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 dont last forever. A little advance planning now could pay off when the economy begins its inevitable upswing. Thats 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.
Boost Workforce Efficiency
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 staffs 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.
Reduce Consulting Costs
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, youll actually save money because your team will be able to accomplish smaller integration projects without the expenses associated with hiring outside help.
Delay ERP Projects
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 cant 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.
Avoid Complex Business Process Management Deployments
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.
A current article in CIO magazine, authored by Mark Cooper and Paul Patterson of The Athens Group, places the average cost of a BPM project between $250,000 and $500,000. The authors also call attention to a variety of hidden costs, including licensing fees for development/test environments, the purchase of application and database servers, internal staffing costs and training expenses.
However, your company can choose to implement only the business-level services, rather than the entire BPM system, as a temporary measure. These services can then be used by your existing integration software, as well as your current applications (homegrown or packaged), portals and dashboards, BI and reporting environments, and other technologies, without a substantial investment in BPM suites. This approach will not only provide dramatic efficiency and agility gains today, it will also accelerate your BPM implementation down the road, when the economy is better and the funds needed to support a BPM initiative are more readily available.
Prosper When the Economy Rebounds
Your integration environment will not only keep you afloat while the economy is bad, it will also lay the foundation for growth and prosperity when things begin to improve. For example, integration software can help you:
Acquire your competitors. Tough times will separate the strong companies from the weak ones, leaving some businesses vulnerable to takeovers while positioning others to become dominant market players. Through effective use of integration technologies, you can keep your organization sound and solid, setting yourself up to buy those competitors at a bargain price who dont survive the recession. Once the acquisition is complete, youll need to seamlessly tie together the disparate systems from both organizations a task that can be accomplished swiftly and cost-efficiently with the integration software youve already implemented.
Turn quick fixes into an infrastructure for growth. The integration scenarios highlighted in this paper may be considered by many to be quick fixes. However, the term quick fix does not necessarily apply here. Implementing an integration software package is far more than just bandaging a wound. In fact, the majority of successful integration projects begin as finely grained transactions and evolve to become higher level processes.
Addressing smaller scale, immediate needs in ways that avoid proprietary technologies, and ensuring that interfaces are designed using simple terms for business users to understand will make it easy for you to incorporate your existing solutions without the need to rip and replace into new projects when budgets are back on the upswing.
Many companies view integration as a series of big, messy projects that require extensive resources and multiple tools from a variety of different vendors. However, through small, strategically planned, tightly scoped projects, your business can achieve immediate benefits and create demonstrable short-term value particularly during periods of financial crisis while preparing for continued prosperity through growth and expansion in the future.
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