The Future of Enterprise Integration: Strategic and Technical Issues in External Systems Integration

What do IT and business executives need to do about enterprise systems in the years ahead? This paper reports the findings of an 18-month study, sponsored by the Advanced Practices Council of the Society for Information Management (SIM) International. The study addressed systems integration issues with both an internal and an external focus, but this chapter primarily addresses external systems integration. External systems integration refers to IT-mediated transactions between independent business entities, for example, between a company and its customers, suppliers, or other business partners, such as co-producers and banks, and it is important for both economic and strategic business reasons. Today external systems integration involves many technologies and business arrangements with different pros and cons, but they can be grouped in two broad categories: one -to-one or one-to-many approaches that link an individual company with its business partners and hub-andspoke approaches that provide the possibility of many-to-many connections. One -toone approaches are most prevalent, though hub-and-spoke approaches may offer greatest business value in terms of cost and fit with the dynamic business environment of mergers, acquisitions, and divestitures and multi-party business arrangements, such as business process outsourcing and supply chain facilitation. Few companies today have a systematic strategy for dealing with external systems integration. Both business issues and technical issues should be addressed in an external systems integration strategy.