Making the right connections
Be wary of application vendors touting "open" integration platforms
By Sidney Hill, Jr., executive editor -- Manufacturing Business Technology, 9/1/2003 12:00:00 AM
On its way to completing the biggest merger in high-tech history—the $19-billion acquisition of Compaq Computer—Hewlett-Packard (HP) consolidated its information systems.
As much as possible, HP wants business functions performed on a single system delivered by a single vendor. This promotes consistency in the way functions are performed across the enterprise, according to Mike Overly, who as vice president of marketing is overseeing the consolidation of HP's CRM applications.
The single-vendor approach also minimizes the need for large-scale system integration projects, but it does not eliminate it. In fact, manufacturers both large and small are learning that the need to integrate systems is a fact of contemporary business life.
The big question for most manufacturers these days is not whether to integrate systems, but how to do it most efficiently and cost-effectively. Overly says HP's strategy for deploying and integrating its CRM systems has resulted in a combination of "IT enhancements and business process improvements" that have yielded cost savings totaling "tens of millions of dollars."
Companies essentially have three choices when it comes to devising an enterprise application integration, or EAI, strategy:
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They can build their own interfaces for linking disparate enterprise applications;
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They can purchase an integration platform from an independent EAI vendor and use it as a foundation for connecting systems; or
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They can use the integration tools that come with the specific applications they need to connect.
Several ERP vendors, whose systems typically form the core of a manufacturer's technology infrastructure, claim to have made the third choice more viable by introducing their own "open" integration platforms. For instance, PeopleSoft, Pleasanton, Calif., has an integration platform called AppConnect; and SAP, Walldorf, Germany, has introduced an integration platform called NetWeaver.
Both vendors contend their platforms can play either a lead or a supporting role in a manufacturer's EAI strategy. In a lead role, the ERP vendor's platform would substitute for an independent EAI vendor's product. In a supporting role, the ERP vendor would offer connections between its platform and the EAI vendor's product. The list of independent EAI vendors includes TIBCO Software, Palo Alto, Calif.; webMethods, Fairfax, Va.; SeeBeyond, Monrovia, Calif.; and IBM, Armonk, N.Y.
Dual-use platforms
PeopleSoft and SAP executives say they developed their respective integration platforms so that companies could add or upgrade individual applications—either from them or other vendors—without also having to replace any other systems that a new application might need to communicate with. Therefore, they say, it doesn't matter whether customers use AppConnect or NetWeaver to replace or complement an independent EAI platform.
"Our customers can still look at what are considered best-of-breed integration platforms, or they can just use NetWeaver," says Ori Inbar, head of marketing for the SAP integration platform. "The main goal is helping customers leverage their existing technology investments."
Says David Sayad, a PeopleSoft senior technology product manager, "This is all about giving customers choice. We wanted to make it easier for customers to connect into and out of PeopleSoft applications. If you have an existing EAI architecture, we can blend AppConnect into that environment. If a company is starting its integration strategy from scratch, it can use AppConnect as the foundation. The advantage to that is we don't charge for our integration tools; they are bundled with the regular set of PeopleSoft development tools."
It's no surprise that the EAI vendors question the ERP suppliers' motives for developing these platforms. "One of the main reasons for having an EAI platform is to enable the use of best-in-class applications," says Glenn MacKenzie, director of industry solutions for webMethods. "That is a conflict of interest for an ERP supplier."
Chris Horne, senior product manager for SeeBeyond, argues that the natural tendency for any application supplier is to "only develop and support technologies that collaborate well with their own software development environments. They are not going to provide support for integrating into legacy technologies, and they are not going to do a particularly good job of developing tools that work with other vendors' applications."
Eric Austvold, a research director with Boston-based AMR Research, says there is validity to this argument. "NetWeaver is a lot more open than SAP's previous set of application interfaces," he says. "But SAP's perspective on openness still is limited to how easy it is for other applications to talk with SAP. Only SAP customers can use NetWeaver; you cannot use it to connect two non-SAP applications, which is what we would expect from an open platform."
Austvold says AppConnect contains a great set of tools for building application interfaces, but those interfaces "still work best within the PeopleSoft technology framework."
Integration methods
Historically, application vendors have used software programs known as adapters to facilitate integration with their systems. In most cases, an adapter creates a connection to a specific function within an application, such as a pricing algorithm that might need to be tapped by a sell-side e-commerce system. Adapters can be reused, but a single business process, such as processing a customer's order over the Internet, could require the use of multiple adapters, all of which have to be maintained as processes and systems change over time.
