<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=1907245749562386&amp;ev=PageView&amp;noscript=1">
Event_bg

The Leonardo Blog

All Posts

Is Efficient, Cost-Effective Integration Possible?

16_delivery_intergratio.jpg

An analysis on the next major paradigm shift.

The goal of most business is to grow revenue, whilst reducing costs and increasing profits - sounds simple enough.  

The problem is, we often have to invest a substantial amount of capital in the business only to get a return on that investment over a number of years.  It is this investment that is usually an inhibiter to a business adopting a best of breed approach resulting in sub-par solutions full of technical debt which is then difficult to maintain.  The business gets bound to key staff, infrastructure that becomes obsolete, software that requires constant upgrades and excessive ongoing ’business-as-usual’ costs.  

As modern businesses attempt to become more efficient through the use of technology, they sometimes hedge due to the risk/ROI ratio that includes a large ticket price and a moderate time to market.  

They essentially see the benefits like opening up their ‘digital channel’, or making their core systems more cohesive and the business more efficient.  However, they can’t justify the unguaranteed ROI over a multi-year return period. 

It’s a problem faced by Tier-n companies as they are constantly under pressure to reduce IT costs and until now their options have been limited to some form of outsourcing.  Anyone who has worked in the industry knows that it does not work and quality is the victim.  It’s a strategy mostly enforced by short term thinkers who need to hit short term KPI’s and who create a problem for the next person to fix.  It’s time for a paradigm shift in thinking how we can reduce cost and maintain quality and even improve it.  

Let’s look at this considering an analysis of 4 different models. 

We’ll assume that a company or business has decided it can achieve process improvement through systems integration, or they just need to reduce IT costs, and that includes the yearly integration bill.  It might seem odd to bundle these two opposing motivations into the same motivation for change – but in essence they are the same: Positive IT outcomes that help improve the business at a reasonable cost.

What options do these organizations have:

  • Enterprise Integration Software - Mature, fully featured established integration platforms which are the preferred option, however the higher license costs make these an expensive option
  • Opensource software - Whilst this option is appealing due to the lower license fee (opensource rarely means ‘free’), the business will most likely spend the majority of any license costs savings on building the appropriate framework and establishing a platform 
  • A Custom Solution - Many tier 2 or 3 organizations feel they can get away with developing a custom solution to suit their needs.  What often happens is the final solution is barely functional and lacks the inherent platform functionality often required to meet minimal requirements or regulatory requirements 
  • Managed Integration Delivery as a Service (MiDaaS) - The paradigm shift. A complete subscription based managed service.  This option gives you the full feature stack of the Enterprise Software at an affordable price, lower overheads and a quicker time to market.

Let’s take a look at where each of these options may work:

Enterprise

Traditional approach with large overheads, establishment costs, large license and support fees, and are generally tied to larger transformation projects.  This results in maintaining staff and capability over a longer period.

Opensource

The perception that opensource is freeware is a misconception.  These platforms do have a licensing component, and there is also the issue of resourcing with skilled people, and the software itself having the inherent frameworks of the Enterprise software.  This may result in cheaper licensing costs, however, it will most likely result in a more expensive development cost.  It also does not solve the issue of maintaining capability, staff and infrastructure overheads.

Custom Solutions

From the seeds of a custom solution, I give you technical debt and key resource reliability and constraint.  Custom solutions are good if you are tweaking your spreadsheet, or writing a small piece of code to make you irritating daily task easier to do, but in the realm of system integration, there is always a techie who thinks they can build their own integration platform. 

