The paper describes the value of application integration and the place of business process management. It focuses on the duet BPM-SOA as the successful solution to build the adaptive enterprise of the near future.integration, ERP, enterprise applications, Business Process Management (BPM), Service Oriented Architecture (SOA)

Hurbean, Luminita

English

Research Papers in Economics

The business of process integration 
 
Luminiţa Hurbean, Ph. D. 
West University of Timişoara 
luminita.hurbean@fse.uvt.ro 
 
Substitute of Abstract 
"Imagine if you didn't have common electric outlets and plugs in your house, and every 
time you bought a new appliance, you had to wire up the appliance to the wires in your wall. 
And everybody's wires in everybody's walls were different. And everybody's appliance wiring 
was different. That's really the way it works today with trying to integrate business software 
applications."  –  Paul  Margolis,  founder  of  the  Open  Applications  Group 
(http://www.openapplications.org/). 
 
Keywords:  integration,  ERP,  enterprise  applications,  Business  Process  Management 
(BPM), Service Oriented Architecture (SOA) 
 
The  paper  describes  the  value  of  application  integration  and  the  place  of  business 
process management. It focuses on the duet BPM-SOA as the successful solution to build the 
adaptive enterprise of the near future. 
 
Introduction 
Enterprises grow or change in order to meet market demands and remain competitive – 
new  business  requirements  drive  the  expansion  of  IT  resources.  Successful  business 
development  depends  greatly  on  the  ability  to  update,  integrate,  customize  and  deploy 
applications rapidly and provide fast, reliable, interactive data access to end users. In order to 
be  effective,  organizations  must  rigorously  manage  the  change  in  business  processes. 
Comprehensive  business  integration  is  required  to  manage  these  increasingly  complex 
information resources in a cost-effective manner. Applications and databases must be blended 
using an approach that not only provide access to the information and business processes 
within the system, but also compounds their value as an integrated unit. 
The  business  environment  is  constantly  changing,  competitors  are  breaking  in  by 
aggressively  pricing  their  products,  new  technologies  are  coming  up,  customers  are 
demanding more transparency in their order status. All stimuli require responses, timely and 
effective, responses that need to be implemented fast, but controlled. The processes changes 
need to be strictly managed.  
Getting  applications  to  work  with  each  other  remains  a  big  challenge  for  many 
companies. Like some incompatible puzzle parts, these applications are a big hassle for the 
companies, keeping them from investing in potentially innovative software that could bring 
real benefits. On the other hand, the cost of integration is high and is growing, because it is 
not limited to installing new applications only. The larger expense in time and money comes 
from the huge task of maintaining the integrated system. Some like to call it "the dirty little 
secret of applications software". 
In an enterprise system, it is critical that ERP applications don't operate in a vacuum but 
communicate with all applications that feed data into a particular process. Even though the 
magic word and main aspiration for ERP is integration, in many companies applications for 
SCM or CRM are still disconnected from core ERP systems. Big vendors have tried to lessen 
the burden by developing their own integration technologies – SAP Netweaver is a good 
example here. 
 Aiming for internal and external efficiency improving  
In  today's  business  environment,  budgets  are  stretched  and  companies  have  less 
resources  to  invest  in  new  information  technologies.  IT  managers  became  more  selective 
about how and where worthy capital is invested. 
As organization expands, there is a growing need for information flow between various 
divisions  and  departments  within  the  organizations.  Integration  ensures  that  different 
compartments  can  share  information  and  work  together  easily,  increasing  efficiency  and 
lowering operational expenses and resource use. Moreover, integration between departments 
results in better information for enhanced decision-making. 
Application  integration  and  business  process  management  provide  a  scalable 
mechanism for  reliably  upgrading business and  integrating  existing and future systems to 
enable efficient information retrieval and performance analysis. 
One of the most important aspirations of the present-day enterprise is to better integrate 
with its customers and suppliers to reduce costs and improve revenues. Open standards are 
required so that organizations can integrate solutions and their underlying business processes 
from multiple vendors based on existing and future requirements. 
Furthermore,  in  order  to  meet  the  demand  for  online  services,  organizations  must 
expand their extranets, adding functionality and accessibility to corporate data. An expanded 
extranet requires that applications be integrated with the web portal in an efficient and secure 
mode, so that customers have immediate access to financial data and transaction functionality. 
 
