Strategies For IT Integration

The fact that IT has become essential to many organizations is nothing new.
Indeed, over the years, many large organizations have built up a diverse
portfolio of IT systems that include packaged applications (such as SAP R/3,
Siebel and Peoplesoft), legacy systems (often based on older mainframe
technology), custom bespoke systems and database management systems (such as
Oracle and MS SQL Server). With rapid technology innovation, such IT portfolios
often end up becoming a 'melting pot' of different technologies, platforms and
architectures.

With the need to remain competitive, many organizations are compelled to
involve themselves in new business initiatives such as e-business, customer
relationship management (CRM) and supply-chain management, to name a few. These
new business initiatives all share one important characteristic: they rely on
the integration of IT systems.

In the case of e-business, for example, websites must be integrated with
back-end IT systems, and in the case of CRM, customer information must be
integrated from a variety of other IT systems. Notably, the integration of IT
systems is just as relevant to public-sector organizations as it is to
commercial ones. For example, the realization of e-government requires the
integration of IT systems used in government.

 

A hot area

IT integration has become something of a 'hot' topic. A study by research firm
IDC in 2002, based on 1,350 interviews, indicated that more than 80 percent of
CIOs and CTOs believed integration was either mandatory for addressing
mission-critical activities or a key enabler for meeting business-critical
needs.

Unfortunately, the 'melting pot' IT portfolio does not easily lend itself to
the integration of IT systems. Two common barriers are technology
incompatibility and the fact that certain IT systems (particularly older ones)
were not originally designed for integration in the first place.

CIOs and CTOs are therefore faced with a new challenge of developing a
strategy for IT integration within the organization. Importantly, a strategy for
IT integration must be long-term and be able to 'ride over' the inevitable
changes in the technology landscape.

Research suggests that there are four main strategies for IT integration,
namely, consolidation, homogenization, communication and orchestration.

What does this mean?

Consolidation involves the merging of IT systems, much in the same way that
organizations may merge to leverage on greater levels of efficiency. Where an IT
portfolio has IT systems, which overlap in functionality or provide closely
coupled functionality, consolidation provides a means of removing redundancy.
The result: leaner IT and less need to maintain many disparate IT systems.

Homogenization involves replacing IT systems with an integrated suite of IT
solutions typically provided by a single vendor. Enterprise Resource Planning (ERP)
solutions are a prime example of a homogenization strategy, where an
organization can purchase a core ERP solution and then select the modules (eg
distribution, personnel, marketing, sales) it requires to run its business. One
drawback with this strategy, however, is that it is often the case that an
organization needs to change its business processes to fit the IT solution
rather than vice-versa.

Communication involves ensuring that individual IT systems are able to
interoperate with other IT systems. This means that IT systems are built in such
a way that they expose their functionality through platform-independent 'open'
standards such as web-services or Enterprise Java Beans (EJB). While this can be
achieved with newer IT systems, older legacy IT systems are more problematic and
may need to be substantially re-engineered.

Orchestration involves the use of an orchestration engine to manage the
interaction between individual IT systems. The individual IT systems are 'hooked
up' to the orchestration engine which then serves as a broker for transferring
messages between the IT systems. The orchestration tools provided by vendors
such as TIBCO, SeeBeyond and WebMethods support such an approach.

The choice over which IT integration strategy to use depends upon several
factors. These includes the size and diversity of the organization's IT
portfolio, it's current and future integration needs, the fluidity of its
business processes, and the level of IT maturity within the organization. Most
important for CIOs and CTOs however is that they are able to align the IT
integration strategy with the organization's business strategy, and this in turn
should ensure that they receive a high level of support from the top management.

Dr Wing Lam

The author is Director, MISM Program and Associate Professor at Universitas 21
Global and can be contacted at hlange@u21global.com