eBusiness - Integration Issues & Solutions.
eBusiness - Integration Issues & Solutions
Pawan Sud
Victoria University
ABSTRACT
Organisations spend large chunks of their IT budget in implementing solutions to automate their business processes. To some extent, they get some benefits but when they extend their business to other organisations or consumers to form strategic relationships, they face lot of integration problems, which proves to be a major hindrance towards a successful eBusiness. The objective of this research paper is to justify whether People, Processes, Data and Application are really major factors, which retards the growth of eBusiness, and if so, what are the possible solutions to overcome these kinds of limitations.
.0 INTRODUCTION
Today, Internet has changed the way businesses used to operate traditionally. People have realised that it is an efficient and cost effective source for information exchange. Companies use it to market products, obtain supplies, provide customer service, and interact with business partners. This has led to the transition of commerce to eCommerce. Further, companies are trying to collaborate with their business partners and customers to get maximum advantage in terms of reduced inventory, faster time to market, greater process efficiency etc. and call it as collaborative commerce or eBusines. Integration is the true key to convert this vision into reality. (Techguide.com)
To facilitate the growth of eBusiness, companies are deploying numerous technologies and solutions. However, these initiatives are somewhat retarded due to lack of integration in regard to different business processes, multiple data formats, multidimensional applications and last but not the least heterogeneous human resources involved in the whole process.
This research paper discusses about eBusiness, different models of eBusiness and the products & services they offer. It also discusses about various aspects of integration issues and the available solutions to overcome these limitations and investigates the latest technologies, concepts and software's available in the market to minimize the effect of these kinds of limitations.
2.0 E-COMMERCE & E-BUSINESS
According to Turban et al (2002), Electronic Commerce (eCommerce) is a process of buying, selling or exchanging products, services and information via computer networks, including the Internet.
Wigand (2001) says that eCommerce is best described when a "brick-and-mortar" business decides to add a transaction-based Internet application to their business. Brick-and-mortar businesses become "click-and-mortar" businesses when they begin to process transactions and take orders over the Internet to supplement the existing way they conduct business.
However, as per Turban et al (2002), eBusiness carries a broader definition, not just the buying and selling of goods and services, but servicing customers, collaborating with business partners, and conducting electronic transactions within an organisation.
Wigand (2001) explains eCommerce becomes eBusiness when business strategies, internal activities, and corporate practices are taken into consideration while making business processes that an individual company must undertake to participate in eCommerce. An eBusiness is one which is implementing, fundamentally reworked business processes internally and externally to take advantage of information to compete in the distal market space.
He further explains that eBusiness is not necessarily about re-inventing business, although in some cases it could be. It is about extending the business into an entirely new space. It is about streamlining current business processes to improve operating efficiencies, which in turn enhance the value to customers - value that cannot be generated by any other means, and value that gives a serious advantage over competition.
eBusiness can be categorized on the basis of the nature of the parties involved in doing business electronically. If an organization does business direct with consumers or end-users through electronic means, it is called as Business to consumer (B2C). On the other hand, if the other party involved is also a business type, it is termed as Business-to-Business (B2B). Both offer their products and services to their customers.
Business to Consumer means that the primary focus is towards customers and not businesses even though a B2C company may sell to resellers or small businesses.
The examples of products are apparels, automobiles, books, computers & peripherals etc.
The services offered by B2C companies are credit cars & credit rating, directory assistance, insurance, loans, retirement benefits, search engines etc.
In the Business to Business environment, the definition of customer changes. Here the customers are other businesses and not the individuals. Building and maintaining loyal, trusting relationships with partners and vendors is a critical success factor.
The examples of products are office equipments, packaging supplies, software products, used equipment & machinery etc.
Various services falls under this business model - collection services, freight & shipping, Internet hosting & Internet service providers, travel related services etc.
3.0 eBUSINESS INTEGRATION ISSUES
Faragher (2001) states, "Organisations are under greater pressure than ever to streamline the integration of the disparate systems that make up their internal and external networks".
Due to financial difficulties as a result of recession in global economy and a raft of acquisitions and new technology developments, the integration landscape is extremely important for organisations that have tried to implement solutions for maintaining strategic alliances with their trading partners and customers to get maximum return on their investments. Inconsistency in the ability of systems to communicate effectively with each other, sharing data and providing real time information to the right people at right time can prove to be a major retarding factor towards the growth of an enterprise as envisioned by the strategic planning ...
