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3/14/2003
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Tying It All Together

Executives are charting broad integration strategies to drive real-time business change. But the process isn't easy.

At Merial, an animal pharmaceutical business, director of IT Craig Hudson faced that kind of moment in November. Third-party distributors, which handle 83% of Merial's products, couldn't integrate with a new enterprise resource planning implementation. To keep up with orders, the internal warehouse, which usually handles only the remaining 17% of shipments, had to run around the clock. The development teams considered writing custom links or setting up EDI connections to tie the ERP system with third parties, but Hudson lobbied for another approach.

Hudson advocated an incremental strategy to sharing information. The idea was to connect third-party distributors to Merial's order system using what Hudson describes as an "information bus," based on messaging and integration products from Tibco Software Inc. "I said, 'I bet my job I can deliver this in three months,'" he recalls. The messaging system lets data remain scattered around the company and be delivered to other applications when needed.

It's not that the Tibco integration approach was less work-intensive. "The first ones you get on the Tibco bus, you have to do the same grunt work as coding," Hudson says. But now he's using the same platform to integrate systems for other purposes, such as linking Merial's financial systems to consolidate reporting more quickly. Company executives still plan to consolidate the 30 different instances of ERP technology the company has running throughout the world. But Hudson's integration strategy lets Merial share information without having to do a single-product, big-bang ERP implementation.

It's similar to St. Joseph's approach: Integrate better using the infrastructure that exists, yet move toward a larger goal. The result is that IT has improved its reputation for being able to deliver the information businesses want. "We're now the facilitators of business-process change," Hudson says.

And Hudson still has his job. The distribution project rolled out last month.

Integration Of Business Components

So is the Merial or St. Joseph model the only way to go? Not exactly. Cigna HealthCare, the health-insurance arm of Cigna Corp., is in the midst of a five-year, $1 billion project called Transformation, a mammoth IT project designed to replace a fragmented infrastructure and create an integrated care-management system. The health-insurance provider once used nine IT systems for managing patient cases. Now the company is using a customized Siebel Systems Inc. application to store and gather customer data, as well as link to applications on mainframes, AS/400s, and client-server systems that hold historical information. Cigna did it by creating a central messaging system, based on IBM's MQ series, to give customer-service reps a single view of a customer in one screen.

Customers felt the effects of Transformation beginning Jan. 1, 2002, the day Cigna migrated 3.5 million members to the system. Unfortunately, it wasn't all good. Over the next two months, the quality of claims processing sank. IT staffers had to upgrade some hardware so apps could handle the high volume, and managers found that the call-center staff needed more training on the new systems. "Unfortunately, you get worse before you get better," says Diana Bourke, senior VP in charge of the program-management office. Today, the call center resolves 88% of inquiries in one call, better than the goal of 85%.

The pressure hasn't let up: Business managers are asking that the integrated system deliver more. "As people get used to it, the bar is getting raised," Bourke says. "I sometimes have to tell people, 'This is a good thing. A few years ago, they wouldn't have been demanding this.'" For example, Cigna HealthCare president Patrick Welch has made improving relationships with doctors and hospital administrators a top priority, and he's made it clear technology must be part of the process.

Guzmán at Owens & Minor sees a similar phenomenon of growing expectations for information systems to become more flexible at the same time they become integrated. It's why he considers converting and integrating legacy systems a bigger problem than Y2K was. But the results are also more valuable, because the demand for faster access to more information will only increase. "Ultimately, it's an impossible task, because our expectations are only going to rise," he says.

Better keep reminding those integration teams: This is a good thing.

Illustration by Yvetta Federova
Integration diagram by David O. Miller
Photo of Stofko by Beth Herzhaft

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