Why Integrate

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Why Integrate?

Clarity Integration White Paper

Autumn 2001

© Clarity Integration – 2001 / 2002



Clarity Integration delivers Enterprise-wide Integration

1 INTRODUCTION................................................................................................3

1.1 PURPOSE OF THIS PAPER ..................................................................................3

1.2 FAST-MOVING MARKETPLACE.........................................................................3

1.3 PROCESS IMPROVEMENT .................................................................................3

1.4 COMPLEX BUSINESS RELATIONSHIPS ...............................................................3

1.5 E NTERPRISE INTEGRATION IS THE SOLUTION...................................................3

1.6 THE BUSINESS VIEW ........................................................................................3

2 BACKGROUND ..................................................................................................4

2.1 EVOLVE TO SURVIVE .......................................................................................4

2.2 “BRICKS AND CLICKS” MUST INTEGRATE AND MOVE TOGETHER ....................42.3 WIDE ACCESS TO ELECTRONIC SERVICES ........................................................4

2.4 SERVICE IS THE KEY TO SURVIVAL ..................................................................4

2.5 I NTEGRATION WILL ENABLE EFFECTIVE MANAGEMENT OF CHANNEL COSTS ...5

2.6 I NTEGRATION IS AN ALTERNATIVE TO RATIONALISATION ...............................5

3 A TYPICAL ORGANISATION.........................................................................6

3.1 DEPARTMENTAL SYSTEMS OPERATE IN ISOLATION .........................................6

3.2 MULTIPLE VIEWS RESULTING IN CONFLICT......................................................6

3.3 FRAGMENTED PROCESSES AND INFORMATION.................................................7

3.4 EXPENSIVE SOLUTIONS TO THE PROBLEM........................................................7

4 PARTIAL SOLUTIONS .....................................................................................8

5 AN INTEGRATED SOLUTION......................................................................10

5.1 AUTOMATE PROCESSES.................................................................................11

5.2 UP TO DATE AND ACCURATE INFORMATION ENABLES INNOVATION ..............11

5.3 U NIFIED CATALOGUES AND STOCK LEVELS ENABLE FASTER DELIVERY ........11

5.4 CHANGE ONLY THOSE PARTS THAT ARE NECESSARY .....................................11

5.5 EAI PROMOTES MOVES INTO NEW MARKETS .................................................12

5.6 ELECTRONIC INFORMATION EXCHANGE CUTS COSTS.....................................12

6 CLARITY’S APPROACH TO INTEGRATION ...........................................13

6.1 A N I NTEGRATION FRAMEWORK ....................................................................13

6.2 A COMPLETE INTEGRATION SOLUTION ..........................................................13

7 CLARITY INTEGRATION LTD. ...................................................................14

7.1 YOUR R IGHT TO COPY ..................................................................................14

7.2 LEGAL NOTICES ............................................................................................14

© Clarity Integration Limited of 14 Autumn 2001




1 Introduction

1.1 Purpose of this paper

This White Paper provides a high-level view of the importance of integration for

today’s successful businesses. It is intended to describe the key business drivers in

today’s economy and how enterprise integration can dramatically increase a

business’s adaptability and responsiveness.

1.2 Fast-moving marketplace

The success of a business is now directly related to the speed with which it can

respond to new business models and changes in its chosen marketplace and how it

uses Information Technology to deliver its goods and services.

1.3 Process improvement

An organisation’s processes are often deep-rooted, having evolved and formed as the

organisation has grown and developed. However, these processes or systems can limit

further improvements and need to be replaced or modified to support future

development. Unfortunately, major changes in strategy are often expensive and risky

and tend to be implemented slowly. Smaller increments of change can often create a

much stronger long-term solution.

1.4 Complex business relationships

Increasingly, business partnerships and collaborations will allow organisations to

extend and improve their services and offerings. The challenges of these new and

more integrated business relationships do not exist in isolation but along with many

traditional business challenges that demand improvements in supplier interactions,

customer support and service, and the streamlining of internal processes.

1.5 Enterprise integration is the solution

Successful integration of its business processes positions a company to best exploit

these opportunities and should be viewed as a company wide project although it does

not necessarily require immediate change in all business areas. Flexibility to grow andextend is key to the success of an integration project.

1.6 The business view

This paper does not describe the detailed technical challenges that an integrated

enterprise must overcome, but describes some of the benefits of integration, and the

reasons why a company should be investigating the opportunities that full integration

will bring.