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Due to financial difficulties as a result of recession in global economy and a raft of acquisitions and new technology developments, the integration landscape is extremely important for organisations that have tried to implement solutions for maintaining strategic alliances with their trading partners and customers to get maximum return on their investments. Inconsistency in the ability of systems to communicate effectively with each other, sharing data and providing real time information to the right people at right time can prove to be a major retarding factor towards the growth of an enterprise as envisioned by the strategic planning and management of the organisation.
The existence of disparate systems, differences in business processes, multiple data platforms and heterogeneous human resources involved within the industry has been the major factors that retard the efficient working of the integrated enterprises.
3.1 People Integration
According to Cohen (2002), the major reason for the failure of companies initiatives to implement changes in the business processes is "the lack of understanding of the reason for change and failure to identify the problems" by the employees. Sometimes companies can also face problems like indifferent attitude, fear, resentment, or apathy that might sabotage an initiative.
Hurwitz Group, Inc. (2000) has published a report on "eBusiness portals and Integration", which says that no business can be done alone with machines. People are always required to do the tasks and there should be effective means of communication among the people in a company. Also the success of business often depends on relationships among the employees, customers, partners, and suppliers. The organization should equip these people with "cutting-edge tools to enable them to collaborate more effectively and efficiently." The experience and knowledge of people paired with the right information at the right time helps them make decisions, which are crucial for the success of the enterprise.
Blanchette (1994) acknowledges the survey report conducted by, Towers Perrin and the Hudson Institute and points out that three companies in four are concerned about the challenges of diversity in the workforce. Further, survey report concludes that more than 40 percent fear difficulties because of different values and cultural norms in their workplace. He points out that lack of planning about integration of technology and human resources in the organization leads to confusion, mistakes, loss of company resources, and loss of marketing/sales potential.
Without the support of management and systematic planning before integration, workforce diversity may clash with technology innovations and thereby remain as an organization's unfulfilled dream.
3.2 Process Integration
Organisations desire to get edge over competition and the increasing demands on quality and effectiveness has led to the complex business processes. Business process integration helps to analyse, simulate and optimise processes in order to maximum benefits. Process Integration means design, operation and management of industrial processes with system-oriented models and methods.
Yee (2002) defines Business process integration as "BPI is actually about defining, enabling and managing the exchange of enterprise information through the semantics of a business process view". It describes the flow of information in the context of business processes.
According to Caldow (2001), process integration issues arise when "Cross boundary operations, organizational structures, and information technology systems are not integrated". Also different technology platforms with 'databases and applications' or lack of 'integration technology infrastructure' can prove to be the major obstacles for the integration. To achieve strategic advantage, enterprises need to collaborate 'individual legacy systems, enterprise level applications and breakthrough Internet-based technologies' and make them work for the organization.
3.3 Data Integration
Data collection and integration are rapidly becoming the most important issues in the information systems area. The basic problem is insuring that the vast amounts of data collected by various legacy systems can be used in a meaningful and integrated way.
Lawrence (1999) say's "Most organizations use only a small fraction of the data gathered by their systems for a variety of reasons. These reasons include the difficulty of getting older systems to interoperate with each other, and the complexity of combining many different data sources into a coherent whole".
The integration problem refers to the problem associated with integrating the data from two or more different data sources. Integration is often required between applications or databases with widely differing views on the data and how it is organized. Thus, integration is hard because conflicts at both the structural and semantic level must be addressed. Further complicating the problem is that most systems do not explicitly capture semantic information.
The key to successful systems integration is to integrate, assimilate and manage the data that comes form various disparate systems. These systems include both databases and applications for strategic business operations such as customer relationship management, enterprise resource planning, supply chain management and e-business.
3.4 Application Integration
Application Integration is a process to integrate enterprise information systems with one another. Such systems may be integrated to implement or automate business processes to gain many benefits or just to gather information from various similar or dissimilar systems for a particular purpose. Un-integrated systems are like islands of information, unable to participate in an intra-enterprise wide or extra-enterprise wide business's processes. By integrating them, one brings about the maximum utilization of the data within the 'islands' as well as business knowledge embedded within each system. (Intiqua.com)
Every day, new and enhanced technologies are introduced which are used to make the new and improved applications, which should be able to work in conjunction with the applications already implemented. An integration solution needs to provide a bridge enabling access and throughput between such systems. Also, many applications do not provide standard interfaces through which an integration solution can interact with the application. In fact, many legacy applications do not provide interfaces of any sort. That's where the role of application integration comes.
