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The Integration Imperative

The Integration Imperative

Considering that ROI is the number one driver for integration, that almost half of projects would not deliver on expected ROI, and costs involved in maintaining systems is a negative for integration, accurately measuring the costs and returns takes on a prime focus for IT and business managers.

A recent survey of CIOs on their experience with business integration projects presents a worrying scenario - costs as a percentage of IT budget are high, successful completion is going down, the easy ones have all been done and the remaining projects are more complex and prone to failure in reaching their expected ROI.

Put 200 plus senior IT executives in a room for a day and someone's going to stick a survey under their respective noses. That's exactly what InterSystems did last September at this magazine's annual conference. The company, which develops and markets the Ensemble universal integration platform, had - as you might guess - integration on its mind, and solicited attendees' views and experiences regarding this ongoing challenge. The resulting report, the Australian Integration Survey 2004/05, collates the views of 87 senior IT executives from 73 organizations. It was the second annual survey undertaken by the company.

InterSystems defined business integration as: "business processes and the underlying technologies upon which they depend, involving IT solutions such as application integration, data coordination, composite application development, business process management and business activity monitoring". Such integration has long been a simultaneous Holy Grail and major bugbear for IT execs, who voted it their number one spending priority last year in CIO's own "State of the CIO" survey (June 2004 issue), and this above strategic planning, aligning IT, lowering costs and implementing security measures. The current survey endorses that view.

Of course, survey results should always be treated with some caution, particularly when they deal only with averages (response ranges are rarely quoted in the report), and establishing trends when you only have two sets of findings is potentially building on uncertain foundations. Nevertheless, there is much of interest to consider in the integration survey. In summary, the key findings are:

• Some 20 percent of organizations' IT budgets were allocated to business integration projects.

• The services to software ratio of integration spend comes in at 3:1.

• The top three drivers for business integration were improving ROI on existing applications (58 percent of respondents), cost reductions through better access to information (49 percent), and process automation (40 percent).

• A total of 56 percent of CIOs and IT managers could integrate less than 40 percent of their IT applications with other applications in their organization.

• No integration solution type was currently employed by a majority of organizations; data integration adaptors will overtake Web services as the most common in two to three years' time with around three-quarters of organizations using each.

• Some 63 percent of projects were delivered on budget, with 37 percent going over (none came in under); 51 percent were not delivered on time; 47 percent had not delivered all functionality specified; and 46 percent had not delivered or were not expected to deliver the targeted ROI.

• Respondents gave available integration technologies strong negative scores in five out of eight categories: internal resource constraints, additional expertise required, cost involved during implementation, length of time required to complete, and cost involved in maintaining the systems. A neutral result was given to imposing a constraining architecture for future development, and only two aspects, performance and business risk, were generally seen to be positive.

Some of these findings deserve a closer look, particularly from the perspective of actual CIOs as opposed to the hypothetical average.

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