The Fab Five

Integration specialist teams - with concentrated expertise and authority - are making over systems integration at more and more companies

Reader ROI

  • How companies are benefiting from integration competency centres
  • Competency centre models and core skill sets
  • How to overcome resistance from IT project teams
  • It was the crazy holiday season of 2001 that pushed Best Buy's IT department over the edge. Years of allowing different project teams to do their own integration had left the $US24.5 billion retailer's infrastructure plagued by an unstable mass of disparate application programming interfaces. At peak times, disk space filled up and servers crashed. To weather outages caused by the overloads, the IT department was forced to manually transmit messages - prices, product descriptions - over the sales system and baby-sit the network 24 hours a day. "The environment was unstable and unpredictable," says John Schmidt, Best Buy's director of integration. "It put the business at risk."

    The upside of that challenging holiday, Schmidt says, is that it pushed the company to finally move its long-simmering idea of building an Integration Competency Centre (ICC) to the front burner. By the end of 2001, then Best Buy CIO Marc Gordon had hired Schmidt, a veteran integration project consultant from American Management Systems, to oversee the ICC's creation.

    As happened at Best Buy, ICCs are becoming the go-to groups within companies that need an extreme makeover of their traditional, project-to-project integration approach, and a cure for the proliferation of anarchic, redundant hardware and inefficiencies. ICCs, with their specialized "integration artists", provide reusable, documented integration interfaces; set common integration technology and data definitions; and offer internal integration consulting expertise to project teams. The payoff, CIOs say, comes from lowering the number of staff hours devoted to integration programming by weeks - even months - and increasing the reuse of application interfaces and processes by 30 percent to 50 percent, thereby reducing integration costs by millions of dollars.

    ICCs aren't a new idea. Back in the late 1990s, telecomms giant MCI morphed its middleware group into one of the first formal integration teams. Big companies such as Waste Management, Pfizer, Hewlett-Packard and Toyota followed suit. Since then, the integration challenge, fuelled by increasingly complex systems and processes, has become a costly burden for most companies. In CIO's "The State of the CIO 2004" survey, CIOs chose integration as their number-one technology priority, ahead of security and customer relationship management. Today, a third of all corporations with sales over $US1 billion have ICCs, a 25 percent increase from 2002, according to Gartner. About half are expected to have one by 2005, says Gartner. "Enterprises are starting to realize that their integrations efforts are piecemeal," says Gartner analyst Roy Schulte. "The costs of fragmentation are becoming more apparent."

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    What Are These Things, Exactly?

    ICCs are often compared to a utility, such as the phone or electric company. They range from the lone part-time person, in smaller companies, who drafts suggested application integration standards, up to a 25-plus-person crew that oversees and performs all project integration work. The type of ICC chosen by a company depends on how chaotic its integration efforts have been and how strong its commitment is to change. Companies that want to take the bull by the horns favour one of two models: a central services approach, in which the ICC acts as a full-service hub that does most of the integration work for the company, or a shared services model, in which the ICC serves as a consultant or help desk for project teams that continue to do the integration work themselves. (For more about the models, see "Four Types of Competency Centres", page 99.) Best Buy runs a full-service centralized ICC. "We considered other models - having a smaller group that works by influence, and sets standards," Schmidt says. He decided using such models would take longer to yield benefits.

    While CIOs often play a supporting role, providing help during the early days of an ICC and lending ongoing support and evangelizing projects, they aren't typically involved in day-to-day management. Project architects - big picture thinkers who design new systems - are often the people who start and manage ICCs.

    For the ICC staff, breadth of application experience is more important than depth because of the number of computing platforms, operating systems, languages and components an ICC staffer needs to know. According to integration consultant Clint Petty at Commercequest, the nucleus of any ICC should have at least five fundamental skills sets represented (see "Fab Five Who's Who" left).

    Most ICCs are staffed by three to several dozen full-time people. Best Buy's ICC, which is on the larger side, has 100 to 150 people - most of whom are located at its headquarters - up from the original 12 when Schmidt formed the group. The group can bulk up when it needs to, by enlisting on-call employees in the IT staff.

    I-Teams in Action

    Best Buy's ICC is currently providing its expertise in a $US1 million payroll system project. Prior to the ICC's formation, the project team would have had to sit down with other functions and departments to figure out how they would interact with the system. Then, individual developers would build as many as 80 interfaces, using whatever tools they wanted. Today, the payroll development team subcontracts with the ICC to design, build and maintain standards-based interfaces, paying the ICC about $US100,000 for its services. A year from now, if Best Buy should contract with a new bank for payroll, the ICC will reuse or rebuild the payroll interfaces, without the developers having to get involved.

    In addition to covering its costs through chargeback, Best Buy allocates about 1 percent of its annual IT budget to fund the ICC. The integration squad is subdivided into four teams that contribute specialized expertise on any given project. A solutions delivery team builds the integration applications. A data exchange administration maintains the middleware (Best Buy has standardized on Informatica's Power Center data integration software platform to manage information from different data sources). A third team designs and builds reusable frameworks and enterprise business objects, including all of Best Buy's Web services. The fourth group oversees meta-data management.

    Another ICC adopter, ING Financial Services, was formed through more than 20 acquisitions and now has 27 business lines, with divisions located across the Americas. Like many companies grown by MA, ING's most serious integration challenge came in defining its data. A term as simple as "sale" is defined six ways within different departments; it could mean a sale logged at the day's market close, or it could be any instance of money being logged into the system. Because all the data was defined differently and stored on different servers and databases, it would take a month or so to manually pull it and build one customer report. "We had no view of who our customers were and no way to get that information out," says Paul Donovan, ING's CIO.

