In-Depth

EAI tools: Can they cut IT consulting costs?

• By Colleen Frye
• June 8, 2001

Remember your last application integration project? You called the consultants in, the meter started ticking and it seemed like they never left? (Maybe they never did.) You added custom-coded, point-to-point integration to an enterprise architecture already littered with spaghetti-like information stovepipes that tie together disparate applications. And you resigned yourself to the fact that those integrations would require care and feeding over time, as you upgraded or changed systems.

The integration problem is shared by every IT organization, large and small. It is also a problem that is ripe for a solution.

In the past few years, a new class of software product has been emerging to address this problem: enterprise application integration (EAI). More application than middleware, EAI solutions are "all trying to bring some sense of automation to a process that's very labor-intensive," said Jeanine Fournier, senior analyst with the Boston-based Aberdeen Group. Instead of spaghetti, EAI solutions help IT organizations develop an integration infrastructure that is easier to maintain and often reusable.

In a recent report on the EAI market, which Fournier authored, Aberdeen states: "Enterprises are looking for solutions that have been designed to operate on the same conceptual basis as the leading packaged applications systems; that is, speaking the language of business processes and cross-functional best practices."

"Part of the ultimate appeal of EAI is not so much integration; that's just middleware," said Chris Selland, director of strategic alliances at Primix Solutions, a Watertown, Mass.-based systems integrator and consultancy. "What it does is take ownership of the business rules. In the past, for example, accounting owned the business rules for the finance department. EAI, as a class of application, can provide you a place to create and store cross-departmental business rules, and do things you weren't able to do before," said Selland, who also followed this market as an analyst for Yankee Group before joining Primix.

Does that mean, if you buy an EAI product, you will never need to call upon a systems integrator or consultant again? Or do any custom coding? Well, no. But the promise is that engagements will likely be shorter, maintenance will be easier and not dependent upon consultants, and the payback will come over time.

"We see these as hard problems to solve," said John Dempsey, vice president of professional services, Active Software Inc., Santa Clara, Calif. "Look at how clients tailor their applications, even [packaged ones like] SAP or Clarify. They're all tailored to how they do business." Even with Active's prebuilt adapters for packages such as SAP and Clarify, there is some work involved; these are not out-of-the-box solutions. "It's easier than creating hardwired interfaces, but the value is downstream when upgrading packaged applications, because you're isolated from the changes," noted Dempsey.

Middleware on steroids?

EAI products go beyond middleware -- the traditional solution to application integration -- by offering additional functionality on top of lower level messaging and translation services. New Era of Networks (Neon), Englewood, Colo., for instance, offers content-based routing, messaging and transport; a declarative formatter; dynamic transformation; and predefined libraries for leading software packages such as IBM Lotus Notes, J.D. Edwards, PeopleSoft, SAP and Siebel Systems. In a partnership with IBM, Neon and IBM both sell MQSeries Integrator, which is built around IBM's MQSeries message-oriented middleware.

For the most part, the EAI vendor is taking responsibility for the predefined library or integration template that links, say, an ERP package like SAP with a customer information management package such as Clarify. When either of those packaged appli-cations are upgraded, the EAI vendor will upgrade the integration point. This promises to dramatically reduce maintenance.

With this added functionality, EAI solutions offer the potential to change the way companies do business, said Primix Solutions' Sel-land. "Most customers still see EAI as middleware on steroids, but it's not even really that. Once you create and encapsulate new sets of business rules to make the organization run more effectively," he said, EAI solutions can be used to link applications outside an organization, creating a virtual supply chain. This will be accomplished "by not just integrating applications, but by having this master controller. That's where EAI is going," said Selland.

EAI as an enterprise integration architecture, though, is still largely in the conceptual stage. Most firms because of a pressing business need such as Y2K, are starting with the integration of one or two critical apps. But even when the EAI solution includes the prebuilt integration templates for specific applications, it is not simply a matter of flipping a switch, as the early marketing of these products may have implied. "Prebuilt templates are a place to start; it's better than doing it from scratch," said Selland. "But customers, until they get their hands on this, underestimate the complexity of integration. You usually almost
always have to do custom work."

While CrossWorlds Software Inc., for example, positioned its EAI solutions as a "package, [it is more] like SAP is a package; it's not like a Microsoft Word," said Bart Foster, vice president of worldwide marketing at the Burlingame, Calif., company.

