Cyclone Augments Its Integration Software

Cyclone Commerce Inc. on Monday introduced its Transaction Director application to augment its package of business-partner-facing integration software. Cyclone's set of products create an integration hub or soft network inside a business organization, where incoming EDI, XML, and other messages and documents can be captured, transformed if necessary, and forwarded to the correct internal application. Outgoing messages and documents can likewise to forwarded to the correct business-partner application.

Transaction Director generates an overview of the process and visibility into the transactions that have failed or gone awry, said Jeff Kukowski, VP of marketing. Two examples of how such a view is useful are provided by the PMI Group Inc., the nation's largest supplier of private mortgage insurance, and Owens & Minor Inc., a provider of medical supplies to hospitals and other health-care institutions.

PMI has been sitting at the center of the torrent of mortgage refinancings as homeowners and new buyers rush to take advantage of low interest rates. PMI underwrote 397,000 mortgages in 2000. As interest rates continued to fall in 2001, the number jumped to 953,000, then 1 million in 2002. This year, it's headed for 1.4 million mortgages underwritten with PMI's private mortgage insurance, says CIO Dan Roberts, whose IT staff has remained essentially the same over the last two years. (Private mortgage insurance is required by lenders for purchasers or re-financers who own less than 20% of their properties.) Although his staff hasn't expanded, "the tolerance for delays has shrunk," Roberts says, as big lenders and small mortgage brokers all compete for business. In the case of one of PMI's largest customers, the Freddie Mac federal mortgage lending agency, PMI has 45 seconds to come up with a thumbs up or thumbs down on a mortgage applicant. A more typical service-level agreement is two minutes, says Roberts.

Competitors such as GE Mortgage Insurance and five other private companies, along with the Federal Housing Authority and Veterans Administration, all offer online means of applying for private mortgage insurance and confirming approval. From Roberts' perspective, "it's never been so easy for business to move to a competitor if it experiences a delay at PMI." As a customer's costs of switching to a competitor get smaller and smaller, "our service-level agreements take on higher importance," he says.

Roberts cautions that he is still an early user of Transaction Director--but says that so far, it has allowed PMI business managers "to seen when those transactions hit the site, track their flow through the business processes. If there's a hiccup, they know what it was and where it was in the process." Previously, managers assumed transactions were flowing through its EDI and other systems and didn't know otherwise until a customer called with a problem. Then several high-level technical staffers had to be devoted to tracking down a lost transaction, figuring out what went wrong, and reporting back to the customer.

When all goes smoothly, PMI is now in a position to quickly confirm the status of an applicant who calls to say, "We haven't seen a response from you. Should we call you or just wait," Roberts recounts.

In addition to routing its big EDI customers through Transaction Director, PMI finds more of its business being generated from its online service, e-PMI. Almost half of its new business now comes from the online source, or 40,000 to 50,000 mortgage applicants a month. With such volume, it would be difficult for the customer-service call center to be able to answer questions about delays or failed transactions if it weren't for the tracking and ability to view the progress of individual transactions through the hub, says Mark Madrid, director of E-business.

He would like to extend the ability to view the progress of a transaction to the business partners who submit them. "That's in the immediate future," he says. Instead of needing a consultation or response with PMI, "Customers will be able to provide themselves with self service" on the status of their applications.

When such service is made available, the cost of the customer service call center typically drops 20% or more, Roberts says. Meanwhile, EDI transactions are now routed into the Cyclone Commerce hub, traveling over the Internet instead of a private value-added network. Making that move cuts out VAN expenses, which amount to "several cents per transaction" for 200,000 to 300,000 EDI transactions per month, Roberts says.

Paul Higday, director of external systems at Owens & Minor Medical, says more than 30% of his company's sales now occur through the business-to-business connections supplied by its Cyclone hub.

Owens & Minor hasn't implemented Transaction Director yet, but Higday says his previous experience implementing the Cyclone hub saves money for each partner using it. "It removes a lot of the pain" of supply-chain integration, he says. "A one-day implementation with a partner is possible."

Transaction Director comes in three modules: Tracker, Support, and Self Service. Tracker allows inspection of transactions on the fly as they move from gateways, EDI systems, translators, and integration brokers. Tracker gives business personnel and technical staff access to the chain of events and documents that make up a transaction, says Andy Gage, director of product management. Tracker would be used with at least one or two of Cyclone's Transaction Delivery Network applications, such as Activator and Interchange, with an entry-level price of $150,000 to $200,000 for five to 10 user seats.

Support gives customer-service representatives and EDI support personnel a view across exchanges with a business partner. Customer-service reps can search for a particular transaction sequence using a purchase-order number, trading partner name, or other business-oriented terms. Pricing on Support would usually be connected with the sale of a related Self Service module, as well as Tracker. Self Service gives trading partners the ability to answer their questions about the status of an exchange based on purchase-order number, item SKU, item description, or other common business terms.

The three modules together with necessary elements of the Cyclone platform are priced from $500,000 to $1 million.