B2B's Tower of Babel
New breed of middleware, composite apps take aim at business process integration
By Rob Spiegel, contributing editor -- Manufacturing Business Technology, 4/1/2003 7:00:00 AM
Like many manufacturers that have consolidated around a core enterprise system, San Antonio, Texas-based Tesoro Petroleum made some progress, but still had too much complexity on its hands. For one thing, the company wanted to simplify getting data into its enterprise resources planning (ERP) system.
To enter an order properly, an employee needed to navigate through as many as 15 screens. Data-entry errors were common, while inaccurate entries led to erroneous inventory records that resulted in false out-of-stock messages.
But the real problem wasn't the ERP system itself—from Walldorf, Germany-based SAP. In fact, Mark Evans, vice president of information technology (IT) at Tesoro, says that after merger & acquisition activity, the move to SAP brought benefits by establishing a single standard ERP system. Rather, Tesoro needed to streamline data input into this core system, and facilitate the flow of information for key business processes. Some call this business process management, or BPM, but viewed broadly, it's the continuing and vexing problem of integration.
According to Evans, one specific problem was getting unstructured data such as forms into the SAP solution, using workflow and a simple user interface. "We needed to automate how this kind of information gets into SAP," says Evans. "We needed process integration, not systems integration."
Middleware reborn
Stamford, Conn.-based analyst firm Gartner estimates that at least 80 percent of large manufacturers face integration challenges. Companies have added customer relationship management (CRM), supplier management, warehouse management, and a host of other solutions to their application environments over the last several years. Most large manufacturers also have experienced mergers and acquisitions, resulting in multiple ERP systems. It adds up to a B2B Tower of Babel when trying to communicate across systems to support business processes.
The emerging solution approach relies on a new breed of middleware that combines technologies such as portals, BPM software, and an application architecture that makes use of application servers. While much of this technology seems complex, and indeed can be, the idea behind this middleware is that there needs to be some business process logic in the connections between systems, as a well as a simple user interface.
The new middleware is intended to make it as easy as possible to draw data from existing systems, and gain quick, measurable return-on-investment (ROI). Additionally, some vendors are using middleware technologies as the underpinnings for what are being called "composite" applications, which leverage information from multiple systems while adding extra logic and workflow to carry out a business process.
Many types of vendors are competing in this evolving middleware space. Enterprise application integration (EAI) software suppliers such as Fairfax, Va.-based webmethods are adding BPM capabilities. Computing giant IBM, Armonk, N.Y., and San Jose, Calif.-based BEA Systems have the leading application servers. ERP vendors also are getting into the act. For instance, SAP recently announced NetWeaver, a middleware technology stack that, among other things, supports xApps, SAP's composite applications.
Tesoro used a BPM solution from Addison, Texas-based Fuego to simplify the issues related to its ERP system. "We used Fuego middleware as a business process designer that allowed us to create a workflow script," says Evans.
Central to the Fuego solution is Orchestration Engine, an engine and integration utility that simplifies the communication between data, systems, and people. "This is process integration," says Evans of Fuego's overall capability.
When Evans looked at EAI packages two years ago, he found they didn't have the people-friendly interfaces he sought. "It was more peer-to-peer data integration back then. We were looking for something that moved the way people work, rather than system-to-system."
Tesoro began its integration before most of the new middleware products hit the market. "We gave [Tesoro] something conceptually different from the EAI vendors," says Gordon Sellers, a Fuego vice president. "We looked at the business process first, determined what they wanted to do, and then we built the connectivity. We only connected what really needed to be connected."
This approach sped up attainment of the BPM project's goals. "The first project was about six to eight weeks," notes Evans. "It took about four weeks of infrastructure work. The whole intention was to remove people from the perceived complexity of SAP and put them on a Web page."
New integration era
Of course, major ERP vendors aren't about to cede the latest integration advances to specialty vendors. Over the years, ERP vendors have evolved into providers of more loosely coupled enterprise suites, and that has changed their outlook on integration.
"SAP broke its products into small pieces that are more manageable, flexible, and easier to update," says Bob Mick, a vice president at Dedham, Mass.-based analyst firm ARC Advisory Group. "It had to develop good integration to support those [extended] products."
