(Editor’sNote: E-commerce Strategies is a new weekly column that aims to help finance executives evaluate the latest developments in E- commerce.)
If a grocer in downtown Boston is awaiting the delivery of a truckload of frozen vegetables from Iowa, what can the grocer do if the truck suddenly gets snarled in a traffic jam, and falls hours behind schedule?
In real terms, perhaps not much. But let’s suppose our hypothetical grocer has hired Globeranger, a privately held, Texas-based mobile asset management company to help him track the order. The satellite- based service delivers real time logistics and transit data via pagers and cell phones.
Globeranger’s Web site tells clients, such as the grocer, where their shipments are and whether or not they’ll be late. If a shipment is behind schedule, a client can develop a contingency plan.
But as Globeranger has grown, it has struggled to integrate the systems of its customers and their business partners.
This presented Globeranger with a logistical nightmare of its own. So, four months ago, the firm spent $500,000 on enterprise application integration system from CrossWorlds.
For a firm of Globeranger’s size, $500,000 is no small sum. So how was the technology team at Globeranger able to convince management that such an expenditure made sense?
“Dollar for dollar, the investment can be justified just based on the expected labor costs involved in implementing customer integrations without [CrossWorld’s software],” says Rakesh Garg, director of network architecture at Globeranger. Application integration work is complex, and it’s not unusual for a project to take more than a year.
But Garg says that the skills required for building and maintaining EAI technologies are not as rare or expensive as those required for carrying out custom integration projects internally.
He asserts that the investment also allows Globeranger to service a wider range of customers since its systems are now capable of communicating with a larger number of business applications at a lower cost.
Garg concedes that integrating a company’s systems with those of its customers and suppliers has long been a challenge for many companies. But before EAI vendors came on the scene in the mid 90s, companies went through the pain of hiring expensive programmers to write the code that dictates how one application communicates with another.
With CrossWorld’s software Garg says, “We have to write less code, we can deploy much faster, and can reuse the [integration] work we have already done. It also makes the problem of maintenance and keeping up with standards much easier.”
CrossWorlds saves his company the hassle and expense of having to hire in-house personnel to update code and tweak applications every time a business process or standard changes, or whenever another customer signs on.
Garg says Globeranger selected CrossWorlds because its products were well suited to the logistics industry.
CrossWorlds “has more out-of-the-box adapters for supply chain and logistics environments,” he adds, which significantly reduces the amount of time it will take Globeranger to integrate its systems with those of its customers and information suppliers.
“If you have a ready made adapter for a particular customer’s systems, it is a lot easier for that customer to deploy the adapter than it would be if you just had the tools to build the adapter yourself,” Garg comments. But even with CrossWorlds’ adapters, the integration is no easy feat, and he cautions that some degree of customization is usually necessary.
“You always have to modify the product somehow to make it fit the [integration] problem you’re trying to solve,” he claims.
Garg also says he was attracted to CrossWorld’s process modeling tools, although other EAI vendors offer similar graphical tools that allow companies to graphically model business processes so they can more accurately choreograph their applications with those of their customers.
“Process modeling tools are very critical for making sure that the information flow among business partners is consistent with internal processes,” says Garg. Transactions are very system specific, he comments. For example, a transaction may look a certain way if it is generated by SAP’s ERP software and a different way once it is received by Siebel Systems’ customer relationship management system. As internal business processes change, modifications must be made to the ways in which two applications are integrated.
The modeling tools also eliminate much of the complexity associated with changing business processes, says Garg. It is much easier to modify a model tool’s graphical representation of the business process than it is to rewrite underlying code.
Globeranger uses the modeling tools to integrate its systems with its growing customer base.
“If we are going to form a relationship with a third company, which is similar to a relationship we already have with a partner, we can simply modify the existing relationship using graphical tools, and deploy a new relationship much more quickly than if we had to write code every time we formed a new relationship,” Garg stresses.
Because the bulk of Globeranger’s customers are Fortune 500 companies that have installed enterprise resource planning and supply chain management applications from vendors such as SAP, Oracle, i2 Technologies, and Manugistics, most of the company’s integration involves links into those systems, says Garg.
For a software program, “the statement that ‘your shipment is going to be delayed by an hour’ is a complex business transaction,” he says. “It needs to be coordinated with the SAPs and i2s that are handling the orders and production plans,” Garg stresses.
Having a pulse on the movement of goods, for example, can be useful for an ERP system from SAP that is managing an order and needs to inform customer support of the location of a shipment. It can also benefit a production planning system that is managing the assembly of a particular car model and needs to know about delays in dashboard shipments, for instance.
What’s more, because many of Globeranger’s customers are large, established companies with multiple fragmented legacy systems, integrating its customer’s home-grown applications is a bigger challenge than integrating SAP and PeopleSoft applications, says Garg.
“CrossWorlds gives us the necessary tools to extract data from legacy applications,” he comments.
But Globeranger’s integration challenge does not stop there. It’s own internal applications must also be tied to those of its partners, such as Mapquest, for instance, which provides real time traffic conditions, and others that supply the information Globeranger relies on to provide its service.
So not surprisingly, learning how to use the integration software itself was no piece of cake. As part of its services, CrossWorlds ran an intensive two-week training program for Globeranger’s staff. As Garg says, “It takes some effort to become familiar with the various aspects of the technology.”