    ING responded by building five integration "hubs" that align with and serve its institutional, retail, broker and corporate financial business lines. Within a hub, the integration teams manage the data definitions for data repositories, ranging in size from a couple of hundred gigabits to 10 terabytes of data, according to CTO Raymond Karrenbauer. Now, employees can quickly search through pension data stored in 600 to 700 fields to build predictive marketing reports, for example, or do a profitability analysis.

    ING's approach to the work is a hybrid between the centralized and shared services ICC models. Part of the data-defining work is done by 10 to 12 full-time ICC hub employees; the rest is handled within the business units, where project teams that have a better grasp of the business problems work alongside ICC staffers, who lend their deep skills to areas such as data modelling. A development team in Canada, for example, recently defined the data structure of insurance claims, with coaching from the ICC. With the ICC's coaching, the Canadian team was able to develop the data structure so that other geographically based business units can reuse it, says Karrenbauer.

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    More Carrots than Sticks

    The biggest threat to ICC success comes from within the ranks of IT - specifically the project and development teams. It can take months to gain the respect of established IT project teams that are typically on tight deadlines and have their own methods. An ICC, they believe, will slow them down. "The biggest problem these centres have is leakage," when project teams circumvent the ICC, Gartner's Schulte says. "The more leakage you have, the less benefit you get from the centre."

    The key to stopping leakage is starting small and building credibility with early wins, proving that integration can be done faster and cheaper with the ICC's help. When Nextel Communications started a business systems overhaul in 2000, its nascent enterprise application integration team trod lightly. "We picked off one interface in this critical project that gave us visibility but not enough to put us at risk," says Tom Deffet, Nextel's technical director of IT architecture. Deffet's task was to develop the methods and standards for connecting part of the company's Web site to its outsourced billing system. Deffet and five others who started the EAI team functioned largely as consultants, providing standard code that simplified how applications would interact with the company's IBM MQSeries middleware. The results were positive, and the team built its reputation from there. Now, most integration work at Nextel is done by a centralized 50-person ICC.

    Some companies mandate the use of the ICC for integration projects, yet they seem to prefer persuasion to force. "We try to demonstrate added value, cost efficiencies and [how the centre] makes it easier for teams," Schmidt says. "Once people come to us once, they say: 'This is pretty good. They're easy to work with.'" Best Buy also uses five- to 10-question e-mail surveys after every project to make sure the internal client was satisfied with the ICC's work. Still, Schmidt says, the ICC isn't 100 percent accepted. "It's an ongoing battle," says Schmidt. "It's an issue of control," with some project teams pushing back or circumventing the ICC. Nobody gets fired if they snub the ICC, Schmidt says. But their project might not get funded. "There have been times when projects have been blocked or replanned because [teams] won't do it a certain way," he says.

    Success Stories

    The rewards of a successful ICC outweigh the costs. Many companies find that - other than employee salaries - there are few up-front costs to start an ICC, since it's largely completing work that would have been done by project teams anyway. In addition, centralized ICC teams - such as Best Buy's and Nextel's - bill back departments for the work they do, offsetting ICC overhead costs.

    CIOs who have not crunched the ROI numbers often say the savings from an ICC is simply the difference between building the same thing once instead of 10 times.

    At ING, Karrenbauer says that 30 percent to 45 percent of common components and servers, software assets, data models and best practices are now reusable within the company's five hubs. That means IT can take a cookie-cutter approach with the code it uses to move data from one database to another, or with the rules it uses that govern how that data moves within the network. "Conservatively, when all 10 hubs are up we'll be in the range of 60 percent to 65 percent reuse," he says.

    Best Buy also reports that development costs have decreased. Three years ago, building an interface cost the company $US25,000 for the five or six weeks of labour alone. Now, it costs about $US5000 per interface and takes less than a week. The company has built about 800 interfaces in two years, Schmidt says. Teams are also no longer buying separate hardware to run their own middleware, and Schmidt was able to eliminate nine of 21 servers that the company already had, saving Best Buy $US300,000 per year.

    Best of all for Schmidt, the ICC helps him get some sleep during the holidays. "We had a perfect last holiday season," he says. "My pager didn't go off at all. I said: 'That's it. We've arrived.'"

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    The Fab Five Who's Who

    A typical integration competency centre would be manned by specialists with essential skills and discrete tasks, as in the following cast of characters:

    The Master Architect

    The big thinker, with the viewpoint and skills to conceive models for the enterprise's integration environment. Makes certain integration models comply with application security positioning. A good knowledge of the overall direction of integration technology.

    The Project Manager

    A good communicator. Able to cross organizational boundaries to run or consult on integration projects. Understands how to connect applications within the existing infrastructure. Possesses a strong knowledge of middleware.

    The Applications Expert

    Understands integration applications, Web services and application program interfaces and how to develop them. May also function as the team dictionary - fluent in creating and maintaining meta-data and showing others how to use it.

    The Technical Whiz

    Equivalent to a technical lead on the development side. Has the deepest understanding of the intricacies of integration software.

    The Director

    The corporate face of the competency centre who represents it to the rest of the company. Doesn't run projects, but handles the administrative end, including the budget.

    Source: Clint Petty, consultant, Commercequest

    Copyright © 2005 IDG Communications, Inc.

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