Interview for Cisco customer magazine (2001)

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Supply-Chain Management
Integration Means Getting in Sync
If you want to integrate with partners, you'll need to get your own enterprise in sync first. Enterprise application integration is the way.
By Talila Baron

Article Contents:
Article Summary:
For businesses focusing on Internet-based customer relationship and supply chain management, enterprise application integration (EAI) is crucial. EAI can bring together geographically and technologically fragmented business units, consolidating tasks like order fulfillment, product management, and customer support. Further, for multiple partner applications to communicate, interenterprise integration (IEI) is needed, and IEI is best incorporated as an extension of EAI. Effective electronic trading and collaborating demands a platform that integrates multiple back-end systems without revealing a company’s complex processes, and EAI makes that possible.
If doing e-business were as simple as sharing data with just one other company, it wouldn't be a problem. But the reality is that business relationships today are not one-to-one, they're many-to-many. Moreover, many companies now realize that interenterprise integration (IEI)—communication among partners' applications—must be an extension of enterprise application integration (EAI), which links all of an enterprise's disparate technologies and geographical locations.

Industry analysts say that rather than implementing redundant IEI and EAI infrastructures, forward-thinking companies will take full advantage of existing EAI processes and technologies, augmenting them with customized IEI infrastructures where necessary.

EAI Is Increasingly Critical
According to the META Group, EAI will provide the backbone for e-business initiatives through 2005, becoming particularly critical in organizations focused on customer relationship management (CRM) and supply-chain integration.

That's because EAI provides a basis for organizations to create a seamless view of their enterprises for suppliers and trading partners. It extends the boundaries of an enterprise while hiding the complexities of a company's processes and systems; and it lets companies take advantage of emerging industry standards that enable collaboration.

"EAI and IEI are ways of solving familiar problems," says John Whitehead, business development manager for New Markets and Technologies at Cisco Systems. "As one partners with more companies and tries to execute transactions more quickly, one must automate systems and processes that can scale to handle the complexity." To be competitive, says Whitehead, you need a structured and integrated foundation that allows you to optimize operations.

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EAI and E-Marketplaces
Today's e-marketplaces play an important role in supply-chain management and electronic procurement. These online communities bring together groups of buyers and suppliers in a secure environment. By managing the flow of information and necessary resources, they can get goods produced and delivered within a certain time frame while meeting exacting customer specifications.

But getting the most out of e-marketplaces means first implementing EAI, says Brad Sills, strategic alliance manager with Ariba, a business-to-business e-commerce platform and network services provider. Ariba has recently announced partnerships with webMethods and Tibco Software—the two companies will provide EAI for Ariba's customers.

"EAI has a major selling point because it enables the aggregation of geographically and technologically fragmented business units to consolidate internal systems and therefore transactions," Sills says. "Businesses can achieve greater buying power by combining the whole enterprise under one system—that is, many buyers working together to get the best prices. Moreover, it enables networked applications like Ariba's to reach a company's entire range of trading partners, including small to medium-sized suppliers."

EAI is critical, Sills says, because it also enables key interactions such as:
Order-fulfillment activities for multiple supply-chain constituents—from order entry and confirmation to scheduling and production—as well as packaging, delivery, and payment
Product life-cycle management throughout the supply chain, including prototyping, development, upgrades, and end-of-life management
Post-sales customer support, including installation, repair services, spare parts provisioning, and version upgrades

Using the strengths of EAI to facilitate IEI also has major advantages, Whitehead says. This approach—which allows an organization to reuse integration processes for multiple projects—translates into faster inventory turns throughout the supply chain, which result in:
Lower carrying costs
Faster product delivery, made possible by electronic procurement applications that rapidly spread order information throughout the supply chain
Increased competitiveness through shorter engineering-to-production cycle times
More reliable planning and forecasting through improved information access

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The Complexities of Communication
For many companies, finding a consistent way in which to communicate with trading partners is the big obstacle, Cisco's Whitehead says.

