InformationWeek
Defining The Business Value Of Technology
April 26, 1999
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The continuing spate of mergers and acquisitions is spurring integration efforts as a means to bring together the business and IT processes of disparate companies. ScottishPower, the first foreign utility to purchase a U.S. company, sees integration technologies as key to making its acquisition strategy run smoothly. ScottishPower last year bought the Portland, Ore., PacifiCorp, one of many recent acquisitions fueling its global growth.
The Glasgow, Scotland, company created what it calls the "information ex-change," an integration archi- tecture built around Constellar Corp.'s Constellar Hub, which provides application integration through data conversion. The exchange is a centralized hub that lets the company add new applications into its IT mix. For example, each local utility might have its own customer-service and billing applications, but they all link to the parent company's standard meter-reading application through the hub.
This architecture greatly reduces the strain of integrating new IT operations into the company following an acquisition, and it lets ScottishPower rapidly change its business processes to meet customer needs. "The beauty of application integration is that you can simply unplug an application that supports an old process, and plug in a new one that supports the new process," says John Gervin, ScottishPower's integration services manager.
The value of E-commerce comes not just from improved efficiencies within a company, but from tight business-process links with business partners. Semiconductor vendor Adaptec Inc. outsources work to several chip manufacturers. In the past, Adaptec relied on faxing procurement and shipping forms, and manually re-entering data at each stage of the process. This put Adaptec at a distinct disadvantage against competitors that handled all phases of manufacturing and fulfillment internally.
To tighten its supply chain, Adaptec implemented Extricity's integration software. Adaptec now can send procurement orders directly to its suppliers' computer systems. Processes that used to take days now take seconds. "The new system paid for itself in a matter of weeks," says Dolores Marciel, Adaptec's VP of procurement. Adaptec has saved $9 million so far and expects to reap an additional $2 million in cost savings from the more efficient processes this year.
Driven by the need to cut costs, tighten supply chains, create process efficiencies, or improve the customer experience, enterprise application integration has become a top business priority for many companies. Vendors, eager to capitalize on this movement, are working to deliver more comprehensive and easy-to-use integration technologies that address both business and IT needs.
Forrester's Brown expects vendors to introduce app-integration technologies that replace middleware tools with process-management applications designed for nonprogrammers. "Packaged and legacy applications will become rich suites of corporate services that allow applications and the business functions they support to be rapidly deployed and redeployed without significant disruption," Brown says.
Even more help for dealing with the velocity of change.
--with additional reporting by Rick Whiting
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