This is OK if you have 2 systems doing point to point and 1 or 2 integrations and you don’t want to expose those systems for consumption elsewhere.  All custom solutions very quickly outgrow their use as they soon discover that logging, message affinity, auditing etc., are pretty important things.  What seemed like a quick time to market at the time soon becomes a functionally limited highly customized piece of software that 1 person knows how to fix…

Managed Integration Delivery as a Service (MiDaaS)

  • Has the horsepower of the Enterprise software
  • Lower Total Cost of Ownership
  • Makes the organization technology agnostic
  • No technical debt will be carried by the business
  • Key resources/Capability maintenance/Staff overheads are no longer a problem
  • Subscription based pricing includes all infrastructure, design, build, test, maintenance, monitoring and alerting are all included
  • Reduces yearly cost of integration by a significant amount
  • Local account presence
  • Quality assured and consistency of service
  • Upgrades, maintenance, monitoring and alerting are all included 

Summary

In today’s world we are seeing a shift to the cloud and a form of managed services that see organizations infrastructure being managed by 3rd parties, but the actual work being done on the applications on that infrastructure is still managed in-house.  What I’m talking about is managing the complete Integration service from Design to BAU.  Sure all of the other approaches have their place for the moment because existing systems, teams, IT managers etc. are all in place and can’t see how to make the move to a fully managed service.  However, if we can make the move to the cloud, it shouldn’t take much to nudge us further along.

We are already seeing companies move to this model as they can see the immediate benefits and cost savings they can realize for their business.  This shift will continue at an increased pace once other companies see the benefits being realized by their competitors.

The paradigm shift is here.

New Call-to-action 

Adam Mutton
Adam Mutton
Working in the IT industry locally and overseas for over 25 years on IT projects has provided Adam with the experience and skills to deliver complex solutions. He is now focusing those skills and experience in managing a successful Delivery business specialising in BPM, Integration and Project Delivery Services. Adam's focus is always on getting the right result and ensuring there is a clear understanding around expectations, outcomes and fostering a team environment.

Related Posts

How To Replace Random Acts of Management With a Metamodel of Improvement

The simple existence of a problem is not enough reason to invest in fixing it, perhaps not now, perhaps not ever. Organizations need a systemic approach to define what good looks like, assess current performance, and make evidence-based decisions about which performance gaps to close. The Tregear Circles replace random acts of management with a metamodel for continuous process improvement. I have recently encountered several examples of the idea that higher process performance target scores are obviously better than lower ones, just because they are … well … higher; that setting a target of, say, 95% is, without doubt, better than a target of 88%, and in striving for improvement we should go 'as high as possible'.

Why Open Source Thrives on Cooperative Competition

Although I’ve spent the majority of my career on the consulting side of the fence I’ve also spent ten years on the client side, in senior IT roles, where I purchased a lot of software.  It was in 2006 that software sales people started offering alternatives to the traditional model of licence plus annual maintenance for proprietary software. These sales people were offering SaaS solutions and subscription-based open source software, neither of which I seriously contemplated buying.  Given that SaaS and open source software are now an everyday part of the IT landscape - why was I entirely unwilling to consider them a dozen or so years ago? The answer is simple. In neither case did they offer the benefits they do today, and, worse, the people selling them struggled to articulate what the real benefits of their offerings actually were. For the purposes of this post I’ll leave the SaaS model aside to instead focus on open source software. 

3 Ways to Measure the Usefulness of BPM

  In the fair dinkum department, the most important question about BPM must be "is it worth the effort?" It works in theory, but does it work in practice? What is the return on process? How should we measure, and report, the outcomes of process-based management?   The Wrong Answer Let's deal with the wrong answer first. It's not about the artifacts. No organization has a business problem called "we don't have enough process models." It is not a business improvement outcome to say we've trained 50 people on Six Sigma analysis, or appointed some process owners, or modelled a process architecture, or assigned process KPIs — these are all necessary, but none is sufficient. To the executive not yet fully engaged with the promise of process-based management, all this activity might sound more like a problem than a solution, more like a waste of resources than a successful outcome. And if that is all that is happening, she would be correct. We need good models, architecture, methods, and training — a metamodel of management — they are a means to an end, but not an end in themselves. Just having management tools is not the point; we must use them to deliver real organizational performance improvement. If our process management and improvement activities are not delivering measurable, objective, proven organizational performance improvements — improvements better than we might have otherwise achieved — then our process activity is, by our own definitions, waste.