2 Background

2.1 Evolve to survive

Business organisations are evolving continuously. However, to be successful, they

must evolve more rapidly and more effectively than their competitors. Successful

businesses must make positive efforts to change the way they conduct their business

and grow, in order to maintain a position of strength. Traditional evolution is

becoming too slow.

2.2 “Bricks and Clicks” must integrate and move together

During the “Dot.Com” boom, the typical web presence was often a separate entity

from the “real” company. The perception held by many people was that thecyberspace brand could and should be different from the ‘Bricks and Mortar’ brand.

This separation allowed many companies to implement their Internet service at a

speed the rest of the organisation could not achieve. Unfortunately, the advantages

gained from the speedy development of the additional marketing channel (i.e. The

Internet), has the downside of leaving it isolated from the existing channels to market.

Limited integration between the sales and the service channels increases confusion

and the potential for failures in customer services. Digital channels, such as the Web,

the mobile phone and Interactive Television are just additional channels to market and

must be managed and controlled as such. Enterprise Application Integration offers the

most effective method of creating consistency across these channels.

2.3 Wide access to electronic services

Internet use has grown considerably over the last few years. Pure Web companies are

starting to show profits that have been enabled by a greater acceptance by the buying

public and a reduced concern of the security aspects. The PC market is widely viewed

to be approaching saturation point with approximately 50% of the population having

regular access to the Internet. Use of mobile devices and Interactive Digital Television

is growing, although demand has not matched the expectations of many people. For

customer facing companies, the opportunities offered by these devices are

considerable, as they provide focused marketing and interaction with customers

almost anywhere.

2.4 Service is the key to survival

Many products have quickly become or are already in the process of becoming

commodities. These products typically have a known value, which may reduce over

time. The real race between commercial organisations is to differentiate themselves

through quality of service. In most cases, an organisation must improve the service

that it provides to its customers. The leaders in this race to improve are the companies

who successfully integrate internal processes to allow front and back-office

integration, thus allowing a consistency of customer service regardless of whether the

customer is in a shop or on the Internet.





2.5 Integration will enable effective management of channel costs

Estimates suggest that each new marketing channel increases the operational costs byan average of 60%. This covers the infrastructure, software and personnel cost which

are often implemented specifically for that new channel. Integration reduces

duplication and therefore reduces operational costs growth when the new channel is

introduced.

2.6 Integration is an alternative to rationalisation

Many large Mergers and Acquisitions (M&As) have experienced the challenges faced

when trying to achieve savings through the rationalisation of IT processes. This

requires expensive and often risky movement of data and processes to other systems

and infrastructures that are often not easily compatible. In the main, these systems

have developed over many years and are both complex and valuable.

Clarity Integration believes that M&As and other close collaborative partnerships

could provide earlier benefits for their respective organisations if the systems are

integrated first before they are rationalised, merged or replaced. This will facilitate

some of the biggest benefits of an acquisition: increased customer base, customer

knowledge and knowledge management. Integration can produce these benefits faster

than merger or replacement.





3 A Typical Organisation

3.1 Departmental Systems operate in isolation

Consider a typical organisation with a number of disparate departments. Each of these

departments has built a number of processes designed to meet their specific

responsibilities that are often reliant upon stand-alone systems. These systems have

often been built in isolation, with little automated interaction between the

departments.

3.2 Multiple views resulting in conflict

This evolutionary development requires many internal departments to interact

individually with customers and suppliers, creating many internal and external viewsof the same customer. This approach also gives customers and suppliers multiple

views of the organisation. Each view is separately maintained and is not only

different, but can often conflict. This highly complex matrix of relationships,

interactions and views is often made more complex by the number of personal

relationships and informal channels into and out of the organisation. This affects both

supplier and customer interactions, and again serves to further increase the number of

views a customer or supplier holds of the one company.

Figure 1 – Typical Organisation Process Flows

Supplier Customer

Customer

Customer

Supplier

Supplier

Supplier

The Company

Supplier

Supplier

E-markets

Fulfilment

Marketing

Manufacturing

Sales

Finance

Procurement

Internet

InternetInternet

Customers Suppliers





3.3 Fragmented processes and information

Business processes responsible for the delivery and management of services andofferings to customer are generally made up of many individual manual and

automated tasks. These are linked together and triggered by certain events. The

process chains contain valuable elements of reusable functionality and if they can be

streamlined, they may allow efficiency and productivity savings to be achieved.

Duplication of tasks and processes will often be due to historical development.

In a mirror image of the process fragmentation, information is held within the

organisation in many locations and systems and will in many cases be duplicated and

possibly even contradictory.