The integration avenue 
The information system practice demonstrates that many applications were designed to 
meet the requirements of a particular problem and business process, without regard to the end-
to-end business processes and other application islands of the organization. A large company 
could have applications that support finance, accounting, human resources, sales and other 
departments,  without  any  association  between  the  systems  or  underlying  business  logic. 
Attempts to eliminate redundant data entry and the many errors it naturally created eventually 
led to application integration efforts. 
As  companies  seek  to  share  information  across  these  systems  and  implement  new 
enterprise spanning processes, they build customized interfaces for the required application 
integration  (see  Figure  1).  After  a  while,  multiple  interfaces  get  to  be  built  between 
applications without taking into consideration the architecture of the global environment. 
 
Manufacturing  Financial App. 
Accounting  Fixed Assets 
Sales  
Procurement 
Salaries 
ETC. 
Too much spaghetti 
integration 
 
ERP 
One system 
does not 
provide the 
solution 
Integration 
platform  EAI 
SCM 
BI 
CRM  Web 
ERP 
Legacy 
B2B 
Internet 
DBMS 
ERP 
CRM  SCM 
Legacy 
1  2 
3  4 
 
Figure 1. The enterprise applications integration trail 
Approximately  fifteen  to  twenty  years  ago,  organizations  began  assimilating  their 
legacy systems in specific industries or divisions by integrating enterprise applications via data  transformation  and  routing,  event  triggering,  process  automation,  and  adapters. 
Enterprise  resource  planning  (ERP)  was  the  first  major  achievement  for  the  integration 
challenge, but it didn't last, as new applications arose. Besides ERP, customer relationship 
management (CRM), and supply chain management (SCM) vendors were flourishing at the 
dawn of the 20
th century. More and more enterprises automated their transaction systems with 
ERP software while including the information systems from CRM and/or SCM software.  
The  point-to-point  integration  involves  the  development  of  specific  integration 
solutions – based on traditional client/server tools and communication middleware – that can 
meet integration requirement of the enterprise applications. The pros are low costs and quick 
implementation,  while  the  main  problem  appears  when  the  number  of  point-to-point 
integrations increases. More new applications need to be added – that's when administration 
and maintenance become complicated and the risk of error increases considerably. Costs are 
no longer low… 
EAI emerged as a strategic initiative in the beginning of the new century and got to 
more than 2 billion USD market last year. In the last five years, business process integration 
(BPI) solutions, namely business process modeling, business-to-business (B2B) connectivity, 
and  vertical  industry  process  templates  were  built  on  top  of  these  enterprise  application 
integration (EAI) systems.  
We should point here that the integration (see Figure 1) is categorized into two types: 
internal integration and external integration. Internal integration includes all the integration 
aspects  within  one  enterprise.  While  EAI  is  the  typical  example  of  internal  integration, 
external integration covers all the possible integration patterns across multiple enterprises 
(B2B). 
Today,  the  market  offers  BPM  solutions  that  incorporate  both  the  EAI  and  BPI 
functionality in addition to functionalities such as workflow, business activity monitoring, 
web services, rule engines, and portal capability. 
 
