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Advanced
How To Guides
Systems Integration
The Business Case For Integration
Making a business case for information integration seems
simple - there are well documented costs of workers
and customers having the wrong information, incomplete
information, too much information, or simply out-of-date
information. Recent studies examined the costs of workers
who spend time searching for information as opposed
to actually using it productively:
- Management
and staff spend 15% to 25% of their time - up to
10 hours per week - searching for information.
- Staff
spend more time re-creating existing information
than they do creating new works
-
Roughly 50% of Web searches are abandoned due to
user frustration stemming from an inability to find
what they want.
- Management
and staff in a typical enterprise can each waste
up to €3,000 per year searching for information
that doesn't exist, re-creating information that
can't be found, or failing to find existing information.
Case
Study example
There are often other compelling business reasons for
considering an integration project - C&D
Foods, the Co. Longford-based pet food manufacturer,
wanted to address the problem of an ageing, back-office
system that did not lend itself to an easy upgrade to
e-enable their business. They were looking to move to
a relational database environment. Coincidentally, their
existing system vendors were moving their software on
to a new windows-based software platform and would be
withdrawing support for the original platform with in
two to three years. The original mini-Enterprise Resource
Planning system was developed in 1988 when the business
had an annual turnover of less than £ 12.7 million.
Whilst the system had been upgraded over this period
in order to evolve with the business, it was felt that
after 12 years a new system was required in order to
web-enable the business and capture the required efficiencies.
Secondly, the retail multiples in the UK had become
world leaders in the development of business-to-business
(B2B) eBusiness applications. Suppliers were expected
to interface their systems with those of their customers
to enable the exchange of business documentation and
collaborative planning. There was a real danger of C&D
Foods being left behind as the use of Internet technology
became the norm in B2B trading with the retail multiples.
Thirdly, the fact that their closest competitors were
multi-billion pound companies like Pedigree/ Mars and
Nestle meant they were under significant competitive
pressure. By making careful investments in the right
people and web-enabled IT, they would be able to compete
on an equal footing with these giants.
Finally, the highly competitive nature of the retail
market in the UK was placing ever-increasing pressure
on margins for suppliers. In order to maintain margin
it was vital to engineer a low-cost operation. The company
planned to web-enable back-office systems in order to
drive efficiencies and help maintain a low cost operation.
Business
integration - the measure of success
Application integration is most often approached
as a technical issue - a necessary step in implementing
new business solutions that connect with back office
systems as well as suppliers and partners. As organisations
begin to adopt best practices for succeeding in today's
interconnected online business environment, it is becoming
increasingly important to understand that business integration
lies at the heart of business success. Business groups
within organisations are rethinking how they interact
with customers, partners and suppliers, manufacture
goods, operate, organise, and manage the business. Business
and IT success are dependent upon integration solutions
to enable this business change. In the same way that
organisations have mastered technology innovations from
mainframes to the Internet , it will be an imperative
to become masters of business integration.
The return on investment can be significant in reducing
operational costs, increasing revenue and improving
customer satisfaction. Companies have achieved 100%
ROI from error reduction alone.
Unlike an investment in Government bonds, an IT investment
does not have an ROI that can be accurately determined
up front. However, it can, and absolutely should be
calculated up front. If you are a CFO and it doesn't
exactly turn out the way the numbers said it would,
don't be surprised. Because of all the factors that
can impact the timeline and budget of a project, the
return you will realise may not be as high as expected,
or it may take longer to realise it.
Business integration success therefore must be measured
in business terms - in how the solution enables the
business to implement new solutions faster, react quickly
to business changes, reduce operational costs, and improve
efficiency. Successful business integration requires
business and IT working together to create the real-time
enterprise. Business integration does not come in a
box. There are numerous solutions involving different
types of technology on the market from a variety of
vendors. The way companies approach business integration
can mean the difference between long term success and
a significant return on investment, and failure to realise
any long-term benefits from investing in integration
solutions. So far, the track record of enterprise integration
is abysmal. But that is not because the technology doesn't
work. It's due to how it's being implemented.
Produced by Charles Sargent, Handiworks Ltd.
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