3.4 Expensive solutions to the problemThere are a number of historic methods of addressing some of these issues.

Business Process Re-engineering (BPR) focuses on the internal processes within a

business, with an aim of reviewing them and introducing new and improved ways of

working. This approach has been very successful for some organisations, although the

benefits have not been realised by all.

Successes have been held back by complexity, size, time to complete and the

challenges of replacing mature processes and retraining staff. Many have found the

distraction of large-scale internal improvement projects deflected them from the

parallel changes taking place in the market. Nowadays, the rapidity with which the

market moves does not allow years or even months of analysis prior to decision-

making.

Enterprise Resource Planning (ERP) solutions offer considerable internal savings

and major speed and management advantages, by providing a common processing

platform for different parts of the business. The objective is to improve business

efficiency by centralising data and processes in key business units by moving their

systems to the same ERP platform.

As well as being expensive and time consuming to implement, these projects often

disrupt the enterprise and introduce further proprietary layers of technology that willhamper more focused integration and business development. While integrating some

processes, these solutions can create major challenges to integrating those parts of the

company outside of the ERP system.





4 Partial Solutions

Customers are becoming more demanding. We are all used to comparing alternative

suppliers via the Internet, where better prices and in some cases a better service are

only a click away. This increased freedom is not only affecting the way we shop over

the Internet, but also through more traditional sales channels.

Many companies need to provide a single view of the customer using a Customer

Relationship Management (CRM) solution. CRM solutions offer great improvements

in the way the customer and company see one another, and increase the service and

value delivered from the relationship. Similar initiatives with Supply Chain

Management (SCM) help to reduce the time delays of interacting with suppliers.

Improved supply chains are a pre-requisite to improving customer service and

operational costs savings. This is a major step in allowing the customer to select and

order, confident the order can be met by the promised time. SCM will be

complemented by Partner Relationship management (PRM) solutions aimed at

providing increased value from the rather limited, “communication-only” solutions

provided by SCM packages.

Figure 2 – A Partial Solution:

In

Customer

Customer

Customer

The Company

Fulfilment

Marketing

Manufacturing

Sales

Finance

Customer FacingSupplier

Facing

Procurement

Internet

C

R

M

S

C

M

Supplier

Supplier

Supplier

Supplier

Supplier

Supplier

E-markets

InternetInternet





Figure 2 shows a CRM solution acting as an interface, although in reality, a CRMsolution is often not capable of managing all channels and customer touch points, thus

exposing the need for further integration.

This type of solution addresses some of the external problems, but it does not address

the internal issues. It is still common for order information to be passed from the sales

department to the finance or fulfilment department via eMail. This requires re-keying

of information into the other departmental computer systems. At best, this is time

wasting, and at worst it can cause delays and errors and hence lose business.

This model does not support integration of the customers with the supply chain. As

such it prohibits one of the most interesting new business developments beingdeployed today, the vision to integrate the front to back-office for real-time order

fulfilment





5 An Integrated Solution

A fully integrated set of IT systems can be developed and deployed today. It will

deliver a number of key benefits:

• Allow customers to order indirectly from your suppliers

• Allow customers to interrogate the fulfilment system to determine when to

expect delivery – and even make changes, such as delivery address change or

reorders

• Allow new business models to be deployed quickly

• Reduce manual effort and re-work

• Improve the efficiency and scope of Just-In-Time

• Improve the efficiency of the supply chain

• Deliver improved customer service

An overall business model for a fully integrated enterprise is shown in figure 3.

Figure 3 – A Integrated Solution

In

Supplier Customer

Customer

Customer

Customer

Supplier

Supplier

Supplier

Internet,

Stores

Kiosks

Internet,

Intranet

Extranets

The Company

Business Integration

Supplier

Supplier

E-markets

Fulfilment

CRM

Marketing

Manufacturing

Sales Finance

Enterprise

Integration

Customer FacingSupplier

Facing

SCM





5.1 Automate Processes

Many organisations have introduced automated processes to reduce the cost and effortof dealing with customer service enquiries (possibly with the introduction of

interactive voice systems and automated call handling). This automation of processes

is in many cases not tightly integrated within the organisation. Increased process

automation with integration will allow an organisation to provide its customers with

more valuable services to further reduce customer service issues that have to be

manually supported. Examples of more advanced solutions include:

• Providing more active control of bank accounts, by increasing options to define

rules for moving money between current and savings accounts.

