Piecing IT together

Companies with disparate IT systems are increasingly seeing the benefits of integration, but is this best achieved with apps from one vendor or through middleware?

  • E-Mail
By  Neil Denslow Published  August 27, 2002

I|~||~||~|Many companies in the Middle East have grown from small businesses to large organisations. Such expansion has left them with a mixture of different applications that cannot communicate with the software stack required to operate in today’s digital age. To solve such issues, companies are increasingly turning to enterprise application integration (EAI).

The OHI Group in Oman is a typical example of a large Middle East holding company. It comprises 22 different businesses, which started at various times with various partners over the past 25 years. The group operates in a variety of sectors, including IT, tourism, petroleum and the hospitality industry. Each company has built up extensive data on its customers and there are possibilities to cross-sell products. However, Srinivasan
Krishnan, group IT manager, OHI Telecommunications Company, says that this was not possible as the different business units did not know what the others were doing.

“We were operating as different islands of information and we were not sharing anything,” he complains.

The company overcame this problem by integrating each businesses’ applications. For example, the group now has an enterprise-wide e-mail application, which runs from a central e-mail server. This allows the group’s employees to communicate with each other and more effectively share information around the company.

This is a limited example of the benefits that EAI can bring to an organisation and OHI is looking to extend its integration to cover the company’s entire back end system and payroll. Ian Evans, sales manager EAI, Reuters, suggests that this all-encompassing approach is the right tactic, as application integration is most effective when it extends across an organisation’s entire IT infrastructure.

“If you look at examples where [companies] have taken applications A and B and just connected them together, it works, and does everything they wanted, but the return on investment (ROI) isn’t that big. When you take application integration to the enterprise level, even if you are only a medium sized company, that’s where you get the true return,” he observes.

The advantages of having applications talk directly to each other are manifold. Vendors cite reduced staffing levels, quicker transactions and seamless data flow as the benefits of effective EAI. Indeed, Tony Hart, e-business analyst at Datamonitor, believes that it is essential given the increasingly integrated nature of modern business.

“What is happening now is people need applications to talk to one another. Before people would invest in an ERP system to solve a particular problem, but now because of the way these business processes work, they have to touch on the complete value chain,” he says.

Despite this, the region has been slow to wake up to the possibilities offered by EAI. Diyaa Zebian, business development manager, BEA Systems, says that many companies have integrated a few applications, but only a limited number have so far integrated applications across the entire enterprise.

Raoul Hunter, e-business advisor, Computer Associates Middle East, agrees and says that it is only companies that have been through a number of mergers, or adopted a best of breed strategy, that have really taken up the challenge of integration.

“Unless it is forced upon you, you often don’t see the benefits or necessity of EAI,” he says.

||**||II|~||~||~|However, local projects are on the increase, with banks and telcos, which have the money, size and IT know-how to integrate applications, leading the way. Banks are looking to integrate internet banking operations and ATM systems with their core banking systems, while other businesses start with core applications and their CRM solution.

Evans believes the move towards EAI is a boardroom led process, as directors demand real time information about their company.

“The pressure has come right from the very top of companies, to say that on the one hand
I want maximum efficiency, but I also want to be able to take a global view of my whole organisation… The only way to do this is if [the systems] are all integrated together,” he says.

Zebian adds that the involvement of the board is vital for successful EAI because departmental managers may resist sharing data unless forced to. “It requires executive sponsorship and the CEO has to say ‘yes I am sponsoring this project’,” he advises.

The question though remains how companies can most efficiently and effectively achieve this level of integration. Should they buy all their applications from one vendor, as they will be easier to integrate, or should they buy best of breed applications, which best fit their business needs, and then integrate them with middleware ‘glue’?

When faced with this decision, the OHI Group decided to implement a suite of Microsoft products, including Windows 2000 Active Directory, PocketPCs and SharedPoint server, in order to avoid the expense it would have incurred integrating a variety of applications from different vendors.

“We looked at best of breed, but the cost of integrating was much more than we thought it would be and it didn’t offer any greater advantage. There was no reason why we should spend that much more and get no significant advantage,” says Krishnan.