Foster acknowledges that some early marketing CrossWorlds did may have added to the hype that has surrounded the EAI market. "We may have set the expectation that this stuff is magically shrink-wrapped, that systems integration would be zero. We're trying to be more realistic as we talk to people. We're very cautious to make sure people understand that it's better than the alternative, but it's not black magic."

No silver bullet

EAI solutions may have been "viewed initially as silver bullets," said Aberdeen's Fournier, "but that's not the case. If some people are purchasing them thinking they can do [the integration] on their own and extend it through their enterprise, that's very wishful thinking."

Active Software's Chet Kapoor, vice president of business development, does not think customers have unrealistic expectations about these products. He said most new customers today expect to involve a systems integrator in order to get up and running with an EAI solution. "I don't think there are any surprises. More IT shops understand how complex this is, and they are glad to see software that solves the spaghetti code issue," said Kapoor. What an EAI product does do, he said, is help customers get a better handle on what to expect from a systems integrator (SI) engagement. "Before, an SI would come in and say it will be a million dollars to do this integration, and they knew the customer would be depending on the SI to maintain it. I don't think the SI likes that, either. Now there is a clean architecture available from Active to solve that problem; maintenance can be done by the SI or the customer," said Kapoor.

Even with prebuilt adapters, which Active and other vendors offer, the customer will only get "baseline connectivity," said Primix's Selland. "For basic integration, maybe there's not a whole lot for an integrator to do. But when you're dealing with legacy and custom applications, your dealers' applications and your suppliers' applications, you need to go beyond baseline connectivity. There's a lot of work for somebody like us."

Yet most of the people interviewed for this article said the need to bring on systems integrators, and/or to contract for the professional services of an EAI provider, is more a resource than a skills issue, as most EAI tools do not require a steep learning curve. "It depends on the complexity of the project," said Selland. "Many companies want to be successful in a short time, so they call us in and then they take over the maintenance. It's harder and harder for a company that makes shoes, for example, to get good IT people. The [EAI] tools are not that hard."

Active's Dempsey said it is a little of both. "Integration is a hard problem to solve. Even if you're only integrating two packages, it does require subject matter expertise, and oftentimes those resources are already busy. You also need to understand the integration technology."

Florida Rock Industries, for example, a Jacksonville, Fla.-based manufacturer of construction materials, brought in Deloitte Consulting to migrate a mainframe legacy system to the Oracle suite of applications running on Windows NT. At the same time, the company went on a search for an "anything-to-anything tool for conversion purposes, and in the long term as a point of interface between [internal] systems; the other way was doing it ourselves and writing a module," said George Ross, director of MIS.

One of the EAI vendors Deloitte put on a short list for Florida Rock to consider, which the company ultimately chose, was SmartDB Corp., Palo Alto, Calif. SmartDB's Workbench suite comprises Data Modeler, Data Transform and Data Loader, plus prebuilt transformation and load templates for Oracle applications. "You don't have to worry about coding to Oracle interface tables, SmartDB worked very well," said Ross. "It takes a fraction of time to buy their templates compared to writing the code by ourselves."

Initially, Florida Rock is using SmartDB to migrate its legacy data to Oracle. Down the road, Ross said they will use SmartDB to interface a time/attendance system with Oracle payroll, as well as an industry-unique order-entry system that will also interface with the Oracle applications. "It's a lot easier for us to have a standard tool that people know how to use. If the input or the output side of the tool changes, that will be readily changed in SmartDB," said Ross. "In the past, for the integration points, we didn't have a standard interface utility across all applications."

Ross said that while Florida Rock found SmartDB to be easy and straightforward to use, they still employed the services of Deloitte. "Our people went to SmartDB education. They could've hit the road running. SmartDB is not the problem, it's learning what target Oracle tables look like," he said. "Where the consultant help gets heavy is where SmartDB does not have a template." Deloitte started the engagement in July 1998, and Ross estimates that it will take about a year to complete, with both his staff and Deloitte working 50/50.

Tom Leavy, the Deloitte consultant working with Florida Rock, said it was a resources issue for the company, not so much a skills issue in working with SmartDB. "If you have a technical staff with basic programming knowledge, you wouldn't need consulting" to work with the tool, he said.

And while Florida Rock still had to hire Deloitte, they anticipate that the engagement -- both time- and money-wise -- will be reduced. Using a tool like SmartDB "saves all kinds of time," said Leavy. SmartDB's templates "work pretty much out of the box, are easy to customize, and the price is reasonable. It would cost three to five times what they're selling the templates for, for me to come in and develop them on-site."