4.0 SOLUTIONS TO INTEGRATION ISSUES
Hurwitz Group (2000) finds that most of today's software projects involve a significant amount of integration. Some researchers have suggested that in highly complex B2C, or more complex B2B projects, integration work, especially in the areas of process and data integration may represent 75% of the total project cost. To identify integration issues and innovating & implementing solutions is the major challenge for IS/IT departments. There are numerous technologies and applications available that can help in facilitating the business's by taking care of the integration issues.
4.1 Solutions for People Integration Issues
As the business is continuously evolving, business processes also keeps changing. Gomolski (2001) says that organizational changes if not adapted and managed with proper planning and attitude can cause a lot of problems. Human response to organizational changes is essentially emotional and the key lies in how you manage the instinctive reactions. People who gets affected by the changes tends to resist & do not actively participate as they are unaware of the benefits or they do not understand why their 'Old ways of doing things' are not appropriate in the changing scenario. Also, employees are not the only affected agents; organizational changes also affect customers, suppliers, strategic partners, stockholders or the community in which the enterprise operates.
Many companies these days adapt 'Change Management' strategies to overcome these kinds of issues. Change management is the effective management of a business change such that executive leaders, managers and front line employees work in concert to successfully implement the needed process, technology or organizational changes. (Change-management.com)
It acts as a guideline for organisations to diagnose employee resistance, helps employees transition to the change process, creating communication plans and creating training & educational programs. (Change-management.com)
Organizational change management is from the perspective of a manager or project team. It adapts the 'Top to Bottom' approach to analyse the changes required by dividing the whole business process into individual processes, finding the solutions for them and later integrating them together. It focuses on broad change management practices and skills that help the organization understand, accept and support the needed business change. The primary focus is around change management strategies, communication plans and training programs. It provides the knowledge and skills to implement a methodology and tools for managing change throughout an organization.
The involved parties include project team members, human resources and key business leaders that sponsor the change. (Prosci.com)
Individual change management is from the perspective of the employees. Employees are ultimately responsible to implement the change. It focuses around the tools and techniques to help an employee transition through the change process. The primary concerns are the training required to help individuals understand their roles and the actions they take in the change process. (Prosci.com)
Case Study:
Telstra conducted a training program, named Frontline Management Foundation Program (FLM), with the help of IBM's four-tier learning model that blends learning from online reference material, coaching simulations, teaming, online facilitation, collaboration and classroom learning. To develop this learning solution, IBM continuously consulted with Telstra. IBM also deployed this solution at Telstra that includes delivering the face-to-face component, an e-facilitation team to manage student enquiries and a team for overall program administration and coordination.
With the collaboration with IBM, Telstra gained a curriculum, which is highly recognised by the industry and the online component can be used as a reference source for giving training to the employees. The curriculum covers management skills, how managers influence staff and the value of teaming & managing groups. (Ibm.com)
4.2 Solutions for Process Integration Issues
Business process integration solutions provide a platform for interactions across a company's existing applications, data, people and partners to continuously improve one or more strategic business processes. Some organisations use Enterprise Resource Planning systems in conjunction with workflow tools to design and integrate their business processes. Also major software vendors like SAP offers software solutions like 'mySAP' enterprise suite comprising of Supplier relationship management, Customer Relationship management, Product lifecycle management as add ons, which provides the integrated functionality to the enterprise. As mySAP is based on SAP's Netweaver technology, these are able to interact with other legacy application systems through the internet.
Also concepts like 'Biztalk', 'Open buying on the Internet', 'RosettaNet' and more, have been put forth for handling the integration between organizations.
Case Study:
RDM Technology (RDM-T) is a part of RDM holding (Rotterdam Dockyard Company) and specializes in the design and production of (heavy) technically advanced equipment and installations. RDM-T designs, develops and supports submarines, defense systems for land and sea, and components of aerospace and space travel systems. RDM-T also revises and modifies existing equipment.
