ENTERPRISE INTEGRATION STRATEGY Chapter 3 EXECUTIVE OVERVIEW FOR

ENTERPRISE INTEGRATION STRATEGY Chapter 3

EXECUTIVE OVERVIEW FOR ENTERPRISE INTEGRATION STRATEGY • Enterprise Integration does not come shrink wrapped. There is no one technology to improve efficiency and effectiveness of a business. Decisions need to be made • We cant just throw tech at it a hope it will stick. • A strategy must be formed on how everything will fit together. • This created strategy ultimately reduces the time and cost of managing information and IT costs.

EXECUTIVE OVERVIEW FOR ENTERPRISE INTEGRATION STRATEGY • Enterprise integration can be viewed as the evolution of computing. Remember first lecture? • As technology improves it unlocks the potential for business capabilities to expand. Customer Services, T+1 trading, etc…. • Enterprise integration is about laying the foundation for business agility. Reoccurring theme

EXECUTIVE OVERVIEW FOR ENTERPRISE INTEGRATION STRATEGY • The problem with enterprise integration is that it is complex. • Different types of projects require different types integration technologies. • EX. Creating a portal to allow employees to make changes to their own 401 k plan is different from integrating electronic transactions from customers and suppliers. • It is not possible to use a single technology to solve all problems. Reoccurring theme

WHY HAS ENTERPRISE WIDE INTEGRATION FAILED IN THE PAST? • Lack of standards – web services could enable a standard for successful enterprise integration. • The issue of dealing with proprietary technologies. Proprietary technologies are hard to configure, implement, and change. At one time custom was all the rage • Unfortunately standards alone does not guarantee success. • This is where creating an enterprise integration strategy comes into play. • An enterprise integration strategy will provide the guidance to the architectures and processes that are used to develop applications and systems.

HOW TO SUCCEED WITH AN INTEGRATION STRATEGY • Create a road map – a road map should outline a strategy to make enterprise integration efficient as possible. The road map should include the culture of the enterprise, current knowledge, processes, and architecture. Why theses items? • Create metrics for measuring the effectiveness of the strategy. – ROI and cost/benefit are some examples of metrics but it is important to have metrics that tie to business strategies and initiative specifications. • Minimize redundancy – redundancy is something no organizations shoots for but it does occur due to mergers, acquisitions, and legacy systems. There is also the issue of who has the knowledge and skills of the current elements. Yeah for old people!

HOW TO SUCCEED WITH AN INTEGRATION STRATEGY CONT… • Minimize required skill sets – (back to old people) having one person holding all the knowledge can be a issue. What do you do when they retire? People are an enterprises most expensive part of a system. To reduce cost and maximize investment in skills development, create defining technology standards. Discuss • Invest in reuse – not reusing resources can increase cost by 10% to 20%. Conversely, reusing resources can lower cost if done correctly by 50% to 80%. Culture and processes need to support reuse. Service oriented architecture (SOA) and process driven architectures are two integration strategies that maximize resources.

HOW TO SUCCEED WITH AN INTEGRATION STRATEGY CONT… • Revisit and revise as business strategies change. – making enterprise integration part of the normal way that business is conducted can be daunting. Why so? • At times it can go against the norm of the organization. This could lead to people not buying into the change. • These changes to the organization require people skills by management to lead and communicate the changes being made and how the people of the organization are part of the business change that will advance the organization.

GM STRATEGY IS A LEADERSHIP ISSUE • The previous best practices mentioned for enterprises integration strategy can be represented in a GM case study. • When Ralph Szygenda took over as CIO at GM he implemented an integration strategy that organized the staff, reduced redundant systems, and focused his skill set (Business strategy change) on reducing technology and vendors. This strategy was the opposite of what was currently in place at GM. • The new integration strategy resulted in a 70% reduction in current separate systems. The enterprise integration strategy also tied into the business strategy that was revised and revisited.

KEY ARCHITECTURAL BEST PRACTICES: SOA AND PROCESS DRIVEN INTEGRATION • SOA and process driven integration are key strategic integration directions currently considered to be best practices in integration strategy. • Web services, SOA, and process management allow enterprise strategy to be realized. • They provide an enterprise wide strategic approach to success.