Aside from integration costs, Nauman Ahmad, business applications specialist, Microsoft, adds that adopting the single platform approach can also reduce support costs, as the IT department does not require a wide skills base.
“You might [only] need a single systems administrator if most of your systems are from a single vendor… but if you have a Unix system, and a Linux system and a small mainframe, it’s hard to find someone with expertise across all these platforms. You need to hire more people, more replacements and more backups,” he says.

Other financial advantages of the single vendor approach include the ability to negotiate a bulk discount when buying a wide array of apps from one vendor. “Also, hopefully, the vendor gives you more attention because you are a bigger customer and you have more products in the set,” adds Hunter.

OHI adopted the single vendor approach, but it had a distinct advantage in that it was a virtual Greenfield site, as few of its companies had an installed IT base.

As Ahmad points out, this is rarely the case as most companies have expensive IT installations that they need to take into consideration.

“It’s very rare for a company to buy all of its applications at once. That would be the ideal scenario… but most organisations have grown to be the size they are and it is impossible for them to make a drastic decision like replacing everything with a single platform,” he suggests.

||**||III|~||~||~|Tarek Sahawy, product manager, application server & development technologies, Oracle, agrees and adds that “a lot of companies will say that their system works fine and does exactly what they expect. [Therefore] there is no point in disrupting the whole organisation just to install a new system.”

However, Leon Grové, director of professional services, SAP Arabia, contends that sometimes companies do need to bite the bullet and go through this short-term upheaval due to the long-term benefits it will bring.

He cites one company in the region that had 70 full time staff to look after 70 different applications and the associated integration. He contends that such companies need to rip everything out and implement a fully integrated single vendor package.

“Companies need to stick to their core business competencies. If they’re an automotive trader then stick to that; don’t become a software development house. If you can, buy [an integrated] package, let the vendor worry about upgrading and interfacing and stick to your business,” he suggests.

||**||IV|~||~||~|For organisations unwilling to go through the trauma of tearing out their existing applications, middleware represents a way of integrating legacy systems.

When the Dubai Customs and Free Zone Corporation (PCF) decided to streamline their computer systems this was a major issue. Agents shipping to Dubai have to send separate manifests to both departments to meet their requirements and any modifications had to be sent out separately as well.

When the two organisations decided to integrate their disparate systems, business could have come to halt as a new system was put in place. Juma Alghaith, application development manager, information technology system department, Ports, Customs and Free Zone Corporation, explains that they avoid this by linking the applications together with middleware.

“The major advantage for us was that we did not have to replace the three existing systems with a completely new system: we could simply use IBM’s [WebSphere] middleware to easily and seamlessly link the three core processes. This allowed the solution to be put in place at a minimum cost, with no impact on the service we need to provide,” he says.

Aside from avoiding a major systems overhaul, using middleware also allows a company to take a best of breed approach and select whichever vendor’s application best fits their individual needs.

Bashar Kilani, manager of business transformation and integration software, IBM Middle East & North Africa, believes that such an approach may well generate cost savings over time, despite the short-term integration costs that could be avoided by sticking with a single vendor.

“If that vendor does not really have the functionality you need and you have to go with a half-baked solution, then in the long run you are going to lose out,” he asserts.
Integrating different products is becoming more straightforward and cheaper as vendors move towards web services. Even SAP, a notoriously difficult product to integrate, is promising to open up some of it modules in this way.

“We’re moving very much to an open environment, as there is definitely a drive for.. collaborative business. So SAP is going to make it easier and easier for our ERP system to talk to business partners,” explains Grové.

Another driver for greater integration between best of breed applications is more user-friendly middleware. Previously middleware was very adaptor-centric, which meant that coding needed to be written deep into applications. Now, however, most integration packages come with GUI interfaces, which makes the process much easier to undertake.

“All that has to be done is to define the business rules within the organisation. For example, when a message is created in one application the business rules have to decide which other application it has to be sent to,” explains Ayman Aljonaidee, senior technical consultant, Sybase.

Given this simpler integration, Datamonitor’s Tony Hart believes that companies should generally aim for best of breed. However, he accepts that in the current economic climate, companies may be forced to stick with their existing software vendor, even if they provide a less than perfect solution.

“If you’re considering a U$500,000 investment or leveraging your [existing] relationship and getting a free application that addresses 60% of your needs but not all of them, that may be a more viable option… No savvy IT department would go for one vendor all the time, but at the moment it’s an issue of cost,” he concludes.||**||

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code