• On-line travel retailers delivering more time efficient methods of booking thosenon package trips that need flights, accommodation, car rental and insurance,

which currently can take hours on the web.

Process integration will also provide a framework to enable a rationalisation of

duplicated and fragmented tasks already in existence and certainly act as brake on the

development of new spurious functions.

5.2 Up to date and accurate information enables innovation

With an integrated solution, as illustrated in figure 3, data will be shared between the

different departments within the organisation. Centralised and shared data will be

more complete, more accurate and more useful. It will open opportunities for more

focused and intelligent marketing, improved sales and cross selling, as well as more

sophisticated knowledge management and analysis of future trends. For simplicity in

this diagram, the CRM solution provides the necessary technical capability for

delivering the services across the various sales channels used by the organisation to

reach its customers. A single view of the customer immediately improves the quality

of service, for example, every customer service operator should now know what

issues or complaints a customer has raised, the products brought and the overall value.

5.3 Unified catalogues and stock levels enable faster delivery

With the integration between a company and its suppliers, catalogues are alwayscorrect, stock levels known at all times and delivery requests can be processed

immediately, because a direct link negates the need for multiple copies of data. This

increased knowledge and access to suppliers’ stock levels allows an organisation to

increase the information presented to its customers and the confidence of delivery

within a promised timeframe.

5.4 Change only those parts that are necessary

Integration creates loose coupling of applications, tasks and processes. This loose

coupling effectively isolates the physical nature of each component, in terms of its

structure, characteristics, operating platform and development language and place of





execution. This isolation facilitates faster and less expensive development, by

allowing a development team to change only what needs to change and introduce new

functions and join with old to create new variations on existing processes.

The modification of components is tested, and must conform to the published

interface provided by that component to its loosely coupled partners of use

components.

Component based development has offered and promised savings for many years.

Integration delivers component solutions at a higher level which are often easier to re-

use, for example a component that carries out a credit reference agency lookup or a

component that checks a complaints system for current customer issues.

5.5 EAI promotes moves into new markets

Product expansion moves into new vertical sectors and acquisitions can be achieved

using phased integration of an organisation’s systems, by either linking directly to a

similar integration solution, or by introducing each acquired system into the acquirer’s

integration service. New product systems or delivery channels can be plugged into the

integration backbone created within the enterprise to allow rapid sharing of the new

with the old.

5.6 Electronic information exchange cuts costs

An integrated enterprise will have redefined its internal systems and processes so that

they can be shared with other parties. Naturally, security and manageability issues

must be addressed to protect the interests of all parties. With these issues addressed,

information previously held for internal viewing only can be accessed by suppliers

and customers to simplify the interactions and increase business success.





6 Clarity’s approach to integration

6.1 An Integration Framework

A White Paper written by Clarity Integration entitled “An Integration Framework”,

describes the generic integration framework developed by Clarity Integration to allow

organisations to fast track through the architecture and development to achieve

effective integration deployment. The framework supports the key services and

functions required to support an integrated enterprise.

6.2 A complete integration solution

Clarity’s approach to a complete integration solution starts with this framework and

then incorporates the technical and business driver requirements to define a logicalarchitecture for the integration solution. A solution developed in this way becomes

extensible to support new requirements as they emerge. It can also be built to support

the most stringent of manageability and availability needs.





7 Clarity Integration Ltd.

Started in 2000 by experienced IT consultants, Clarity focuses on, and specialises in,

business and application integration. Clarity Integration has quickly developed into a

centre of integration excellence. It provides a unique combination of enterprise

systems development, business systems design and technical integration experience.

Clarity Integration brings to market a proven integration delivery methodology, that

provides a flexible framework for the delivery of our technical expertise. Our

knowledge provides guidance to organisations wishing to implement an integration

backbone.

7.1 Your Right to Copy

This document is available without charge and you may make as many copies as you

wish, providing each copy is complete and recognizes the copyright of this material as

belonging to Clarity Integration Ltd.

If you would like further copies, please contact either:

e-mail: [email protected]

URL: www.Clarity-integration.com

Liberty House, 222 Regent St, London, W1B 5TR

Office : +44 (0) 207 297 2017

Fax : +44 (0) 207 297 2128

7.2 Legal Notices

All trademarks are acknowledged as being the property of their respective owners.

This document has been prepared based upon our extensive experience and isintended to share some of our experiences with you. The information is provided

without warranty for its applicability in your particular environment.


mailto:[email protected]


http://www.clarity-integration.com/

http://www.clarity-integration.com/


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