Return on investment (ROI) is not a good metric for strategic solutions like enterprise application integration (EAI), not if you are looking to unlock the treasures of your legacy applications. It is more likely to be a valid metric if EAI is driven by a customer relationship management (CRM) implementation, or perhaps a straight through processing implementation.
EAI metrics are largely about common sense and objectivity.
Peter Hall, consultant, application integration specialist
Perhaps we should look to history for a guideline as to whether people with vision, skill and faith can look at dispersed systems and identify the value of integration, and can clearly see the leverage that can be gained by creating commercial value from dislocated data.
In a recent article, Greg Vercellotti of Dimension Data referred to Saswitch as a competent message hub. The strength of this observation is borne out by the fact that Saswitch has been delivering the goods for well over 15 years.
But Saswitch represents much more; Saswitch was a triumph of cooperation over agenda. The ATM switching system was designed and launched early in the 1980s, long before EFT standards like ISO 8583 were published and long before the tools we take for granted nowadays were available.
SA was the first country to build a nation-wide ATM switch which included every bank. The project was managed with firmness by the Saswitch team. Members of the various committees and sub-teams, in spite of representing rival banks, put aside their petty competitiveness in favour of a common goal. And it worked; 16 years later the system still delivers the goods, still uses X.25 and still uses largely the same message flow and data content protocol. Of course, there were obstacles, but strong and visionary management overcame them.
The investment has long been paid and the return has been magnificent both in terms of reduced delivery costs (ROI) and in terms of increased customer service (return on opportunity or ROO).
Cobbled together
And so to application integration. ROI is not a suitable metric to adopt unless there is another driver such as CRM implementation. It is not a given that a CRM implementation will always be backed up by a competent EAI solution. CRM projects can be cobbled together with home-grown interface programs, more and more of the same. The unmaintainable, built by the unimaginative to create the unsustainable.
Application integration requires vision. It requires the use of alternative measurement metrics such as ROO. The metrics should be revisited frequently to determine the value achieved and to identify further leverage.
While we can leave it to the techies armed with glossy magazines to debate the merits and demerits of the layers of various integration architectures and to debate the terminology, senior executives wishing to continue to grow the enterprise and to unlock value should face up to the real need for integration.
The costs are high, and the weak rand is not helping the justification case. But if enterprises don`t consider suitable integration strategies at a senior level, they run the very real risk of becoming another of the `do-it-yourself` deadbeats unable to live with the competition. There was a time when a country to our north was denied technology and technicians had to make do with outdated technology. This led to a sort of `sticky tape and staples` mentality that is very hard to shake.
Measurements like ROI and ROO require a clear view of the medium- to long-term business goals and the definitions are largely pertinent to a specific enterprise. While ROI can define savings through operational efficiency and elimination of redundancies, ROO can help to define how much the enterprise can potentially earn by unlocking the value in legacy. EAI solutions require investment in building infrastructure, and the investment can pay off when it enables rapid introduction of new business solutions.
EAI metrics are largely about common sense and objectivity, and consideration should be given to using external resources to help with definition. Consultants and supply companies that have already been down the road of application integration are a likely source of objective and valuable assistance.
EAI is not new, it is not unproven and yet a Martian visiting SA after a five-year absence might be forgiven a nauseous feeling of d'ej`a vu. "Did you know that 70% of IT spend is devoted to building interfaces?" Now where did he hear that before?
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