A typical problem, for example, is the definition of a part number. The concept of a part means one thing to a marketing person who identifies a product as a complete unit, and something else to a worker on the shop floor who needs to know every component part of that product. It could mean something else to a supplier who is building those components, or a member of the support team who must understand which versions of components were used in the product in the past.

"It's not possible to have a single vocabulary with which you talk to all your suppliers and trading partners. You can't expect everything to map to your single vocabulary. Ideally, you'll have multiple points of integration into your system. So you need to have a single concept of how the different vocabularies relate to each other," Whitehead says.

Creating a single concept must involve the business owners within the company, Whitehead says. "You need to understand your own processes and products before you can tell your business partners how to interact with you. A lot of that information may already be available, but it may not be written down or automated."

Moreover, companies must find a solution that's easy to understand and easy to implement, Ariba's Sills says. "You can only achieve ROI when you bring your whole supplier community together. Suppliers are concerned with maintaining status quo and not disrupting business, so you have to convince them that there's a value to them. Part of that pitch is an easily understood solution, one that is also easy to implement."

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Vendor Solutions
One tactic for simplifying both EAI and IEI is to use third-party vendors. And today, there is no shortage of software vendors offering ways to simplify integration and communication.

Current IEI vendors, such as webMethods, Extricity, Netfish, IPNet, and Cyclone, are not considered competitors to EAI vendors, such as Neon/IBM, STC, Mercator, Tibco, and Vitria.

However, META Group anticipates that during 2001, IEI and EAI vendors will enter a period of intense competition. The group predicts that IEI vendors will attempt to strengthen back-end application integration capabilities through partnering and alliances, and EAI vendors will strengthen interenterprise transport, partner management, and security capabilities through partnering, acquisition, and internal development. As a result, META expects that by 2003, the distinction between IEI and EAI will have largely disappeared—and the recent acquisition of EAI vendor Active Software by IEI vendor webMethods indicates that the distinction is already starting to become fuzzy.

Already, vendors of EAI and other middleware components have extended their capabilities beyond company walls to address business-to-business integration needs, including for e-marketplaces. For example, vendors such as Tibco, Extricity, and Vitria now specialize in helping disparate systems talk to one another, so that in-house IT personnel don't have to build these connections from scratch.

In the future, maintaining a set of open standards will be important to easing the integration process. For example, the Extensible Markup Language (XML) is a data-description language that gives trading partners a standard way to interpret and exchange data—assuming they use the same data definitions and schemas. Although great strides have been made in developing e-commerce transaction standards thanks to the Electronic Business XML (ebXML) initiative and the Rosetta Net Consortium, uniform standards haven't been widely adopted yet.

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March 1, 2001

About the Author
Talila Baron is a freelance writer living in the San Francisco Bay Area. She has written for Red Herring and InformationWeek.
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Further Reading
Forrester Research says that $1.4 trillion will flow through online marketplaces by 2004, making EAI a crucial component of e-business success.

The First Step
"Most large enterprises are in the pilot phase, trying out a few IEI projects. They're starting to create relationships with software vendors and partners to connect their business to that of their suppliers and trading partners. But smaller businesses may feel they do not have high enough volumes to justify the costs of implementing an IEI/EAI solution. In this case they should take a carefully targeted approach toward these new technologies."
—John Whitehead, business development manager, New Markets and Technologies Group, Cisco Systems

Communication Backward and Forward
"Companies want to achieve efficiencies not just internally, but across their supply chain. That's why they must have both internal and external integration, and that requires a B2B commerce platform which integrates with their own back-end systems and with those of their trading partners."
—Brad Sills, strategic alliance manager with Ariba

On the Horizon
Whitehead notes that among the standards to watch are ebXML and RosettaNet. The RosettaNet Consortium is defining standards for vertical industries, including information technology and electronic components, and the ebXML group is defining a framework for business interactions.

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