SAP, for instance, now offers its own application server. Redwood Shores, Calif.-based Oracle also offers application server technology, while most other major enterprise suite vendors use application servers from IBM or BEA. An application server sits between back-end systems and Web-based systems, acting as a traffic cop and integration engine for what's called an "n-tier" architecture.
Yet application servers aren't the end-all in this new era of integration solutions and composite applications. "The new breed of application integration comprises three elements: the portal, the integration of existing systems, and the wrapping of middleware components into a single integrated design environment," says Jeff Flammer, director of solutions marketing, manufacturing, and retails industries, for BEA Systems.
According to Flammer, Tokyo-based PC manufacturer Toshiba Corp. used BEA's application server to quickly build portal-based e-commerce systems for both its dealer and direct sales channels. The dealer system provided order management, but the direct channel needed additional features, including asset tracking via asset tags, as well as customer access to service reports.
"Toshiba developed the portal in 16 weeks and got almost instant ROI," says Flammer. "It's a perfect model for success. Once you take on the chunk, you can reuse a lot of the work. Going from the dealer portal to the customer portal only cost 10 percent [as much as the first project] because it's a reusable and open platform."
For SAP, NetWeaver encompasses more than traditional middleware. "It's middleware in an extended sense," says Peter Graf, vice president of market strategy at SAP. "It integrates people. It includes business intelligence services to help you map your data. It integrates with both SAP- and non-SAP systems."
Graf also says NetWeaver is more than simply messaging and portals, though it includes both. "It's preconfigured technology, preloaded with applications, business intelligence, and business process templates," he says.
NetWeaver and composite applications allow companies to use their systems in new ways, Graf says. "We bring to life new processes that were not possible before: resource counts, automated post-merger integration, budgets, project planning," he says. "We address it from an applications perspective. These applications sit on top of existing applications, such as product life-cycle management, human resources, projects systems, calendar systems, or communications systems."
The overriding distinction between the new breed of middleware and previous EAI offerings is that business processes are the guiding principle for what gets connected, and how the connections operate. "About two years ago, integration became more important as companies started to bring on supply chains and value chains," says ARC's Mick. "At that point, integration suppliers started repositioning products as business process management."
According to Mick, ultimately a company is running business processes when it moves information back and forth between applications. "The new middleware is a result of applications technology applied to integration," notes Mick.
Who shall rule?
Some say enterprise suite vendors have entered the middleware market as an answer to customer demand, while others say they're pushing for a new market. Still others insist it's not a lucrative market for enterprise suite vendors, but it enables them to more easily sell extended applications such as CRM.
Paola Lubet, a vice president for the AppConnect integration products from Pleasanton, Calif.-based enterprise suite vendor PeopleSoft, contends integration technologies are crucial to streamlining commerce and collaboration among trading partners, and as such, are a natural area for PeopleSoft to address. Says Lubet, "If everything is in line, a supplier can enter inventory information, and a salesperson has access to the sales information as well as the credit information on customers."
Kimberly Knickle, an analyst at Boston-based AMR Research, concurs it's necessary for enterprise suite vendors to have effective integration tools. "We think every application vendor should have an integration strategy. If the application vendor has product capability, great. If it just has open interfaces, fine. We just want vendors to present [integration] options to their customers."
Which vendor gets the integration work depends somewhat on the complexity of the project. "We did a poll based on the number of applications a company was integrating," says Knickle. "When there were 20 or more applications, 20 percent used an integration vendor and 7 percent used an application vendor. When it was three or less applications to be integrated, 10 percent used an integration vendor and 24 percent used an application vendor."
Jess Thompson, a research director at Gartner, says that at the end of the day, initiatives such as SAP's NetWeaver amount to "both a market opportunity and an answer to customer requests."
| Who's inside | ||
| Fuego: www.fuego.com | IBM: www.ibm.com | Oracle Corp.: www.oracle.com |
| PeopleSoft: www.peoplesoft.com | SAP: www.sap.com | Sun Microsystems: www.sun.com |
| webmethods: www.webmethods.com | ||