SERVICE ORIENTED ARCHITECTURE • In SOA, business functions are packaged as reusable services that can be accessed through standard interfaces independent of platform or programing language. • Originally, SOA was difficult to build due no consistent component model. • This forced enterprises to choose one. EX. Java , J 2 EE • Because of competition, no one standard could be achieved. • Eventually, web services became the standard allowing for a standard interface (WSDL), a standardized communication protocol (SOAP), standard message format (XML), and standardize repository (UDDI). • These standards enable web services to reside anywhere and be accessed from everywhere.

SERVICE ORIENTED ARCHITECTURE • Web services can now be accessed through web browsers. • This enables businesses to create business services out of existing systems and rapidly implement new functionality. • Web services unleashes the full potential of SOA. • The biggest benefit of all of this is we now have a universally accepted application interface standard. • Warning: SOA is not a magic bullet, it is a corner stone of enterprise integration but it requires planning and hard work.

PROCESS DRIVEN INTEGRATION • Real time enterprises needs to respond rapidly to business change, opportunities, and threats. • To accelerate business processes, reduce inefficiencies, and provide real competitive advantages, companies need to optimize, automate, and manage end to end business processes. • In order to increase the speed of business processes, we need real time visibility into those processes. • Additionally, different people and departments need different levels of visibilities. • EX. Line of business managers require a business view while IT managers require a systems view.

PROCESS DRIVEN INTEGRATION • Providing different views of a process can be challenging. • A process can cross multiple units, applications, and even business entities. • EX. An order taken over the web will touch multiple back end systems such as customer management systems, inventory management system, product management systems, billing systems, and other external systems such as Fed. Ex. • Process driven integration provides end to end business process visibility and management. • Process driven integration is growing rapidly because of the direct value it brings to a business and not a technical connectivity solution.

BUSINESS PROCESS MANAGEMENT • Business process management solutions provide the following: • Process modeling capabilities for business analyst to define the business process • Process automation which enables process routing to be defined by events or content or other relevant business rules • Workflow for routing and managing manual tasks • Process monitoring and alerts when a process rule is violated • Some level of application integration either through web services, adapters, a full integration broker, or integration with another vendors broker • BPM can be a solution for managing the flow of information across the business.

HOW LONG SHOULD A STRATEGY TAKE? • Remember, enterprise integration does not end, it is constantly evolving. • It is an ongoing process that must remain aligned with business strategies. • Therefore, creating an enterprise integration strategy is not a one time event, it is an ongoing process as well. • This should help with avoiding analysis paralysis. Doesn’t have to be perfect • Creating a competency center will reduce the time it takes to create an integration strategy based on business strategy. What is a competency center? • A competency center is an organizational structure that has in depth expertise and is processed focused on a specific topic or operational need that can improve results. Anyone been part of one?

COMPETENCY CENTER • Competency centers are a centralized resource of skilled staff members that can provide possible technology options and promote best practices. • This group of people is best positioned to compare and contrast strategies and reduce the time it takes to implement. • The time it takes to create a integration strategy can vary. • Something that strongly effects the time it takes in integration strategy is stakeholder approval. • Could even stop the strategy all together. (lack of vision, unwillingness to change) What else?

BUSINESS INTEGRATION STRATEGY SPECIFICATION • The business integration strategy specification is the document that maps business requirements, strategies, and initiatives to integration strategies and projects. • The business integration strategy specification can be created enterprise wide or at the project level. • The following is a sample of what is on the business integration strategy specification

BUSINESS INTEGRATION STRATEGY SPECIFICATION • Introduction - provide short executive overview of specifications. • Should provide tie back to business strategy and initiative and how they will support each other. • Should also list constraints such as limitations of legacy systems. • Provide background on the integration and the major benefits. • After reading the introduction, readers should have an understanding of what, why, and how the integration strategy evolved.

BUSINESS INTEGRATION STRATEGY SPECIFICATION • Scope – the scope defines whether this strategy covers integration across the enterprise, a division, line of business, or any other scope. • The scope of the integration strategy is determined by the business initiatives defined in the business strategy. Link between IT and business • For maximum ROI and agility it is recommended that the scope is enterprise wide. Why? • However, it is understandable for unique situations such as a line of business initiative to proceed forward. EX. Data synchronization between two business lines. Any other examples?

