3. How Will You Integrate Technology With Business?

Computerworld - When Baxter International Inc. began exploring an enterprise application integration (EAI) project in 2001, its plan was to improve the exchange of information with others in the health care industry, including suppliers, manufacturers, care providers, insurance companies and patients.

"The health care industry traditionally has been very fragmented, with the various constituents using many different types of systems and all having different needs," says John C. Moon, CIO at the Deerfield, Ill.-based provider of health care equipment and supplies. "We see EAI as a way to help us connect our systems to those of suppliers, physicians, insurance companies and others. That will allow us to be more agile, to react more quickly to changes in the marketplace."

EAI involves using software to connect a variety of applications into a cohesive unit and thereby helps enterprises align systems more closely with business processes. It's become a critical part of the IT strategy at many organizations looking to meld disparate systems and quickly deliver data to employees, customers and partners.

Mark Ehr, an analyst at Enterprise Management Associates in Boulder, Colo., expects the EAI market to grow as companies continue to integrate front- and back-office applications, Web services and legacy applications. Some analysts say companies can expect to spend $200,000 to $400,000 on an EAI project, including software and installation costs.

EAI was the third most-cited project Premier 100 IT Leaders said they plan to undertake in 2003. And while IT managers who have completed or launched EAI projects say there can be significant benefits, they also point out that such efforts require specific skills and extensive coordination among multiple departments. Here, they offer advice for successful EAI projects.

Measure Expected Benefits

Baxter will launch the first phase of its EAI project this month, using an integration platform from Fairfax, Va.-based webMethods Inc. to link a Web-based customer service application to its enterprise resource planning (ERP) system. This will allow customers to place orders, check order status and delivery schedules, and conduct other transactions electronically. Most customers are now able to conduct business with Baxter only by phone, Moon says.

Baxter plans to expand its EAI to supplier systems so it can make its supply chain operations more efficient through inventory reductions and faster electronic ordering. The company is also considering using EAI software to connect medical devices to its ERP systems so, for example, patients using home kidney dialysis machines could order supplies using intelligent agents installed on the machines.

When it came to getting funding for the project, Moon says Baxter evaluated the need for EAI based on the number of systems it would affect, the costs and the potential business benefits. Planners presented a cost-benefit analysis to senior managers for each system that could benefit, Moon says. "We made the case that there would be increased speed [of transactions], fewer people to do interfaces and cost reductions," Moon says. It took about five months to build the business case, gather information on available EAI products and get approval for the overall effort, which began as a pilot in the fall of 2001.