A recent InterSystems survey reveals that, for the majority of CIOs, enhancements to existing systems are still the main focus of software development
For the past few years IT software supplier InterSystems, a specialist provider of post-relational database and application development technology, has been carrying out a continuous evaluation of CIO attitudes and experiences around the twin issues of integration and return on existing investment (ROEI).
Its 2006 survey of 100 UK IT executives provides some revealing insights. A huge proportion – 76 per cent – said enhancements to existing systems was the major focus of software development. Nonetheless, working with existing codebases was not just a matter of keeping them ticking over. Integration of these legacy systems with modern e-business applications is also a big push, at 53 per cent. And integration of legacy applications for other internal business purposes came in at almost the same ratio, 49 per cent.
When asked by the independent third party carrying out the study what these IT leaders saw as the biggest challenges they and their teams faced in software development, the largest single answer, at 63 per cent, came in as “linking legacy systems to new applications”. This pipped “reacting quickly to business changes” at 62 per cent and even that other CIO bugbear, working with budget constraints (58 per cent). Almost as high was the next ticket item, defining or implementing new business processes at 44 per cent. Clearly the problem of working with existing apps is a day-to-day problem for these CIOs, as much as delivering the new stuff demanded by their peers in the business.
"Integration is a daily agenda item for the modern IT shop"
The population that provided these perspectives was composed of a cross-section of the higher end of the UK industrial and service base. Some 16 per cent of organisations surveyed recognise turnover of £10 billion plus, while at the other extreme five per cent see sales of £50 million to £100m. In terms of industry sectors, 17 per cent came from banking and financial organisations, 10 per cent were public sector, 13 per cent were healthcare and 12 per cent manufacturing.
Yet it did not matter which sector the respondents were from when it came to confirming that the consolidation and integration of information systems is a primary business challenge. Public sector, banking and finance, distribution and logistics, and energy and utilities respondents all met the same high-water mark of seriousness – 4.4 out of 5 (where 1 is ‘no importance’ and 5 ‘very important’) – when asked this question. The lowest propriety given to this question was still 4 out of 5, from manufacturing CIOs contacted.
A daily concern
Integration, it turns out, is a daily agenda item for the modern IT shop. Only nine per cent of organisations say less than a tenth of all their IT projects involve some aspect of integration.
At the other end of the scale 11 per cent say “90 to 100 per cent”. In the middle the research team found that at least a fifth of all IT projects being undertaken by this group involve significant integration aspects.
Indeed that proportion could soon change dramatically. The majority – 65 per cent – of those surveyed say the demand for integration projects in their environment is increasing, while 29 per cent of them say a “large, enterprise-wide integration programme is currently in place or planned”; no less than 23 per cent confirm “small, individual integration projects [are] currently in place or planned”. A fair chunk – 45 per cent – say integration takes place on a case-by-case basis, admittedly, but clearly the larger portion of users are doing integration in some form or another on an ongoing basis.
To what end? Users say they are mainly (77 per cent) integrating to provide their organisations with a “single, consistent view of information”, while 57 per cent see consolidation of access to multiple systems to a single point as the driver. But no less than 52 per cent are on the integration path to enable new business processes and 36 per cent want or need to enhance legacy systems with new functionality.
The teams not doing integration, or still facing integration challenges, adds the study, are having to combat a “lack of flexibility in reacting to business changes” (76 per cent), poor availability of vital management information (73 per cent), lack of visibility of information between departments (68 per cent), and worse, lost productivity (58 per cent), inefficient decision making (47 per cent) and even loss of revenue – at no less than a quarter (24 per cent) of the companies employing the CIOs in the survey. If that is the integration project, what are companies using technology wise? Mainly, they seek to use such solutions out of a desire to improve business processes in the organisation (4 out of 5, where 5, again, is ‘very important’), followed by a wish to improve the strategic and operational agility of the organisation as it needs to react to ongoing business change (3.9 out of 5).
Compliance also scores high (3.6), as does a drive to gain competitive edge (also 3.6) and work better with partner and suppliers IT (3.1).
"Users say they are mainly (77 per cent) integrating to provide their organisations with a single consistent view of information, while 57 per cent see consolidation of access to multiple systems to a single point as the driver"
When it comes to how much they are spending, perhaps worryingly, a quarter say they cannot confirm a figure.
But 14 per cent are committing between 41 per cent to over 51 per cent, and one in five report that they devote between 10 to 20 per cent of their precious IT budget to this end.
Perhaps unsurprisingly 34 per cent see their outlay for integration software going up this year and 41 per cent will keep it stable at last year’s ratio. And someone is clearly going to lead the charge here. Many companies now have a specialist group that co-ordinates all integration activity and enforces standards across the enterprise (44 per cent). In healthcare this rises to 70 per cent, is still 64 per cent in telecoms, half of all distribution and logistics firms have such bodies and it is, possibly surprisingly, banking and finance that has the least representation, at 26 per cent.
Perhaps they should be conferring with their colleagues in other sectors – they might tell them why and how integration software projects can help.
When asked if such programmes can provide real benefits to the organisation, again on the 1 to 5 metric, manufacturing (4.7), healthcare (4.6), and retail (4) among others all agreed strongly with the proposition.
Indeed, in the equivalent 2005 survey no less than 93 per cent of cases where integration software had been effectively implemented had provided real benefit, ranging from better control over business processes to more timely data sharing.
At the same time, a disturbing 42 per cent of legacy systems were not being successfully integrated.
So what do these findings mean for CIOs and their companies? One rational approach is to acknowledge that there is huge integration need; users are facing this issue in what may be to some a surprisingly high proportion of their IT initiatives, especially at the larger (enterprise/major public sector body) end.
Integration covers far more than just stitching older systems together – it draws in the very latest e-business imperatives too. And organisations expect a significant payback for all this hard work – they place a high value on integration going a long way to fixing some of their core business-IT gaps.
A sensible development of the argument at this point may be to review what options users have out there. How are they dealing with integration? Is there such a thing as an integration ‘market’ to evaluate?
One thing is certain – this user base is doing something with real software on real projects and they do not think integration software is a commodity item yet. But what is out there?