Enterprise application integration: EAI is the soluble glue needed for modular relationships that allow organizations to be flexible and responsive to market demands. (TechTrends).

At the Core

This article:

* Defines enterprise application integration (EAI) concepts and technology

* Examines EAI's potential contribution to business performance

* Identifies information management issues arising from EAI use

In the December 2000 issue of InfoPro, Bob Tillman, director of public relations and government advocacy for ARMA International, wrote of a visible future where new business models include modular corporations, outsourcing, and network relationships: "Modular relationships provide firms with greater flexibility, a more rapid response to market changes, a greater competitiveness in the short run, and less risky innovations. It is a future in which systems built to change are more valuable than systems built to last."

Enterprise application integration (EAI) is a kind of technological Velcro, enabling computer systems to accommodate such change. EAI allows diverse systems to connect with one another quickly to share data, communications, and processes, alleviating the information silos that plague many businesses. The benefits of assimilating new systems without prolonged programming efforts are apparent following merger and acquisition activity. EAI solutions provide a way to connect the systems of collaborators, partners, and others for as long as necessary, decoupling when the relationship ends. EAI is, in essence, the soluble glue for the modular corporation.

In its April 2001 report for AIIM International, "Enterprise Applications: Adoption of E-Business and Document Technologies, 2000-2001: Worldwide Industry Study," Gartner defines EAI as "the unrestricted sharing of data and business processes among any connected applications and data sources in the enterprise." Gregg Wright, senior vice president for e-solutions services at McLean, Virginia-based Information Management Consultants Inc., defines EAI as "a strategy for making business processes more valuable ... in its simplest form [it] involves passing data between application systems, and at its most complex, [it] involves rationalizing overlapping business processes, disparate data structures and diverse technologies." Market forecasts for EAI predict it will be in the $11 billion to $12.5 billion range by 2005 with 22 percent annual growth, according to Meridien Research.

Industry-Specific Implementations

EAI is considered strategic because its potential contribution is measured in terms of attaining or exceeding key performance and competitive benchmarks for entire industries, as noted in the following examples.

Banking. The basis of competition in banking and financial services is customer retention. Customers with multiple accounts are less likely to change, but most financial institutions have stovepipe systems for credit cards, checking, savings, mortgage, brokerage, and other services. An EAI implementation would integrate the systems so that a data warehouse can aggregate account data, provide a single view to the customer, and recommend what additional products the customer should be offered. In EAI systems instituted at Bank of America and Royal Bank of Canada, a transaction in one account triggers an event in another process for a marketing contact.

Manufacturing. Manufacturing's key competitive measure is cost reduction through inventory control and just-in-time processes. Allowing outside suppliers to view inventory data is possible with enterprise resource planning (ERP) applications (see "Enterprise Applications"), but EAI provides a way for the manufacturer's systems to communicate with external systems to track sales, forecast demand, and maintain a detailed view of pricing and availability among many suppliers. General Motors' Covisint is a custom vehicle order management system that interfaces with inventory, planning, and logistics applications in the supply chain.

Life Sciences. In the life sciences industries, being first to market is critical since patents on new compounds expire within 17 years from the time the first documents are submitted to the Food and Drug Administration. EAI applications in pharmaceuticals, biotechnology companies, and research institutions integrate data from diverse laboratory systems with clinical data and other core systems so that it can be available to analytical applications. Several such projects are quietly underway within U.S. companies working on human and animal genome projects.

Reaping the Benefits

Christy Bass of Accenture, writing in the April 2001 issue of eAI Journal, estimates that integrating enterprise application software with customer relationship management (CRM) functions can deliver as much as $17 million in profit to the average $1 billion business unit. Major savings include lower costs per transaction, decreased error correction costs, and order-processing speed. Whether such estimates are realistic or not, return on investment is crucial to project funding. EAI is a long-term investment, one in which software costs alone range from $400,000 to $700,000, with large implementations costing $1 million or more.

The strategic advantage of EAI is not just the exchange of data but how it is achieved as well. Prior efforts to integrate computer systems involved writing code that allowed one computer to speak to another, as shown in the integration approaches listed on page 52. Each source application (the one sending data) needed a custom written connection to the target (the computer receiving the data). Custom connections are expensive because they take time to write and maintain. Whenever there is any change to either system (e.g., an upgrade), new connections have to be written.

In contrast, EAI makes use of middleware (a server and software) into which many applications may connect (see Figure 1). Functioning as a central hub, the EAI server transforms data from one application to another and can coordinate processes among applications. This means, for example, that when a bank customer changes the name on a personal checking account, it automatically changes on all of the customer's accounts. The EAI system may also send a message for an insurance representative to contact the customer, as name changes usually signify a change in marital status.

[FIGURE 1 OMITTED]

Applications may be added to or removed from the middleware hub as situations dictate, without intricate programming. In industries where third parties provide critical services -- for example, an outsourced canning plant contracting with a major food processor, or a contract research organization working with a drug company -- this is a boon. Web services, which are standards-based tools that can pull together information from multiple sources over the Internet, are garnering much attention as the focus of EAI projects shifts from integrating in-house systems to concentrating on collaboration with partners, co-marketers, suppliers, and customers.

Companies that have begun using Web services have quickly found it is the underlying infrastructure -- workflow rules, validation routines, and the like -- that is more complex than anticipated. According to Wright, "Understanding the existing technology environment, describing the business operations model, and determining which business units, processes, systems, and data are involved is rarely easy." EAI projects must spread their considerable costs over multiple systems in order to produce meaningful return on investment, and most strive to show results within six months so as not to lose senior management's attention.

