Leverage Integration to Weather the Economic Storm

Even the toughest of times comes with a silver lining. Economic slowdowns and other business challenges force us to refocus our efforts on our core business practices. They shift our attention to the things we tend to ignore during periods of growth – like improving efficiency, cutting costs and enhancing strategies.

But fear and pessimism are not the answer. Planning and decision-making based on reason, rather than dread and apprehension, are the keys to weathering the storm. Remember, tough times don’t last forever. A little advance planning now could pay off when the economy begins its inevitable upswing. That’s where integration comes in.

While corporations are implementing rigid cost-cutting measures across the board, many are actually increasing their spending on integration projects and related technologies. Investing in key business opportunities will not only reduce the negative effects of the recession, it will also position you to come out a leader once the dust settles and things begin to look up.

During the last economic downturn, a study by leading analyst firm Yankee Group cited that corporations continued to place a huge emphasis on integration. In spite of the declining financial conditions we experienced just five or six years ago, larger budgets were allocated for projects such as facilitating information-sharing among partners, customers and suppliers, as well as automating sophisticated, high-value transactions, both inside and outside the organization.

The same holds true today, and integration can do a lot for your organization during these challenging times.

Enterprise-scale integration projects are often complex and time-consuming. They require a tremendous amount of infrastructure, as well as the dedication of numerous types of programmers and executive sponsors.

But many important activities can be streamlined in small ways by merely tying a few disparate systems together. When implemented using business-level interfaces and service-oriented techniques, these simple projects can deliver significant business impact in the short term, while laying the foundation for larger, more comprehensive integration projects in the future.

There are a variety of other ways in which integration software can be used to achieve tremendous productivity gains. For example, find one valuable transaction within your enterprise resource system, such as “insert purchase order,” and publish an event that contains the business data that becomes available when the transaction completes (customer ID, line items, quantities, etc.). Then, have one data warehouse or customer relationship management application subscribe to this event stream for real-time updates. This will minimize manual data reentry and make a noticeable difference in your staff’s productivity.

Or, you can provide users with the ability to retrieve real-time information from a data source that was previously difficult to tap into. This can be accomplished using an event similar to the one in the example just mentioned, or by providing direct access to an operational system. The result will be enhanced productivity through improved “on the fly” decision-making across your entire business.

In fact, according to the International Society for Automation, simply automating a process will increase efficiency by 1 to 2 percent annually. Automating that process and enhancing it with real-time information can yield an additional 3 to 5 percent improvement in productivity.

You can even take one “orphaned” form on your Web site – one that requires an extensive amount of rekeying – and connect it directly to the application that stores the information obtained from it. Or, publish the completed form as an information event, for consumption by at least one other application. This will improve worker efficiency by eliminating manual data entry work, while enhancing information accuracy by minimizing human errors.

During a recession, many companies assume that cutting costs equates to slashing headcount – and consultants are usually among the first to go because their fees are tough to sustain when budgets are shrinking. Integration software can help ease the burden and make your IT staff more self-sufficient when it comes to integration projects.

According to Rick Sherman of Massachusetts-based consulting firm Athena IT Solutions, integration software automates many common, repeatable functions, eliminating the need for companies to start from scratch with each new initiative. This minimizes dependence on third-party consulting resources, which, in turn, offsets the initial cost of the software. Over time, you’ll actually save money because your team will be able to accomplish smaller integration projects without the expenses associated with hiring outside help.

The benefits of ERP are clear, and companies rely on them to automate and streamline core activities, consolidate data and enhance visibility into key operations through improved reporting. But when funds are tight, the time may not be right to accrue the exorbitant licensing, consulting and maintenance fees associated with implementing new ERP modules or upgrading existing ones. In fact, a study by AMR Research cites that the average cost of an ERP expansion can total as much as $1.5 million. Additionally, Meta Group estimates that failure rates for ERP projects typically hover around 70 percent. Like most businesses, you just can’t afford that kind of risk and expense during a financial crisis.

Many of the advantages of an ERP system can be accomplished incrementally through the completion of small-scope integration projects. With economical integration software and a well thought-out plan with a phased set of deliverables, your company can achieve the same increases in process efficiency, data management and access, and reporting and analysis – without the high price tag and the potential threat of project failure.

The implementation and management of business process management tools can drain extensive human and financial resources – which are scarce during a recession. Additionally, BPM strategies often call for a set of business-level services as a foundation.