Didn't we call legacy systems "stovepipe?" As I recall, we also called them "islands of information." They were created to solve a particular business problem one of accounting, product or process, not of integration. They did one particular function very well. However, they failed miserably when the world of business had to shift from a product focus to a customer focus. They could not be integrated easily. The customer demanded an ability to see all their related product information, regardless of source. Thus a whole industry around data integration was formed including both the data warehouse and operational data store movements.
Data integration is now a necessity in the world of customer relationship management (or, as some more accurately put it, "customer-managed relationships"). In fact, CRM (or CMR) has forced not just data integration, but business integration as well. Fancy personalized product introduction is important, but it is pointless without a seamless end- to-end business fulfillment process. There is nothing worse than presenting just the right product to the right customer at the right moment and then not being able to fulfill the order.
At a recent Forrester Research forum, I was surprised to hear their prediction that the "consolidated" industry evolution of today is morphing into "atomization." No more integrated lines of business; monolines live! While this forum was aimed at the financial services industry, there are probably other industries to which the prediction applies. Winners will be those with specialized "atomic" business lines that have best- of-breed products and services.
My initial take on this statement was that the pendulum is swinging once again: stovepipe, integrated, stovepipe. Forrester goes on to say that winners will be highly interdependent, which puts a slightly different twist on the swing back to stovepipe businesses and data. The new-world economy demands that we move quickly, outsourcing some systems by partnering with application service providers (ASPs). The ASP provides a solution, in some cases even housing our organizations' data in the process. All of a sudden, we not only have disparate legacy systems whose data we need to integrate, but brand new outsourced systems whose data is not even within the confines of the organization!
What happened to the promise of integrated, consolidated operational systems, based on our recent emphasis on reengineering our business processes? Forrester says, "Forget about it!" It ain't gonna happen. Maybe it's just too hard to do. Instead of the intra- company process focus our companies have had, what will be required to succeed (even survive) in the future will be an intercompany process focus. We will need to depend on supply chain processes and fulfillment partner processes and a whole host of processes that involve our partners as well as our own organizations. We'll just have to face the fact that some of our data lies elsewhere.
What are the implications for information? Data integration takes on an even more critical role. No matter the physical location of data, we still need to integrate it. Our customers will still want to manage their whole relationship and could care less where the data is located as long as it is available when they need access to it. Data warehousing will still be the vital glue that connects information for analytical functions. Look to messaging middleware and extensible markup language (XML) to facilitate operational data integration. XML and its related data standards provide the ability to share data between systems. For maximum data interoperability, insist that the partners you do business with adhere to XML standards. You will find that XML standards may not be driven out yet in all industries, but count on the fact that XML will be the way we trade information between e-partners in the future.
Yes, old or new, legacy or outsourced, a stovepipe by any other name is still a system whose data is solely designed to facilitate a particular operational function. It looks like the practice of implementing stovepipe systems is going to continue. We're just going to have to figure out how to play well with others. Partner interdependence, along with continued emphasis on data warehousing and XML, will help make the fact that our systems are stovepipes irrelevant.
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