Budget Cuts, Other Problems Hamper App Integration Efforts

Computerworld - Enterprise application integration (EAI) was on the to-do lists of many IT organizations heading into this year. But like other capital-intensive projects, EAI efforts are falling victim to the tightening budget nooses at some companies.
IT departments have been forced to postpone integration projects aimed at streamlining corporate data workflows and automating ties to customers and suppliers, according to a half-dozen IT managers interviewed last month.
"We went into [2002] with big integration plans, but budget cuts have put this on hold for now," said an IT manager at a large New York-based investment bank who requested anonymity. "We're just starting to explore this now."
The investment bank is currently evaluating core business systems that might benefit from additional integration, including the synchronization of disparate commercial banking systems that have been added through recent acquisitions, the IT manager said.
The problem for many budget-constrained IT departments is that "investing $2 million to integrate applications without a definable business problem just isn't happening," said Karen Pursch, senior director of strategic marketing at Dublin, Calif.-based Sybase Inc., which recently hosted an integration seminar for corporate users in New York.
But some companies that have managed to identify clear business needs said they're leveraging EAI initiatives to generate strong financial and productivity gains.
EAI "has been a big radar item for us over the past 12 to 18 months and will continue to be for the next 12 to 18 months," said Charles Irsch, CIO at Centex Homes, an operating unit of Centex Corp., a Dallas-based home builder with annual revenue of about $8 billion.
Centex Homes has found that if it can move information more quickly and efficiently between various systems, "it can make our people more productive," Irsch said.
Earlier this year, Centex used IBM's MQSeries middleware and Sybase's e-Biz Integrator and Adapter tools to help integrate its procurement system with its accounting and general ledger systems.
The effort, which took about four months, eliminated much of the manual rework once handled by Centex's accounting staff, Irsch said. That has resulted in a 30% productivity gain for those workers, he added. Irsch declined to say how much the project cost.
Dealing With Diversity
But EAI hasn't come together quite so easily at New York-based Avon Products Inc., a $6 billion maker of beauty products that does business in 143 countries. Avon CIO Harriet Edelman said the company is trying "to find the sweet spot" of globally integrating its business operations while preserving the entrepreneurial capabilities of its local units.
"Our applicationportfolio reflects our business diversity," Edelman said. "We're really in the stages of standardizing and bringing down the number of applications we have, and we're beginning to tackle the challenges of application integration."
Nora Swimm, executive director of the information services unit at PJM Interconnection LLC, said the Valley Forge, Pa.-based wholesale electricity market operator has opted to take an incremental path with EAI tools such as MQSeries.
"We have a partially implemented EAI solution where we're using vendor tools to partially integrate applications within our environment," Swimm said. "We don't subscribe to a big-bang approach due to the risks involved with that." Still, Swimm said, EAI spending accounts for about 15% of PJM's total IT budget for this year.