Process integration requirements: BPM and SOA 
An integration project is about tying together disparate systems (operating systems, 
different  applications,  multiple  databases)  and  entities  (organizational  units,  maybe 
geographically  dispersed).  It  attempts  to  solve  an  organization's  challenges  in  business 
processes and workflow management.  
Business  processes  play  a  more  and  more  important  role  in  enabling  business 
application integration and collaboration across multiple organizations.  
A business process is a chain of events that achieves a business requirement. Most 
activities associated with doing business are referred as processes. 
In the business practice an enterprise needs to integrate distinct business processes, not 
considering the underlying technical infrastructure. Therefore, the end result could comprise 
several applications and data elements that are integrated to produce the desired outcome. 
Business Process Management arrived on the integration scene as a structured approach 
employing methods, policies, metrics, management practices, and software tools to manage 
and  continuously  optimize  activities  and  processes.  Some  analysts  consider  it  as  a 
management subject that oversees the business process environment, with the declared target 
of improving agility and operational performance. 
The  emerging  architecture  for  the  integrated  enterprise  is  service  oriented,  which 
represents  individual  business  logic  components  (parts  of  existing  applications)  and 
recomposes  them  into  new  business  processes  in  response  to  the  evolving  business 
environment or even in anticipation. In a shorter definition, AMR Research gives a good 
encapsulation of SOA as "a standard-based approach to managing services made available by 
different software packages for reuse and reconfiguration". Service  Oriented  Architecture  (SOA)  is  a  conceptual  architectural  perspective  and 
design philosophy to think about "what a business does" in more granular terms so that a 
business can be  a mix of core, internal functions and outsourced ones provided by  other 
businesses. 
Speaking of the architecture for the integrated enterprise literature also markets the web 
services.  Web  services  express  a  physical  architectural  idea  and  a  set  of  standards  and 
techniques for integration. It's the IT view of integration, while SOA is the business view of 
integration. 
After the strategy phase, where desired process changes are identified and objectives 
stated, the integration project follows the next phases: 
￿ the  design  phase,  when  the  functional  business  processes  and  the  supporting 
technologies are documented in process models. As part of SOA, the functional processes are 
treated as service "consumers" and software applications as service "providers"; 
￿ the  implementation  phase,  concerned  with  the  implementation  of  the  technical 
services  that  were  modeled  for  functional  business  processes.  For  this  phase  a  service 
repository is valuable, in order to relate technical service descriptions to functional process 
description. The enterprise services are treated in detail; the currently available services are 
mapped and a scale for future needs is designed; 
￿ the  control  phase,  that  is  critical  in  establishing  if  the  defined  objectives  were 
achieved. Then, the performance capabilities of SOA are measured in the final system. The 
BAM  (Business  Activity  Monitoring)  component  not  only  evaluates  the  success,  but  it 
identifies the weak points in the IT architecture. 
The described phases materialize into a BPM lifecycle, as the results of the control 
phase serve as input for continuously improving and optimizing business processes. 
A well executed integration project enables the enterprise to quickly adapt to changing 
business  situations  without  interruptions  in  the  business  activity.  BPM  facilitates  the 
observation and analysis of processes, time and resources implicated, making the necessary 
adjustments to meet the changing requirements. 
 
Conclusions 
By  escalating  the  software  choices,  the  market  offers  at  least  four  categories  of 
applications  that  enterprises  must  integrate:  ERP,  CRM,  SCM,  and  specific  vertical 
applications. 
It is imperative in today's business environment for organizations to have a consolidated 
view of information stored in multiple applications and databases, and a strenuous execution 
of business processes. More and more companies recognize that the solution lies in finding a 
way to better integrate existing systems and processes into the organization.  
Many businesses have tried to solve the integration problem by staying with only one 
vendor.  The  drawback  is  about  getting  less  than  expected,  mainly  because  one  software 
provider  is  unlikely  able  to  offer  100%  of  the  business  applications  required  in  an 
organization. Even if the internal integration is, let's say, solved, the external drivers require 
integration to business partners such as customers or suppliers. Single sourcing one's own 
software doesn't fix the problem. 
Another widely adopted solution is the point-to-point integration (see the 3rd stage in 
Figure 1). 
Even so, complexity is hard to manage, and the step forward leads to EAI, based on 
SOA and BPM. What's the connection between these two? Many organizations have BPM 
and  SOA  initiatives,  but  most  of  these  efforts  are  independently  initiated  and  often 
disconnected.  BPM  initiatives  typically  start  in  the  business  area  and  SOA  in  the  IT department, driven by the developers' interest in newer technologies and easier application 
integration.  
We  emphasized  in  this  paper  that  BPM  and  SOA  are  co-dependent:  BPM  puts  a 
business face on SOA as a key enabler of process flexibility for automated tasks, and SOA 
delivers the BPM performance improvement results faster, with greater agility for constant 
change.  
However, there's a lot more to come here, as the interest in SOA is just beginning. The 
challenge is to couple SOA and BPM, aiming not only the operational performance, but the 
business process excellence. 
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Editura Economica, Bucuresti, 2004 
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4.  http://www.sap.com/solutions/netweaver  
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Century, MIT Press, Cambridge, 2003  
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The business of process integration

The business of process integration

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