In order to improve its operational performance, RDM-T redesigned its business processes and upgraded their ERP systems with SAP and mySAP Business Intelligence. For their overhaul projects, which mean that existing vehicles are upgraded, a basic discrete production solution has been realized. This solution is customised for specific business requirements of the overhaul process such as cannibalisation (the use of vehicles as source material), traceability, quality control and documentation. In order to be able to build a new defense vehicle, SAP's repetitive manufacturing solution was also implemented. In short, repetitive manufacturing at RDM-T enables flexible line production of a complex product with minimal administrative effort and clear insight in the status and results of the production lines.
4.3 Solutions for Data Integration Issues
Madsen (2003) says that many organizations implemented ERP solutions thinking that as packaged suites they would solve the data integration problems. Though, many do provide real time data integration within a single ERP system, but when organisations extends to other business's they face a lot of problems due to different technologies and data formats. Further, to make one system understand the data from other systems, raw data needs to be normalised, put into a common format, or combined with other information.
For this, universally accepted technologies like XML (eXtensible Mark-up Language), SOAP (Simple Object Access Protocol), WDSL (Web Services Description Language) & UDDI (Universal Description, Discovery and Integration) etc are used for the development of Web Services.
Craig (1998), in his article mentions that CORBA, COM/DCOM and DCE are other middleware technologies used to send information between systems, but they typically invoke application code on remote systems, rather than sending data.
Data marts/Data warehouses are also used where data from different sources is collected, organised in a universally accepted format so that it can be quickly retrieved and efficiently analysed and later used for data mining, OLAP & other analytical processes.
Case Study:
Southwest Gas Corporation (SWG), situated in Las Vegas, NV, is a natural gas distribution company in the United States. SWG acquired 65,000 new customers in 1999, for a total of over 1.2 million residential, commercial, and industrial customers in Arizona, Nevada, and California. SWG's, customer-billing information such as payments and customer history resides in IMS database on a mainframe server. This data has to be copied to Oracle database on distributed server to provide access to customer service representatives. Earlier they were doing it through custom-made batch data communication processes but that was a very time consuming process. To automate this, they implemented 'DataMove' & 'ChangeDataMove' data integration software's from BMC Softwares. It reduced SWG's data upload time from 24 hours to 4 hours. (Bmc.com)
4.4 Solutions for Application Integration Issues
According to Reese (2003), application integration issues can be resolved by adapting solutions offered by EAI (Enterprise Application Integration). EAI refers to the process of connecting different applications to allow information to flow between functions within an inter/intra enterprise. Reese stresses on the point that EAI is different from middleware, the actual software that connects applications. He says, "It's not just moving data from one place to another rather, it's the process of taking data that has been taken from databases, applications and portal sites, transforming the data so that a target application can understand it, routing the data based on the content if necessary and perhaps ensuring that the data conform to a particular business process".
Case Study:
Sony Broadcast & Professional Europe (BPE), subsidiary of Sony Corporation, Japan, handles the sale of products for professional use and the related services, from the complete outfitting of professional television and sound studios to the link-up of video printers to medical equipment. Since the product range exceeds over 3,000 articles, which are produced in Japan, Supply Chain Integration is considered a major business opportunity and a significant intercontinental management challenge.
To improve the efficiency and service level of the separate country organizations, Sony has implemented a pan-European business model. This is based on a direct delivery concept: instead of local stock, direct dispatch from a single, central distribution centre. As a next step, Sony BPE hired Magnus to assist in an ambitious supply chain integration project that was part of the implementation of a Global Inquiry Reservation and Order System (GIRO). The objective of the GIRO implementation was to link the factories in Japan to the local sales organizations, so that the factories can directly respond to the (changing) demand for their products. Working together, Sony BPE and Magnus redesigned and integrated the relevant European supply chain processes. (Magnus.com)
5.0 CONCLUSION
Organisations have learned that mere implementing automated softwares is not sufficient. They have to perform their businesses in close conjunction with their customers and trading partners. A lot of information exchange is required between the two parties who form such alliances and Internet is the most convenient, efficient and cost effective medium, which has ultimately led to eBusiness. However it involves a lot of complications and integration is the major concern to fulfil the desired results. Integration, be it in differences among the human workforce, different business processes, data or multi dimensional applications, is the most critical factor and proper planning and effective implementation of the solutions is the only way out.
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