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| Future Focus - Tomorrow's Insights for Today's Decision Makers |
| An Integration Model for the Next Economy – Part 1 |
September 2002 |
Aaron Kumove -- Managing Director, Horizon Consulting |
| For a number of
years now pundits have described a future networked economy where companies
will participate in extended electronic value chains with the Internet
as the medium that makes this possible. The reality however is that
most companies are neither ready nor capable of participating in such a
model today. There are of course exceptions, (Cisco and Dell being
two prominent examples), but they are just that, exceptions. Very
few companies are in a position today whereby their own internal process
and technologies can be marshalled to reap the advantages in innovation,
speed, scale and cost that can be realised by participating in an extended
electronic value chain.
As discussed in this column over the last few issues, Web Services have been touted by the IT industry as the key enabler for electronic trading and participation in electronic value chains, but the Web Services model is not comprehensive enough to facilitate this transformation on its own. What is needed is a broad spectrum integration and process model that can span intra-organisational and inter-organisational domains. I define this model in a multi-layered fashion, with services at each layer relying on the services of lower layers as follows:
At the lowest level of the model we have a messaging layer whose purpose is to ensure that information can be exchanged between disparate systems in a consistent manner regardless of the source, destination, or platform (h/w, operating system, database, language). Today for many organisations consistency is what is missing at this level. What is typical is to find a myriad of point-to-point custom built connections between systems that need to share information utilising a variety of technologies and protocols. With a small number of applications this is manageable, but as the number of applications grows linearly, the number of interfaces between them grows geometrically! The significance of this growth and the lack of consistency of the interfaces become manifest in the form of management complexity and cost. At the transformation layer we need the ability to mediate the conversations between participants such that the messages are understandable to all participants. Think of this much as you would a translator who sits between two parties who speak different languages and converts messages in real-time into native languages understandable by each party. At the Rules layer we need the ability to make some intelligent decisions based on an understanding of the content of messages after they have been transformed. Transformation on its own does not mean that we can understand the meaning of a message and therefore take appropriate action. At a Rules layer we automate the application of judgement and subsequent action for routine transactions flowing through this layer. At the Process layer the view becomes much more holistic, designing and viewing the combination of functions delivered by lower layers within the context of a larger business process. This layer also represents the transition in the model between a “plumber’s” or technician’s view of the world and a business analyst’s or architect’s view of the world. This is a key inflection point as it shifts the focus clearly away from the technology domain to a business domain. It allows us to design and view business processes rather than technology building blocks. At the Reporting layer of the model we have a need to monitor the operations and service delivery performance of the underlying processes, the functions that comprise them and the performance of the underlying “plumbing” in ensuring that these processes are meeting service level standards. This same consistent model can be equally applied within an organisation or between trading partners. The caveat however is that if unless an organisation has organised its IT infrastructure and management around such a model, and applied this model internally first, a scalable B2B trading scenario is very difficult to achieve. After all, if you haven’t got a handle on your own inner workings how do expect anyone else to be able to tap into them or you into theirs? Over the next few columns I will delve further into this model and examine the opportunities and options for rationalisation, simplification, cost reduction and innovation that such a model can provide, including a discussion of the kinds of standards and products that participate at the various levels of the model
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Aaron Kumove -- Managing Director, Horizon Consulting |
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| Copyright
© 2002 HORIZON CONSULTING
Horizon Consulting is a leading provider of successful strategy and management implementation services for knowledge economy organisations. Our clients are world leaders in obtaining strategic advantage through eBusiness and Information Technology. Horizon Consulting
PO Box 2252, Wellington, New Zealand; Tel: 64 4 939-9944;
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