Mark Thomsen, co-founder of Alodar Systems, a Torrance, Calif.-based systems integration firm that works with Active Software's ActiveWorks, said, "Most customers need someone to help them get up and running, especially if they're trying a short-fuse project. They don't have the time to understand the product, but the APIs are fairly straightforward."

Once the initial projects are completed, IT shops should
be able to work with the EAI products on their own, said Active's Dempsey. "What we're seeing is customers picking up the skills and extending the integrations on their own. I think people can easily pick up the technology and run with it. We have 80-plus customers at this point, and we're [Active's professional services] working with 10 of those customers. That means 70 of them have those skills and are doing quite well, or are with a partner."

SI partnerships

Partnering with systems integrators -- from the Big Six to regional houses to "boutiques" -- will be critical for EAI vendors' long-term survival. "Lots of guys are playing in this space, and not very many are in an implemented state," said Aberdeen's Fournier. "As the products prove themselves, some leaders will emerge. I would have to think the larger SI houses will cast their eyes on those folks, and put them on their short list. Partnerships will be the key to moving forward, not just services partnerships, but other technology relationships; for example, relationships with messaging vendors, data translation vendors, process flow vendors. I see that as being a key thing happening over the next year."

A good example of a deep relationship in this area, said Fournier, is the IBM-Neon-Oberon relationship. "It's a very good example of what needs to take place. IBM, Neon and Oberon cover that gamut -- Neon with transformation, Oberon at the higher level and IBM at the lower level. Plus, Neon and Oberon get people from IBM with IBM's services component."

Duncan Donahue, director of implementation partner programs at Cambridge, Mass.-based Oberon Software Inc., agrees. "As the EAI market matures, we will see a much closer alignment of systems integrators with selected EAI vendors, depending on their strength. We see a trend with integrators where they're developing internal EAI teams with product expertise."

Which systems integrators, and how many, an EAI provider partners with is also a selling point for potential customers. As a result, EAI players are aggressively going after SI partners. "We get a call from CrossWorlds like clockwork once a week," said Alodar Systems' Thomsen. "Vitria [Technology Inc., Mountain View, Calif.] is interested, but they're high on prequalifying."

Alodar Systems has chosen to work closely with Active. "Since we're trying to develop a methodology in this area, it's hard enough to do with one [EAI product]. They're sufficiently different that we don't see ourselves going more general," said Thomsen. "As of the beginning of this year, we settled in to work directly and specifically with Active. I think we made the right decision. It's hard to get support [from an EAI vendor] unless you're reasonably exclusive."

In contrast, Primix Solutions, said Selland, has relationships with six or seven EAI vendors, including Active, Forté Software Inc., Oakland, Calif., Iona Technologies, Dublin, Ireland, Vitria, and Stockholm, Sweden-based Frontec AMT. "Different tools are appropriate for different projects," he said. Primix's relationship with Frontec is fairly young, but one of the things the SI likes about the AMTrix product is its versatility, particularly for integrating the supply chain. "One of the things Frontec can do is external integration. Of all the products, at most a handful have started to address that space; most are tailored for internal use. Frontec can do both. The product is also robust and mature, and it's out there working," said Selland.

"It's the Swiss Army approach, with a set of tools to integrate anything to anything. It might not be the best tool for any particular job, but it can be used for just about anything," he added. "From a corporate perspective, Frontec is a substantial vendor. It's a $100 million company, it's been around a long time, and it has blue chip clients."

For systems integrators, these tools have appeal for their own practices as well. While the efficiency gains are passed along to the IT client through lower costs and faster engagements, the knowledge base can be "productized" for future clients. Said Deloitte's Leavy about SmartDB: "What you package is the knowledge to build these initial prototypes. The knowledge base is portability; you have the ability to become productive quickly, so you can go into the next client and pay attention to their specific needs without jamming methodology down their throats."

What you'll spend

Integration costs promise to be less with EAI solutions, but just how much less? Estimates range from a license dollars to consulting/integration expense ratio of 1-to-1, to a ratio of 1-to-3. Aberdeen's Fournier said she "thinks the services component will clearly grow with these initiatives. For every dollar spent on software licenses, you can probably expect $1.25 to $1.50 to be spent on professional services to implement that solution." She added that services expense will likely include consulting from both the EAI software vendor and an independent SI house.

