Making application ends meet

AN OLD MAXIM insists that if you have to ask how much it costs, you can’t afford it. Unfortunately for CTOs, this pearl of wisdom applies perfectly to EAI (enterprise application integration) projects, which invariably add considerable expense to deploying applications. Whatever EAI project you’re facing, several major — and some hidden — factors will affect its cost.

The expense of an integration project varies depending on the applications involved and the level of integration required. Some analysts indicate that EAI projects will consume as much as 75 cents for each dollar of your IT budget. IT leaders are fast learning just how much these projects can cost: 19 percent of our survey participants have allocated 30 percent or more of their IT budgets for EAI this year.

The budget impact of integration activities is often difficult to quantify. Estimating it for implementing a new application that requires no links to other software is relatively easy — the deployment effort is usually proportional to measurable factors, including the number of users, customers, and transactions per day. In fact, 50 percent of survey respondents indicated that such projects were completed in six months or less, whereas 22 percent tend to wrap theirs up within one year.

But as soon as a new package must be added to the mix, the deployment instantly becomes far more complicated, expensive, and time-consuming: Only 39 percent of respondents reported completing such projects in six months or less.

Paradoxically, homegrown applications can prove more difficult to integrate than packaged software. Your developers won’t like this, but products from ISVs generally offer better data architecture, a wider range of functionality, and better documentation. Your company may save money by developing a home-built application, but that economy could be offset by a more costly integration. Forty-eight percent of survey respondents indicated complete success with integrating packaged software, but only 28 percent have been successful with home-built applications.

In short, if tackling your integration project means using applications developed in house, plan to allocate more time and resources for tasks such as documenting the application, coding functionality that may have been overlooked, or redesigning the database to make room for additional information. Furthermore, if the developers of those legacy applications left the company, you may have to hire outside help.

Whatever your EAI project, especially if it involves legacy software, you may benefit from a contractor. Even if you’re only dealing with packaged software, the vendor can be the CTO’s most precious source of information when it comes to setting an accurate budget and schedule. Although outrageous hourly fees may be a deterrent, the experience of a consultant can be the most cost-effective way of identifying possible problems early in the game and avoiding embarrassing and costly dead ends for your integration project.

If you decide to hire outside help, you will be in good company. Whereas 30 percent of our survey respondents indicated that they manage their integration projects internally, the remaining 70 percent revealed varying degrees of involvement with consultants, evenly spread from minimal contributions to managing the entire project.

This diversity in answers indicates that there is no common pattern for how much outside help your company may need: It depends on various and often controversial choices, such as favoring a faster but more expensive deployment, avoiding training internal staff on technologies that may be rarely used, or deploying several parallel projects.

Our readers were equally divided about the single major challenge to integrating applications. Interestingly, only 8 percent pointed to cost as a primary obstacle. But when asked to name additional barriers, almost 73 percent of respondents conceded that budget constraints are the most challenging aspect of integration. This apparent dichotomy reveals what happens when companies face an integration project: The concern for so many technical and practical issues diverts attention from significant implementation costs.

Just how much of the IT budget should you expect to spend on integration during the next 12 months? Again, there is no definite answer, but our survey revealed some interesting insights. About one-third of the survey participants indicated that as much as 20 percent of their IT budgets will be dedicated to EAI issues. For one out of five respondents, EAI will consume as much as 50 percent of their IT budgets, while a small number anticipate an even greater impact. And 25 percent are already planning to spend as much as $100,000 in 2002 on Web services, which is gearing up as an important EAI alternative.

Most astonishingly, more than 40 percent of the survey respondents could not quantify how much future EAI projects will cost — a clear indication that even very qualified IT professionals can be at a loss when facing the intricate EAI maze.

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Source: www.infoworld.com