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SOA and integration in the cloud bring agility and value down to earth

Executive viewpoint

Nancy Pearson, Vice President of BPM, SOA and WebSphere Marketing, talks about a cost-effective way to connect with customers and partners through SOA and cloud integration, news of the forward-thinking guest speakers at Impact 2010, and how to preview the topics at Impact of most interest to you for your personal agenda. Read her commentary.

Do business the way customers and partners prefer

Your business partners and customers want to exchange information, data and documents rapidly and painlessly. Ideally, they want to seamlessly connect to your systems to access this information or to transmit documents, such as purchase orders, or obtain real-time order or inventory status without leaving or changing their native environments.

Companies that can accommodate a partner or customer’s preferences differentiate themselves through new levels of responsiveness and service. This ability to manage to your partners’ integration needs can be accomplished by leveraging cloud integration and SOA technologies.

Let’s take the supply chain as an example. Integrating third-party information into the supply chain is a well-established practice, and many global companies drive higher efficiency by requiring key suppliers to conform to their technical integration preferences. In most cases, this is using electronic data interchange (EDI) to link organizations and exchange data. For many companies, this technology has been good enough to do the job.

However, many organizations are finding it impractical to mandate all suppliers to use the same EDI standard for sending documents, and the EDI transactions are often outside of other IT services. What many companies need is a more robust business-to-business integration solution that extends beyond legacy EDI to allow the exchange of messages between EDI standards and other formats and systems, allowing all members of the supply chain to work in their preferred applications and business processes. Also, by incorporating this information exchange among suppliers into your overall supply chain process and centralized IT services with SOA, you gain a much higher level of efficiency, cost savings and visibility.

The added complexity of integrating customers

Customer integration is a different story and has not grown out of an established technology like EDI. Most importantly because customers have the power in your relationship and expect you to conform to their preferred integration method. Also, real-time communication and eCommerce is paramount with customers, because the business process is centered on end buyers selecting items to create purchase requisitions. Therefore, your customers need an integration process that not only allows them fast and accurate access to your product information but also up-to-the-minute pricing and product availability in order to make their purchase decision.

Integrating into this dynamic environment presents many technical challenges but also huge business opportunities. Several companies have been able to exploit integration technology to drive big gains in top-line revenue, improve operational efficiency, and win new customers by differentiating themselves from competitors. Nothing is more powerful than being able to say “yes” when a customer asks if you can do business their way.

SOA aligns IT initiatives with business goals

You may wonder, "What does this have to do with SOA?" The answer is: everything. According to Gartner, companies should align initiatives across SOA, business process management and integration, because federating these efforts across an enterprise architecture will vastly increase the overall benefits.¹ This is also true when you want to extend your business process or integration beyond the firewall. By leveraging your centralized services (SOA) infrastructure, you can ensure your business integration transactions are aligned with the overall business objective and are not operating in a vacuum. With today’s economic challenges, IT must ensure that all initiatives are aligned with the business goals and are positively impacting the business. By utilizing SOA to manage business processes and your integration requirements, you are able to maintain that IT-business alignment and show clear impact on the top or bottom line.

This is especially true when combining SOA with a cloud integration service (software as a service or SaaS), such as the joint IBM-Hubspan solution called WebSpan. WebSpan (link resides outside of ibm.com) is a SaaS integration platform that combines the cloud integration platform and managed services of Hubspan, an IBM Business Partner, with key components of IBM WebSphere® integration software.

Using cross-enterprise integration with a cloud-based service like WebSpan applies SOA to the enterprise architecture (EA) layer, providing the interoperability that enables you to seamlessly connect to your business partners or customers. This interoperability via the cloud intermediates the vast differences among systems and allows each company to exchange information through their preferred format and method.

SaaS-based business integration can also jump-start a SOA program. Experts advise that the easiest way to implement SOA is to pick a single process and move from there. Integration-in-the-cloud and related services can provide that centralized SOA interface for information exchange across internal and external systems. For most organizations, business integration in the cloud is a low-risk, high return-on-investment entrée into the brave new world of SOA. It enables companies to expose key information in a secure environment that does not impact the infrastructure of either party.

SaaS-based business integration goes far beyond technical integration to allow independently designed systems to work together in a cohesive fashion. This allows an enterprise's partner and customer communities to improve execution flow within jointly defined processes and to integrate at the business process layer.

Success "by the numbers"

By leveraging SOA and a cloud-based business integration solution, you can achieve fast and flexible integration, reduce costs and complexity, and utilize the next generation of interconnectivity. Delivering interoperability through Web services on a cloud integration platform provides measurable business benefits to companies and their business partners and customers.

Here are some key metrics from actual Hubspan customers that implemented business integration:

Mayer Electric Supply puts the customer first with business integration

Mayer Electric (link resides outside of ibm.com), a $700 million business-to-business supplier of electrical equipment, is selling 500,000 products to customers across all industries. Mayer needed to find a way to improve their online catalog, extending its availability to their customers’ e-procurement systems. One of Mayer’s guiding principles is putting the customer first, but the firm was finding it challenging to adhere to that principle when it came to the eCommerce technologies, and needed to make it easy for customers to do business with them. The 79-year-old company had built its customer relationships one at a time, and lacked sufficient integration.

By working with Hubspan and implementing the WebSpan eCommerce Integration solution (link resides outside of ibm.com), utilizing punchout and purchase order exchange, Mayer is now able to work with its customers’ diverse platforms and formats, and the company’s eCommerce and procurement process is fast and easy for its customers.

The move to the WebSpan Software-as-a-Service (SaaS) Integration Platform avoided the cost and headaches of developing and managing an on-premise solution. WebSpan also ensured interoperability between Mayer’s back-end systems and eCommerce site and its customers’ many procurement applications, standards and communication protocols.

In addition to retaining strategic customers with the integration implementation, Mayer is winning new business and is a preferred vendor to clients that had previously been working with the competition. Mayer is also seeing an increase in order volume from integrated accounts. Ramp-up time is fast with WebSpan, as customers are on-boarded within a few weeks. Mayer estimates it is saving $200K by not building in-house, and saving thousands more each month with the new solution.

Conclusion

With continued globalization of the business market and increasing need to respond to partners and customers quickly, efficiently and on their terms, business integration has become a priority for enterprises of all sizes. Sharing information and expediting critical processes, like procurement and supply chain management, are more important than ever. But integration, like SOA, can be a complex challenge for IT organizations, especially with the current belt tightening. Leveraging a cloud-based integration solution delivered as a service provides a cost-effective and easily scalable approach to business integration. And SaaS-based integration can either extend or kick-start a company’s SOA initiative, thereby increasing the benefit of both.

By Margaret Dawson, Vice President of Marketing at Hubspan and Jai Singh Arun, Product Marketing Manager for WebSphere integration products at IBM Software Group.

¹Gartner report: Federating BPM, Application Integration and SOA Initiatives Will Increase the Benefits of Each. Jess Thompson. 24 June 2009. ID Number: G00169038.