Lessons From the Past Impact Business Agility
In boardrooms across the country, e-business has become the number one business initiative. CEOs are accelerating their e-business implementation strategies in the fear that if they don't, they will be out of business or out of a job. However, in the race to implement tactical e-business solutions for short-term gain, companies might actually be limiting their long-term competitive advantage.
In college, I had a professor who was fond of saying that those who do not study history are doomed to repeat the mistakes of the past. Organizations are in danger of doing just that with their approach to e-business. Today, it is not enough to satisfy a customer's demands. Companies must continually innovate, provide new products and services, enter new markets, and decrease business cycle times for implementing new initiatives. In short, what a successful e-business requires is business agility.
Business agility requires flexible and adaptable technical infrastructures—a lesson companies should have already learned. For example, organizations that deployed large-scale, client/server systems soon discovered the fallacy of RAD: There was a vast difference between rapid appli-cation development and rapid appli-cation deployment. Myriad desktop configurations, network protocols and operating systems, as well as the need to integrate information with existing systems, multiple databases and data structures slowed enterprise deployments to a crawl. Many failed. The problem was that each system required extensive infrastructure development. Much of the infrastructure work was not transferable to the next deployment. The majority of the time, effort and resources required to deploy new business solutions was not spent on business functionality. Companies that do not architect their e-business infrastructures for change while deploying tactical solutions are doomed to repeat this mistake.
The need for integrated enterprise infrastructures should also have been learned from dealing with the problems of deploying new application packages. Some ERP deployments took years to accomplish because of large-scale customization. Other organizations decided they should change their business processes to limit customization time and costs, and to speed implementation. But packaged applications can only deliver competitive parity. Competitive advantage requires business innovation which, by definition, cannot be purchased in a package that your competitors can also buy. Companies need an infrastructure that will enable them to extend the functionality of existing systems, and to easily change and optimize business processes.
Success in the information age requires access to enterprise-wide information. Most legacy systems were built as functional silos to meet the needs of a specific business unit. But as businesses reorganized (sometimes multiple times) to better meet customer needs through streamlined business processes, the existing systems running the business no longer mirrored the organization. Systems integration became a necessity to support the new organizational structures and business processes, consuming up to 30% of IT budgets. However, much of the integration work was point-to-point integration. Changes to systems or business processes necessitated extensive changes to implement the changes. To enable continuous business innovation, companies need an integrated infrastructure that reduces the time, cost and effort required to implement new solutions.
Building business agility
The most important lesson we should take from the past is that rapid implementation of new business solutions requires a technical infrastructure that can accommodate business change and support innovation that delivers competitive advantage. Companies need to keep this strategic goal in mind while implementing tactical solutions. E-business solutions encompass a number of different architectures, among them centralized Web-based systems for business-to-consumer (B2C) and business-to-business (B2B) systems, including e-commerce and digital exchanges. For maximum efficiency and effectiveness, both types of solutions require integration with back-end systems. Enterprise application integration (EAI) middleware, including message brokers, is also becoming an essential part of an adaptable and flexible infrastructure.
While few exchanges today offer back-end integration for completely automated e-business procurement, this requirement will become increasingly important in the future. EAI is also becoming more important for supply-chain solutions. Supply-chain integration requires defining and managing business processes that cross organizational boundaries. While packaged supply-chain solutions, including i2 and Manugistics, have been widely deployed, more general process management and integration solutions are also starting to fill this role. IBM, BEA, Extricity, Vitria, STC and other companies include process management and workflow solutions as part of their integration infrastructure. IBM and BEA are beginning to integrate process management and systems integration functionality with their Web servers, thereby creating a platform that is standards-based, extensible, and suitable for multiple types of e-business architectures and solutions.
Point-to-point B2B messaging is also part of the overall e-business architecture. EDI systems will continue to be part of the architecture, even as companies transition to XML messaging. Over time, the e-business architecture of large companies will include all of these architectures: centralized hubs for e-commerce and B2B exchanges, distributed process management for supply-chain integration, as well as point-to-point B2B messaging, including EDI and XML. In the future, they are also likely to add distributed e-services.
If this is starting to sound complex, that is because it is. Companies will only increase complexity, reduce manageability and inhibit long-term adaptability by building each of these solutions on a tactical basis, without regard as to how they fit into the overall e-business picture. Long-term manageability and adaptability requires a strategic approach and an infrastructure with open and extensible components that can be utilized for multiple e-business solutions.
The essential components of an adaptable e-business infrastructure include a common messaging backbone that includes publish-and-subscribe capability, message translation and transformation, intelligent message routing, application adapters, application servers for deploying new functionality, and workflow and process automation. Also included is centralized end-to-end management of the entire infrastructure, including message-level management, process management and optimization, enterprise data and knowledge management, and the capability to manage change over time, including impact analysis of change.
Lessons from the past have taught us that enterprise architecture management enables business agility and decreases spending on IT infrastructure functions that add business value. Even when deploying packaged solutions, companies should choose technologies and implementation strategies that build an infrastructure that is adaptable and extensible, and can be utilized for multiple e-business solutions. In that way, e-business integration infrastructure technologies can increase long-term competitive advantage and enable business agility.
Beth Gold-Bernstein is vice president of Strategic Products and Services at ebizQ.net, an e-business integration content portal in White Plains, N.Y. Contact her at [email protected]