BUSINESS INTEGRATION STRATEGY SPECIFICATION • Key Participants – this section identifies the key stakeholders of the plan including business managers and executives who contributed information and team members who created the strategy. Why is this important? • It is wise to leverage the competency center/ EA group • Companies that do not leverage these assets will likely have redundancy and higher costs. How come? • Important! Integration does not end with a document produced by a committee. It is an ongoing process that must always align and change with business strategies.

BUSINESS INTEGRATION STRATEGY SPECIFICATION • The process of creating an integration strategy is not a one time event. It is constantly evolving. Discuss • This evolution makes a centralized group very important as it requires heavy involvement. (not part time involvement) EA? Discuss • There are different approaches to revisit. • Some do strategy revisits, others have EA, whatever the approach, it is becoming a best practice to have a competency center. Do you see this value?

BUSINESS INTEGRATION STRATEGY SPECIFICATION • The competency center is responsible for defining the standards and the communication through out the company. • By centralizing these responsibilities of enterprise transformation companies have leveraged themselves to reduce costs, time, and designating a team with the complex responsibilities of mapping out integration. • Also in the key participants section an outline of the team who creates the strategy, implements the strategy, and approves the strategy should by identified.

BUSINESS INTEGRATION STRATEGY SPECIFICATION • Integration Strategies • This section identifies key possible strategies based on best practices, testing, and experience. • They can be in the form of a table. Example of strategies can be how to manage redundancy, and utilize reuse. • Why is strategy important? Proper fit • It is easy to agree on using a best practice but to use the best practice you will need a strategy to implement the best practice. Make sense?

BUSINESS INTEGRATION STRATEGY SPECIFICATION • Mapping to business strategies and Initiatives • The purpose of the business strategy is to link the needs of the business and the implementation by IT. The mapping section provides a map between business strategy and initiatives in the form of some type of matrix. • A typical map might list the priority, strategy, scope, integration strategy, and budget. • In the matrix, if any of the columns are blank, a discussion of the implications must take place. • EX. If the integration strategy is blank, there is no support of the business initiative.

BUSINESS INTEGRATION STRATEGY SPECIFICATION • Strategic Sourcing – This section describes the approach an organization uses to be most effective in acquiring any technology. • It should set the philosophy, constraints, and approach to sourcing. • The issues to be dealt with are: • Current use of technology • Preference sourcing approach – best of breed vs single vendor know the difference? • Strategic sourcing will provide insight on vendors and procurement process.

BUSINESS INTEGRATION STRATEGY SPECIFICATION • Standards – this section is possibly the most important section of the integration strategy. • Standards reduce costs and increase reusability and agility. • They prevent dependence on a specific vendor or technology. Don’t be forced to use, what does this mean? • Standards accomplish this because they are available to any vendor and can be used by any organization. (acceptance throughout the industry) • Standards allow products to be interchangeable. Not handcuffed to one vendor or technology

BUSINESS INTEGRATION STRATEGY SPECIFICATION • Standards either get too much attention or not enough. As a result, standards should include the following: • Standard communication protocols and technologies. This will prevent repeating the mistakes of the past. • Standard application interfaces. This allows for the acceptance of any vendor product. • Standard message formats. XML is fast becoming the standard. • Standard process models. A process standard will enable companies to retain and reuse business knowledge and share it. It also allows for optimization of business processes. • Metadata standards - this is the language the enterprises uses to read and understand the data collected.

BUSINESS INTEGRATION STRATEGY SPECIFICATION • Metrics – the time, effort, and cost of creating an integration strategy should deliver a high return on investment. • Metrics are used to track the success of the integration strategy. • The effort to collect and track a metric cannot exceed the value of the information it provides. Make sense? • Metrics include tracking reuse, the time need to implement new solutions, savings, reducing redundancy, and monitoring total cost of ownership.

BUSINESS INTEGRATION STRATEGY SPECIFICATION • Risks – this section defines anything that can go wrong. • This includes the organizational, cultural, technical, or management challenges. Give me examples • Conclusion – the goal of the integration strategy is to increase business agility and competitive advantage. • This requires a strategy that does more than simply react. • This approach defines a way to mitigate risks and accelerate tactical solutions while building enterprise agility.