That is why EAI vendors are adopting newer technologies such as integration brokers, XML, and Web services. Integration brokers are communications hubs that route messages to and from various applications on a network. The sending application issues messages in its own native format, and the hub translates them into a format that will be acceptable to the receiving application. A message passed by an integration broker also can contain business rules that dictate when and how specific applications should respond to the message. For instance, a Web-based order processing system can instruct a pricing application to calculate prices differently for certain customers.
The XML messaging format, which is used to create electronic versions of documents such as purchase orders and invoices, is becoming a popular method of forging links between systems in separate companies. Web services, which also can use the XML messaging format, take this form of system integration to a higher level by allowing users to wrap instructions for multiple applications inside a single message.
When an application opens a Web services wrapper, it sees only the instructions that it is supposed to act on. Messages and instructions that might apply to other applications remain hidden. This characteristic makes Web services even more reusable than application adapters.
The promise of Web services
Teleplan of North America, a subsidiary of a Dutch company that performs warranty repair services for major PC and consumer electronics manufacturers, is counting on XML Web services to eliminate the programming that is required to connect its customers to its ERP system. Teleplan's ERP system is the IFS Applications suite from Chicago-based IFS.
"Our integration is to our customers' CRM systems," says Michael Reisenweber, Teleplan's applications manager. "Every time we add a new customer, we have to build a new interface to hook our system to theirs."
Those interfaces allow Teleplan's customers to send orders from their call-center applications directly to the order management component of the IFS suite. When the IFS system receives an order, it opens a return materials authorization, along with a shop order for the required repair work and a customer order with instructions on where to ship the product once it's repaired. These messages can be sent via EDI, XML, or over Web pages in HTML format, depending on the customer's preference.
Teleplan is trying to simplify the message transfer by using an IFS integration platform called IFS Connect in conjunction with Microsoft's BizTalk Server to create a universal message translator.
But Reisenweber says this would not relieve Teleplan from having to write interfaces that ensure that each message going to the IFS system contains the exact data that is necessary to process a specific customer's order. XML would allow that.
"With an XML messaging structure, we could create a single interface that contained data for processing all of our customer orders and be confident that the system would only see the data that pertains to the customer that was sending an order at a given time," Reisenweber says. "And when we add new customers, we could add whatever data they needed to that same interface without worrying about messing up the system."
In carrying out its merger with Compaq, HP sought to minimize its need for writing application interfaces by putting all of its units that serve business customers on the same CRM system from Siebel Systems, San Mateo, Calif. "We had the option of integrating 40 or 50 different legacy CRM systems," says HP's Overly. "But the cost and time to do that was prohibitive."
In less than 12 months, HP got roughly 16,000 sales reps, marketing professionals, and call-center representatives connected to 46 instances of the Siebel suite in various parts of the world. But its integration job was not complete.
"Among other things, we want our front-office system to interface with our order management and pricing applications in order to give customers accurate quotes," Overly says.
To make that happen, HP's IT staff is building custom interfaces between Siebel and the SAP ERP suite. "As we look forward," Overly says, "we are reviewing technology offered by Siebel and others to help automate the building of those connections."
Siebel offers its own integration platform, called the Universal Application Network, or UAN. Austvold, the AMR Research analyst, says this is the closest he has seen to an open platform from an application vendor. He also notes that Siebel developed the platform through a series of partnerships with independent EAI vendors.
"Siebel simply tells customers, 'You pick which EAI provider you want to work with and we will provide the business processes on top of that platform,'" Austvold adds.
Says Overly, "If the Siebel platform does what it's supposed to do, we think it's a good deal and would help us save money."
Integration devices
| Application adapter | Creates a connection to a specific function within an application |
| Integration broker | A communications hub that routes messages to and from various applications on a network |
| B2B broker | A communications hub that routes messages to and from various applications on multiple company networks |
| XML | A messaging format for creating electronic documents such as purchase orders or invoices |
| XML Web service | Can carry instructions for multiple applications inside a single wrapper |
| Source: MSI | |
Top six IT dollar investments in 2003—by manufacturing vertical
| IT investment area | Total manufacturing n=273 |
| Application integration | 37% |
| Database/data warehouse | 13% |
| Application servers | 13% |
| Portals | 8% |
| Wireless technology | 4% |
| Web services (XML/SOAP) | 4% |
| Source: AMR Research | |
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