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Public Council Teleconference: Application Rationalization — Hidden Costs and Smart Decisions
November 17 at 11:00 am US/Eastern (GMT-5)
Join Honorio Padrón, of The Hackett Group, who will share the drivers for companies to tackle application rationalization and the results of research that define the hidden cost of complexity. Additionally, we will discuss key decision milestones—to start or not, holding the course steady and fulfilling expectations.
Virtual Desktop Cost-Benefit Analysis — Michael Jacobs, Catlin Group
The analysis contained in this presentation measures the cost of everything from the machines and licenses to the infrastructure for virtual vs. traditional desktop environments.
Honor your best senior team members - Apply for the CIO Ones to Watch Award
Get well-earned public recognition for your top up-and-coming team members, your IT organization and your enterprise. Award winners will be announced, publicized and feted in May 2010, great timing to help attract new IT recruits to your company.
Learn more about the CIO Executive Council »January 15, 2002 — CIO —
If you order speakers from Bose, your order goes into a system CIO Robert Ramrath calls the Common Order Interface. Ramrath’s group knit this custom framework together about three years ago. Two legacy call center applications, plus a Web commerce app built mostly with Microsoft tools, are all linked to an underlying database and connected to the corporate back-office ERP system?so your order winds up in SAP regardless of how it was placed.
That’s the kind of setup for which enterprise application integration (EAI) tools were born. EAI software connects applications through a central message-routing hub, similar to middleware tools like IBM’s MQSeries. However, EAI tools are also equipped to parse and translate data, and automatically route information according to business processes.
Framingham, Mass.-based Bose passed over EAI and built its ordering framework using custom code and SAP’s proprietary BAPI integration language. Ramrath describes the experience as painful; so why didn’t he choose EAI instead? EAI tools were less mature back when Ramrath started his project. The big kicker was that a robust EAI implementation can easily cost half a million dollars. That’s too much expense for a single integration project to bear.
The idea with EAI, of course, is to spread the costs over all your integration projects?CRM, e-commerce, legacy extractions and everything else. That’s a nice idea in theory, but cost-justification spreadsheets are notoriously resistant to theory. "We’re always keeping an eye on EAI tools. They’re expensive, and the only way you can justify that expense is if you look way out" into the future, Ramrath says. "We can see it if we compare the loaded cost of doing [multiple integration projects] ourselves.... But there are a lot of ’what-ifs’ in that cost analysis."
EAI is infrastructure, and cost justification is always a tough sell for infrastructure projects. Taking a long-term view, however, the only thing more expensive is not using these tools or another consistent enterprisewide integration method like .Net or Web services. Yes, EAI’s real payoff is in business agility?the ability to change business processes quickly?but in today’s economy that’s not likely to squeeze a check out of the CFO.
However, big companies such as General Motors report concrete savings of as much as 80 percent on certain integration projects once the messaging hub is in place and reuse of interfaces starts to kick in. Smaller companies have a tougher decision to make, but those with multiple or business-critical integration needs can also experience benefits from EAI. As long as CIOs have a clear-eyed understanding of the up-front costs (including consulting and maintenance tabs), pursuing a coherent integration strategy such as EAI should pay off in the long run.