RIM Implications

Several information management issues are emergent in EAI's expensive, highly visible, and complex projects. Sharing information raises concerns about systems access and security. Presumably, customers, suppliers, and collaborators cannot have unlimited access to data in connected systems. How to ensure that connected systems permit information sharing without information theft is a concern. Secondly, consumer data privacy is the subject of varying legislation throughout the world. If systems are connected, assuring compliance becomes that much more complicated. The idea of classifying data into categories so that access and security rules can be applied to each is beginning to take hold.

Records, in the sense of entities to be managed, are ephemeral. There is no single, complete consumer transaction record to manage because the transaction may be spread over several connected systems -- CRM, order entry, warehousing, shipping, and accounting. The transaction record actually consists of a series of field locators, each identifying the system and the database table in which a particular bit of information resides.

The good news is that EAI may be configured to query across all the connected systems; the bad news is that the record exists only in response to such queries. In addition, the records that outsiders and employees within the company see may vary considerably due to different security rules for users. The ability to capture a Web transaction and preserve it as a record is part of Boston-based Tower Technology's Web Capture offering in partnership with Canberra-based Tower Software's TRIM.

It also is likely that connected systems will require that records be thought of as the products of specific processes. The idea that specific workflows generate particular classes of records is not lost on records management (RM) software companies and others. MDY Advanced Technologies' File Surf is an early example.

On the plus side, could a middleware approach be used to integrate records management software systems with transaction-based e-business systems? Application programming interfaces have not been entirely worry-free for integrating RM software to other applications, such as document management systems. Watch for leading-edge RM software companies to explore a middleware approach.

Spencer Johnson's Who Moved My Cheese (see review in this issue) admonishes everyone to adapt to change quickly. If the business world's cheese is constantly in motion, EAI may be information technology's best hope of being ready to adapt again and again.

(Editor's Note: The products mentioned in this article serve as examples by the author and do not constitute endorsement by ARMA International.)

RELATED ARTICLE: Enterprise applications.

* Enterprise resource planning (ERP) software packages have modules for manufacturing, order entry, accounting, general ledger, purchasing, warehousing, transportation, and human resources. Best known examples are J.D. Edwards, Oracle, PeopleSoft, and SAP. ERP's objective is to manage related functions and processes throughout the entire organization.

* Customer relationship management (CRM) software manages and controls interaction between a company and its clients with the objective of ensuring consistent, efficient service whether via phone, fax, e-mail, or regular mail. CRM software also lets customers track order status, view their accounts, and handle routine matters such as address changes. Its objective is to increase revenue and customer satisfaction while maximizing profits by lowering the cost per transaction.

* Human resources management systems include software packages for performance appraisal, payroll, benefits enrollment, skills inventory, and other functions related to personnel.

* Accounting systems technologies manage income and expenses, particularly invoice generation and payables management.

* Records management/archiving (RM/A): According to industry analyst firm Gartner in its report, "Enterprise Applications: Adoption of E-Business and Document Technologies, 2000-2001," RM/A is software for "storage, access, management, and viewing of data that is often print-stream oriented." Examples given include IBM Content Manager, TrueArc, Tower Software, and OpenText iRIMS. In the same publication, Gartner noted that the definition was not well understood, as survey respondents believed that document imaging, document management, and other technologies were, in fact, RM/A.

Integration Approaches

RPC -- Remote procedure calls are a bit of code that lets one application invoke another. A gateway from a document management system to a records management system is one example. The problem is that the RPC must be rewritten each time one application or the other changes or upgrades.

MOM -- Message-oriented middleware. Message brokers transport data from one application to another by putting it in a message format, somewhat like e-mail. Data from the sending application goes into a queue where it can be accessed by the receiving application. Message brokers are for one-way exchanges, where few if any operations are performed on the data and timing is not critical.

Object brokers have their origin in the idea that programming code for certain types of common functions can be assembled into components or modules and be reused as needed. A program to print, for example, need not be rewritten for every application individually -- rather, all applications could call the "object" for printing. Object brokers can also be used to build reusable software components that let diverse hardware, operating systems, and applications communicate with one another. The difficulty is that objects work on specific operating systems, not across all operating systems. The most common object brokers are:

* COM+: Component object manager plus, (formerly known as distributed common object manager, or DCOM), developed by Microsoft to run on Windows operating systems

* CORBA: Common object request broker architecture, developed by the Object Management Group for the UNIX operating system 

* EJB: Enterprise JavaBeans, developed to run on Sun Microsystems operating system

Web services are a common language that can express data and the rules for reasoning about the data. It is what Tim Berners-Lee, et.al. describe as "The Semantic Web" in their May 2001 Scientific American article. Web services are thought by some to be a more efficient form of application integration because they introduce intelligence into applications themselves. Technologies identified with Web services are:

* XML -- extensible markup language, tags that describe the data itself rather than its appearance

* RDF -- Resource description framework, a document that asserts properties and values for things

* SOAP -- Simple object access protocol, used for Web services

* UDDI -- Universal description discovery and integration 

* WSDL -- Web services description language 

Julie Gable, CRM, CDIA, is the Principal of Gable Consulting, an independent firm that specializes in bringing strategic business perspectives to information management issues. Gable is also the Associate Executive Editor of The Information Management Journal and a Contributing Editor for Transform Magazine. She may be contacted at JulieGable@ aol.com.