The ROI of Application Integration

By Sari Kalin

PAGE 3

To wit: Each time an interface is reused, the company saves 200 hours of coding time. That means IT projects are getting out the door faster, says H. Anthony Hai, senior vice president and director of project services. In 2001, the IT department slashed its project completion time by 45 percent; much of that gain was because it had reused interfaces (projects don’t need to wait anymore for the one programmer who understands the intricacies of how to get X information out of Y legacy system?any programmer can just point to an existing interface). It also means that development costs drop: In 2002 alone, rather than writing new code for every connection between applications, National City expects to reuse 109 existing interfaces and save $1.9 million.

That’s not the only benefit. By reusing interfaces, Hai says, National City can ensure that customers receive the same information, whether they call on the phone, visit a branch or log on to the website.

By using and reusing standard interfaces, the hope is that National City’s legacy rat’s-nest will begin to resemble a modern, streamlined computing environment. Hughes also hopes for a smoother road when any system needs to be replaced?with a lower price tag too. "My expectation is that EAI could save us at least 25 percent if not 50 percent of the cost [of the legacy systems upgrade]," Hughes says. "More important, it’s going to dramatically reduce the risk. We’ll have reusable components that are tried and tested."

Cabot: United We Stand

Integration project: Revamp front- and back-office business processes worldwide, supported by standardized and integrated enterprise software systems

Enterprise payback: Global sharing and reporting of information; better service to global customers; e-business enablement

IS payback: Get better deals from vendors; savings on development and maintenance

Specialty chemicals company Cabot reorganized four years ago into global strategic business units. But its data behaved otherwise. Why? Because each of the old business units marched to the beat of a different drummer when it came to their organization, software systems, data models and fundamental business processes.

This lack of standardization hampered Cabot’s plan to set up shared finance, HR and IS services within each geographic region. "We had multiple customer numbers for the same customer," says Craig Bickel, a Cabot vice president and its CIO, who works in the $1.7 billion company’s Boston headquarters. "We would have had to have a call center person run three or four distribution systems, depending on what customer would call them" and what product the customer asked about.


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