Legacy data integration
As companies embrace e-business and seek to build an extended supply chain, the challenges and costs of
integrating ‘legacy’ data grow sharply. Data integration has been described as the dirty little secret of ebusiness. While companies spend millions of dollars on impressive-looking web sites, they often overlook
the need to link their new e-business applications into existing back-end ‘legacy’ systems.
Industry experts say the challenge associated with integrating ‘legacy’ data from ageing financial, order
entry and accounting systems into new e-commerce or customer relationship management applications is
the single greatest barrier to success for most e-business initiatives.
Even within the enterprise, the complexity of integration can be overwhelming. Each type of application
presents a different view of information such as customers, sales orders or stock levels. The most common
way to tie applications together is for programmers to manually ‘hard-code’ the links.
That is acceptable for a couple of applications but, as the number grows, so too do the integration
challenges. In addition, these proprietary hard-coded interfaces are inflexible and difficult to maintain.
The difficulties grow as companies embrace e-business and seek to build an extended supply chain
integrating their customers, suppliers and trading partners. As the challenges soar, so too do the costs.
‘For the first time in history more IT dollars are being allocated to integration projects than to the hardware
that drives them,’ says Bluestone Software, a US company specializing in integration software.
One of its customers is TNT Express, the European express courier, which wanted to provide a packagetracking capability on its web site. Using Bluestone’s Sapphire/Web application server, TNT linked its web
server to legacy applications on an IBM mainframe and to a local Informix database.
Now, by simply typing a consignment number into the web page, TNT customers can track the progress of
their express documents, parcels or freight around the world, in more than 200 countries.
The Sapphire/Web application server provides customers with information on delivery, including date and
time of delivery, who signed for the shipment and a detailed report of the shipment check-in points en route
to its final destination.
Bluestone recently released a new e-business integration server based on Extensible Markup Language
(XML). This product can draw data from different sources and dynamically convert it to XML, the new
universal standard for electronically exchanging data, which is rapidly becoming the lingua franca for
business-to-business transactions.
Many companies in the enterprise integration market see XML as a solution to the problems of
incompatible data formats. But according to Charles Saunders, marketing director of Mercator Software,
XML will not make integration problems go away. ‘XML is going to be a useful tool but it is not the be-all
and end-all.’
Mercator has developed a Commerce Broker product which, unlike web integration tools developed around
XML, can work with both web-based and traditional e-commerce standards, such as EDI.
Mr Saunders gives the example of a large UK retailer which every night transfers a 4GB file containing the
day’s transactions. If those transactions had to be converted to XML the file size would grow enormously.
Mercator is one of a small group of software companies specializing in data integration. Others include
Neon, Level 8, Active Software and Web Methods – the latter is currently acquiring Active. Initially, these
companies, often called enterprise application integration (EAI) vendors, have focused on the problems of
linking internal applications together.
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This is done with a range of ‘adapters’ to connect one application to another. ‘You don’t need to know how
to get the data out of the applications because the adaptor does that,’ says Mr Saunders.
The EAI vendors have recently sought to expand into the more challenging market for linking different
partners together in trading communities.
For example, Level 8 has used its Geneva Integrator technology at ABN Amro, the big Dutch bank, to
integrate its back-end legacy systems with web-based applications to handle the growing number of online
customer inquiries. In four months, Geneva Integrator enabled ABN Amro to use data from its legacy
systems and convert it quickly to different web formats.
Now it is going further and using Geneva Integrator as a ‘message broker’ to link ABN Amro’s core
processing systems to the external infrastructure of Integrion, an international banking consortium which
includes ABN Amro.
EAI is not the only way to integrate e-business applications and analysts at the Meta Group say that EAI,
while good for internal applications, can be too ‘invasive’ to use with partner organizations.
A different approach to inter-enterprise integration is offered by companies such as Tibco, Iona and BEA,
which favour using middleware to create an extra integration layer between different applications. A third
alternative comes from Actional Software, which until last month was called Visual Edge.
John Orcutt, chief executive of Actional, claims his company’s control broker technology is superior to
other approaches. ‘If you want to get inventory or shipping information from the front-end application with
zero latency [no delays], EAI cannot do this. Our control broker lets you create a very direct connection
from the front-end to the back-end without introducing an additional middleware layer.’
As well as allowing direct access, Actional’s integration products implement the concept of ‘forward
command and control’, meaning that business services can readily be made available to any customer
‘touchpoint,’ such as a call centre operator, a self-service transaction on a website, or a bank teller machine.
‘Companies are looking to drive more and more of their products forward to their customers,’ says Mr
Orcutt.
Banks, in particular, have severe integration problems as they seek to ‘empower’ their customers and keep
track of customers’ transactions and preferences across multiple channels. The wave of consolidation in the
banking and other sectors adds to the integration headaches of IT managers.
But it is an ill wind that blows no good and the integration vendors have learned the best source of new
business comes from reading the mergers and acquisitions stories in the newspapers.
‘We now have a team of people who just look out for acquisitions,’ says Mr Saunders.
Source: Geoffrey Nairn, Financial Times, 5 July 2000. © Financial Times.
Questions
1. Describe the nature of and reasons for the problems of data integration described in the
article.
2. What solutions to the data integration problem are suggested?
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3. Research these solutions further by visiting the web sites of the companies described, what do
you think are the strengths and weaknesses of each of the approaches? Which would you
select?
© Marketing Insights Ltd 2004