Pulling It All Together - Page 3

The Integration Broker Payoff

The Integration Business

The kind of magic that application integration provides doesnt come cheap. A typical project can cost from $500,000 to $1 million, reports Gartner. Companies can certainly go with a do-it-yourself approach, using an assortment of development tools: a Web application server like BEAs WebLogic, an integrated development environment like IBMs VisualAge, messaging middleware such as IBMs MQSeries, and a dollop of Java or C++. But analysts say such solutions are more time-consuming (and buggier) than hiring an integration expert (also called an integration broker) such as IBM, Tibco Software, Vitria Technology, webMethods, or any one of 30 other companies.

Although its entirely possible to implement your own integration solution from these bits and pieces of technology, the probability of matching the impact of an integration broker implementation is quite low, say Gartner analysts. AMRs Knickle agrees. Thats why more companies are turning to the experts to manage their integration projects. "People have hand-coded integration for years, but youre being inefficient if you do that," she says.

Smart businesses these days arent committing to any IT projects without realistic return-on-investment projections. Thus, deciding whether to hire an integration company or to put your own developers on the job comes down to a return-on-investment calculation that factors in fixed costs—licensing fees, hardware costs, and training—and variable costs, such as labor hours spent on design, development, testing, deployment, and maintenance.

Gartners metrics on actual integration projects point to the benefits of hiring outside help. Analysts found that hiring an integration company reduces the time developers spend on simple integration projects by 25 percent. The time savings rose to 43 percent for complex projects. Unisys might be the exception, however; it estimates that developing an integrated help desk using webMethods solutions took 95 percent less time than a custom job.

The savings in maintenance costs may even exceed the savings in development costs. By contracting integration experts, companies can realize significant cost savings and faster turnaround, according to Gartner. And dont forget opportunity costs: Completing an integration project in six months instead of eight means your business can benefit from the cost savings and efficiency of the integration that much sooner.

An integration project may even be able to free up money thats currently spent on "tactical, point-to-point, hand-coded integration," says Eric Austvold, research director at AMR Research. He estimates that a $10 billion company could squeeze out about $4 million for other uses. Not bad.

Though ultimately profitable, an integration project is no small undertaking. Austvold explains one scenario: A new CIO comes on board and inherits a tangled mess of an IT infrastructure. (The previous CIO lasted only two years.) He cant start over, because the line-of-business executives are running their own applications, which seriously strain the back-office systems that the CIO manages. When new ventures call for data exchange with trading partners and customers and require documentation of business processes, the CIO is left staring at the spaghetti code of point-to-point interfaces. All hell breaks loose, and he leaves within two years.