percent and 80 percent in TCO over custom coding. These are the numbers you should expect from an appliance approach.

3. No programming skills. With appliances, midsized businesses aiming to integrate their applications have no need for skilled programmers or programmer management. All the required programming comes as part of the appliance. Companies can then direct their scarce programmers to other projects that add value to the core business.

4. Simpler operations. Appliances typically come with complete on-board diagnostics and monitoring, enabling remote management from a Web interface. If a problem does occur, local staff can simply swap out the appliance with another one - without losing any data, configurations or availability.

Technical managers have plenty of problems for which there really are only complicated solutions. However, they should know that there is one class of problems for which a reliable and simple solution does exist.

An Integration Appliance is a Simple, Fast, Low-Cost Solution for Integration

Simplicity means many things to different people. For technical managers, it should mean a solution with fewer "moving parts," fewer potential problems and risks, and less dependency on scarce skilled staff. Relative to custom coding and EAI, an integration appliance should provide these kinds of simplicity.

One device: An appliance should come as a completely self-contained box with all the hardware, connection ports, operating system software, dedicated integration authoring and integration management applications included.

No coding: Visual tools should be used to map data among preloaded database files and fields, and to create the work flows and rules you need. Think of the "programming" you do with an iPod and iTunes, drag and drop, and you'll get a sense of how you should go about setting up your integration.

No recoding: When business needs change, and you add data elements or modify business rules, you should be able to make a few changes using the visual tools and get the system back into production quickly.

One console: Monitoring, predicting and troubleshooting integration errors should be supported with an integration management feature and user interface, which should provide all the information you need to ensure proper real-time integration.

Here's How It Works

To many technical managers, this may all seem like magic in a box, and you might be more than a little suspicious. Let's look inside the box to see the reality.

A good integration appliance is a wholly contained device dedicated to one function: application integration. Its designers must have deep experience in application integration across a variety of vendors, including software, hardware as well as network and data management because the user will not develop any of these integration parts. Good appliance design can only come from a very intimate understanding of the nuances of application connectivity, transformation, workflow and integration management.

Reliable integration appliances require four simple steps to complete integrations. A best-in-class integration appliance must provide four simple steps for integration and come certified by the original software provider.

Connectivity: An integration appliance must provide reliable, out-of-the-box connectivity among all major applications, databases, files, Web services and XML.

Transformation: An integration appliance must provide easy transformation capability to map and transform the source application's data model with some target application's data model. To make this work, a best-in-class appliance will come preloaded with both applications' data objects and interfaces. No typing or coding is required, just a graphical interface for drag-and-drop operations.

Workflow: An appliance must also enable the rapid creation of workflows that will govern the integration process and define business rules - with no programming or programmer involvement.

Management: An appliance should provide management with the ability to monitor all real-time integration activity, deal easily with exceptions and provide proactive support in forecasting problems.

Any integration appliance must provide these four processes. To remain true to the appliance model, all of these processes should come preloaded and ready to use with no additional investment in hardware, software or staff. In addition, an integration appliance dedicated to a particular provider's software ought to be certified by that provider, to ensure high integration reliability and quality.

Application interfaces come preinstalled on the integration appliance and connect to a wide variety of applications and integration standards.

Technical leaders in midsized businesses must figure out a way to integrate their key applications in order to increase the value of their current systems and in order to handle future growth in new applications. Common approaches such as EAI or custom code are fine for huge, complex integrations in large companies with the time and resources to integrate hundreds of applications.

However, they are too costly, too risky and too slow for midsized businesses. Midsized businesses need a simple, fast and low-cost approach for the straightforward kinds of integration projects they typically have. Integration appliances, while relatively new on the market, have already proven in many companies that they are an excellent solution for these kinds of integration projects. It is clear that most midsized businesses will adopt integration appliances as one of their preferred approaches to integrating applications.


Dr. David Meader tracks and writes about emerging business technologies. He received his Ph.D. in MIS, his M.A. in Organizational Psychology, and his B.S. in Computer Science from the University of Michigan. He received his M.B.A. from the University of North Carolina - Chapel Hill. Dr. Meader was also on the faculty at the University of Arizona's MIS program in the Eller College of Management for 12 years and currently teaches in the MIS program at San Jose State University.

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