Piecing It All Together

A year after Steve Kaufman and his staff at Goshen, Ind.-based health care insurer Mennonite Mutual Aid Association (MMAA) launched a massive enterprise application integration (EAI) project (see story), the results are in, and the news is mostly good.

The company's goal was to use tools from Vitria Technology Inc. in Sunnyvale, Calif., to integrate core insurance applications running on IBM AS/400s with applications running on Windows NT servers and to more than double its system-to-system interfaces over the next five years.

The project is being driven by the approach of the October 2003 deadline associated with the Health Insurance Portability and Accountability Act of 1996 (HIPAA), which requires the use of a set of specific standards for the electronic exchange of data.

"We finished our first project in August of last year, the HIPAA 834 group enrollment transaction, and now we're working on the most complicated transaction," says Kaufman, MMAA's director of IT architecture. That's the 837/835 transaction, in which MMAA receives a health claim from a provider and then tells the provider how it's going to pay the claim. This is also the transaction with the highest volume.

Steve Kaufman of Mennonite Mutual Aid Association (MMAA)
Steve Kaufman of Mennonite Mutual Aid Association (MMAA)
MMAA has also completed an interface from a Windows NT SQL Server database to an AS/400 DB2 database, connecting the company's two main databases.

On the downside, initial plans to double the number of system-to-system interfaces have been slowed. "Our organization had plans for CRM, and those were cut back quite a bit with the whole economic situation, so that's going to slow down how many interfaces we put in," Kaufman explains.

Remaining Attractive

Another EAI user, Corporate Express Inc., an office supplies distributor in Broomfield, Colo., has improved customer service by almost doubling the number of interfaces to business partners, from 120 to more than 200. Its aim was to cut costs both internally and for its customers so it would remain attractive as a preferred supplier.

Andy Miller of Corporate Express
Andy Miller of Corporate Express
The company has also completed a handful of other EAI projects in the past year, including integrating its PeopleSoft ERP system and its warehouse management system.

"The integration effort is probably even more successful than we planned," says Andy Miller, vice president of technical architecture at Corporate Express. "We didn't think that we would replace as many legacy interfaces as we did. We actually went back to quite a few older interfaces between applications and retrofitted them."

One of the results was that the company set a new record for online sales this past January, selling more than $7 million in office products online in one day. Online sales now represent more than 50% of its total sales.

In addition, Corporate Express' integrated business-to-business systems, which include EDI and XML interfaces with customers' e-procurement systems, achieved a new daily high of more than $2 million. Corporate Express has integrated with more than 250 customer e-procurement systems, including platforms such as SAP AG, Oracle Corp., Ariba Inc. and Commerce One Inc. The company expects its 2003 e-commerce sales to exceed $1.5 billion.

Corporate Express is using integration technology from Fairfax, Va.-based WebMethods Inc.

By the end of 2003, Miller says, he expects to complete five more strategic EAI projects that will, among other things, expand the company's products and enhance its delivery capabilities.

"We haven't measured it officially, but we know of cases where we've won business because of our integration capability with customers," he says.

Looking ahead, Tom Dwyer, an analyst at Boston-based Aberdeen Group Inc., predicts that worldwide spending on integration software and services will continue to grow faster than overall technology spending for one simple reason: It's cheaper to integrate existing applications with new ones than to rip everything out and start fresh.

Trombly is a freelance writer in Belchertown, Mass. You can contact her at maria@trombly.com.

Copyright © 2003 IDG Communications, Inc.

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