Business and system integration

E-Business & Business Systems Integration Define EAI, ERP, message broker, application server Discuss the need to link business integration with

system integration Discuss the history of business and system

integration Discuss the characteristics, advantages and

disadvantages of ERP and EAI Compare and contrast ERP and EAI as integration

solutions Discuss the application of ERP and EAI to E-Business

XML and Databases

Types of Databases XML-Enabled Native XML

Types of XML documents Data-centric: use software built into database or

third-party middleware to transfer data between XML documents and databases

Document-centric: use Content Management Systems; store content fragments (procedures, chapters, glossary, entries)

XML- Enabled DatabasesXML is not stored internallyUse relational or object-oriented modelsUse middleware

To store: accepts XML, parses it into chunks that fit database schema

To retrieve: piece back togetherDon’t retain XML’s hierarchical structureTranslation needs considerable processing,

especially for large or complex documents

Native XML XML is actually stored as XML internally

new; questionable scalability; performance No need to translate between XML and database

Can either store entire document in text form structure of document to database (i.e., map DOM to

tables like elements, attributes, text); don’t need to know schema (DTD)*

map structure of data in the document to the database (i.e., orders, items, and parts tables in sales order)

Business Integration M. Lynne Markus: CAIS 4-10

Creation of tighter coordination among discrete business activities conducted by different individuals, work groups or organizations so that a unified business process is formed.

Needs to be linked to systems integration

Why Integrate Business?Decentralized company with different

product lines Multidivisional petroleum products company Elf

AtochemDistribution company with offices in many

geographic locations selling the same product at different prices Cardinal Health

‘Available to Promise’ Hewlett-Packard and ‘global inventory visibility’

History of Business Integration

Reasons Phenomenal growth of small companies after

WWII Decentralization

Counter forces Business process reengineering - BPR Supply chain management - SCM Customer relationship management - CRM Y2K

Systems Integration

Creation of tighter linkages between different computer-based information systems and databases

Often required for business integrationMany e-commerce orders had separate

system for trackingOne solution: software bridge or interface

Broad Systems Integration Solutions

Enterprise Resource Planning System (ERP) or Enterprise System SAP R/3, Oracle, PeopleSoft, JD Edwards,

BaanEnterprise Application Integration

(EAI) ‘Re-architect’ the system Requires middleware

Definitions

ERP - A large highly complex software program that integrates many business functions under a single application; uses common database

EAI - A set of technologies that allow the movement and exchange of information between different applications and business processes within and between organizations; middleware focus

ERP

70% of Fortune 1000 companies have either begun implementing ERP or plan to do so in next few years

Link multiple functions, i.e.,logistics, human resources, accounting and financials, sales, distribution

Use a common databaseOriginal focus on internal integration

Advantages of ERPConsolidates business functionsintegrate broad range of disparate technologies, along

with the processes they supportCreate a new foundation on which next-generation

applications can be developedReplace creaky legacy systemsExcellent internal data and process integrationProvide greater controlImprove integration of decisions throughout organizationImprovements through adoption of best practices

Disadvantages of ERPOften requires extensive organizational change - hence

business involvement in justification and implementation

Some processes are not supported by ERP; some legacy systems are usually retained

Does not provide integrated reporting and analysis environment for internal and external data

Very expensiveAppropriate implementation strategy is neededBusiness units must use common data names and

business processes

ERP ApproachesCustomCommercial off-the-shelf (COTS)

Cheaper Faster to avoid outdated systems Reflect best business practices Software development is core competency of

vendor Not designed especially for organization No competitive advantage Example: SAP/R3

Future ERP Directions

Components, not modulesIncremental migration, not massive

reengineeringDynamic configurations of ERP, not static

configurationsManagement of multiple strategic

sourcing and partnership relationships more supply chain planning more e-business interfaces

EAI‘Re-architect’ systems so that an intermediate

layer is created between applications programs and databases

Application programs are modified to ‘call’ the middleware, which then ‘calls’ the databases

Middleware focusLimited business process change required35% development time is devoted to

interfaces; EAI focuses on interfaces

Advantages of EAI

Allows particular program to be replaced without changing the database

Reduces maintenance; only interface between each program or database and middleware needs to be maintained

Achieves internal data integration and supports process integration without replacement of legacy systems

Supports ‘best-of-breed’

Disadvantages of EAIStill in ‘shakedown’ stage (less mature than ERP)

vendor proliferation ‘experimental’ support for n-way integration

Requires vas amount of technical expertiseMore difficult for multiple applications (though

works well with pairs of systems)Requires some modification of source systemsProcess integration requires organizational

change and business involvementProprietary technology (not open)

Future EAI DirectionsMovement away from point-to-point solutions

(message queuing or remote procedure calls) to multipoint solutions (message brokers, application servers) Application servers + message brokers

Missing link in supply chain integration and interorganizational ERPs

Zero Latency enterprise: any application (or transaction) has access to any other application or data store instantaneously

Application Servers

Servers that provide not only for the sharing and processing of application logic, but also the connect to back-end resources usually provide mechanisms to deploy

application to Web platforms Nothing new

Message Brokers

Intelligent intermediary tat directs the flow of messages between applications provides rules processing, intelligent routing,

message routing, message warehousing, and message transformation services

middleware of middleware asynchronous store and forward (application

need not be session connected)

History of Unintegrated Systems

1982 - mirage of integrated systemsBusiness need for integration not perceived‘Management by magazine’Capacity constraints of early systems

systems built to serve small parts of business computers were extremely expensive

Integrated enterprise systems only address 70% needs of average organization

Internal data can’t satisfy all needs; External data is often purchased

Integrated Systems for E-BusinessSell-side e-business tools

CRM software data mining electronic ‘storefronts’ Call-center management software

Buy-side E-business tools SCM software Procurement software Exchanges

Interorganizational purchasing exchanges for commodity products

Exchanges for trading partnerships

ERP is the backbone of E-business (Kalakota & Robinson, pg. 166)

ERPs and E-BusinessERPs have had internal not external focus

slow to react to sell-side and buy-side ecommerce

Need for ERPs to interact with other ERPsHow to link? (in-house, ERP vendors, single source)PeopleSoft

Significantly less proprietary than SAP Like SAP uses standard relational databases PeopleSoftEDI interface helpful for business data

exchangeSAP

SAP and E-BusinessOriginal SAP R/3 did not contain interfaces to

interact with other systemsOpportunities for B2B integration through Business

Application Programming Interface (BAPI) standardNiche systems

Supply Chain Cockpit - SCM Enterprise information portal - mySap.com Setting up exchanges for vertical industry groups -

mySap.com

May not be wise to install SAP in companies with acquisition strategy

EAIs and E-BusinessInter-Enterprise Application Integration

EAI is good at integrating various applications and data stores

can extend its reach outside the enterprise to include both trading partners

link ERP systems (i.e., SAP and Baan) Saturn: suppliers must tie into their systems

Focus on major business processesExtend systems to suppliers and customers

must agree on communication standards and middleware

Business and System Integration

Need to link New focus on business

disintegration? Virtual Organizations Oursourcing “quick connect, quick disconnect”