While it is too early to determine the ratio of license to overall professional services costs for an ActiveWorks implementation at IP provider Level 3 Communications, Greg Sparks said he is pleased with the services rates he has gotten so far from Active. Denver-based Level 3 is using Active to integrate a Clarify customer management package with a Keanan order-entry application. After his people are trained, however, Sparks does not expect to be dependent on Active services. "Active is working hand-in-hand with us. They're bringing their professional services people on-site, and are mentoring and training our own people, which is a philosophy we like," said Sparks, architect of architecture, data and technology at Level 3. "We don't want to be dependent on high professional services rates. We'd rather have the knowledge and expertise in-house. But because of the place we are as a company -- just beginning to grow and build employees, especially in IT -- we knew we would be dependent on Active's professional services arm."

At Whirlpool Corp., Benton Harbor, Mich., the implementation costs for CrossWorlds were a little higher than anticipated, but still cheaper than custom coding, said Bob Briggs, manager of production support for ERP. Whirlpool chose CrossWorlds because it had the tightest relationship with SAP and Trilogy, the applications the company wanted to integrate.

Including Briggs' own staff, CrossWorlds' services and Deloitte Consulting, the project took about 4,000 hours and close to eight months. Briggs said their software license to services ratio was 1-to-1.5.

Whirlpool went live with the implementation in December 1998. The payback, said Briggs, will likely not be immediate with this first project, but will show up down the road with savings in total cost of ownership and future integrations. "We weren't expecting a big bang up front. I knew the initial implementation was almost a wash on the first year," he said. "The total earned value is on three years, when we go to a new version of SAP, and [CrossWorlds] is able to keep the interface live for us."

Now that Whirlpool has obtained the CrossWorlds skills, Briggs anticipates the ratio of license to services will flop on future integrations. For labor costs on this first implementation, Briggs said at least two-thirds was CrossWorlds and Deloitte, and one-third his staff. He expects that for the next effort, his staff will pick up two-thirds of the labor and will contract out the remaining one-third. While he said they probably could do it on their own, without SI help, "we probably wouldn't, especially on the next one. We're a manufacturer, not a software development house; we have limited [IT] talent."

Alodar Systems' Thomsen has even greater hope for the license to services ratio. "What we're at today is a 1-1 [ratio]; I want to get it to a 2-1 [ratio]." Even with today's ratio, though, Thomsen said IT shops will see savings. He said shorter time to integration "is one factor with clients, but once they discover what they can achieve economically with these integrations, and they start to multiply by time, they'll see the advantages."

While Aberdeen is projecting that companies will spend $1 billion on EAI solutions by 2001, Fournier said "it too premature to say what they'll save" in integration costs. "But they'll definitely see ROI because they're bringing automation in," she noted.

Careful where you put your eggs

One by-product of an early market is products that are not as robust or mature as they probably will be over time. EAI customers interviewed for this article would like to see more collaborations or prebuilt adapters for packaged applications, more functionality within those
integrations, and more robust software developer kits for legacy integration.

Another by-product is that young products are often the creation of young companies -- and there are many young companies in the EAI market. This can have its advantages, such as more vendor attention and greater investment in ensuring customer success. But hooking your star to a young company can also be risky, especially in terms of their long-term viability. Early users do seem to be building in safeguards, though.

Level 3 Communications, for example, bought Vitria Technology's BusinessWare product in addition to Active's ActiveWorks. Each product will integrate different applications, and Level 3 has built a bridge to let the two products interchange events. The reason, said Sparks, is that these "are young companies, EAI is a developing field, and we had to decide whether to put all our eggs in one basket. There was so much work to do, we could have both [products] playing and not be stepping on each other."

Plus, he added, "We see Active and Vitria as having different strengths. Active is especially good at getting integrations up and running in a short amount of time, and it's good at data synchronization. Vitria seems to bring more on the process side. Their automator does statistics, and it's more flexible when it comes to coding applications that need to handle integrations. We see Active as more low level, moving data, and Vitria playing at a higher level with business processes."

Sparks said the company was also "very careful in its selection criteria. We looked at several EAI vendors, and went with two of the bigger ones. But we also looked at what they had done in the short time they'd been in existence, what customers they already had and successful deployments." He said they also examined the founders' backgrounds, met with them several times and did pilot projects.

Still, there is no guarantee that any vendor will be around forever, especially in an emerging market. Said Alodar Systems' Thomsen about his firm's EAI vendor evaluation several years ago: "About one-third of what we surveyed doesn't exist anymore; and now there's probably a dozen more we'd have to add."

Bearing this in mind, Florida Rock Industries' Ross has his own insurance policy for SmartDB: "The product's in escrow."