Enterprise application integration: EAI is the soluble glue needed for modular relationships that allow organizations to be flexible and responsive to market demands.

• Author: Gable, Julie
• Position: TechTrends

At the Core

This article:

* Defines enterprise application integration (EAI) concepts and technology

* Examines EAI's potential contribution to business performance

* Identifies information management issues arising from EAI use

In the December 2000 issue of InfoPro, Bob Tillman, director of public relations and government advocacy for ARMA International, wrote of a visible future where new business models include modular corporations, outsourcing, and network relationships: "Modular relationships provide firms with greater flexibility, a more rapid response to market changes, a greater competitiveness in the short run, and less risky innovations. It is a future in which systems built to change are more valuable than systems built to last."

Enterprise application integration (EAI) is a kind of technological Velcro, enabling computer systems to accommodate such change. EAI allows diverse systems to connect with one another quickly to share data, communications, and processes, alleviating the information silos that plague many businesses. The benefits of assimilating new systems without prolonged programming efforts are apparent following merger and acquisition activity. EAI solutions provide a way to connect the systems of collaborators, partners, and others for as long as necessary, decoupling when the relationship ends. EAI is, in essence, the soluble glue for the modular corporation.

In its April 2001 report for AIIM International, "Enterprise Applications: Adoption of E-Business and Document Technologies, 2000-2001: Worldwide Industry Study," Gartner defines EAI as "the unrestricted sharing of data and business processes among any connected applications and data sources in the enterprise." Gregg Wright, senior vice president for e-solutions services at McLean, Virginia-based Information Management Consultants Inc., defines EAI as "a strategy for making business processes more valuable ... in its simplest form [it] involves passing data between application systems, and at its most complex, [it] involves rationalizing overlapping business processes, disparate data structures and diverse technologies." Market forecasts for EAI predict it will be in the $11 billion to $12.5 billion range by 2005 with 22 percent annual growth, according to Meridien Research.

Industry-Specific Implementations

EAI is considered strategic because its potential contribution is measured in terms of attaining or exceeding key performance and competitive benchmarks for entire industries, as noted in the following examples.

Banking. The basis of competition in banking and financial services is customer retention. Customers with multiple accounts are less likely to change, but most financial institutions have stovepipe systems for credit cards, checking, savings, mortgage, brokerage, and other services. An EAI implementation would integrate the systems so that a data warehouse can aggregate account data, provide a single view to the customer, and recommend what additional products the customer should be offered. In EAI systems instituted at Bank of America and Royal Bank of Canada, a transaction in one account triggers an event in another process for a...