The flow of business documentation and data between systems and trading partners is the lifeblood of today’s agile and fast-growing organisations. Human processing error is the biggest cause of business coronary disease resulting in slow performance, slack decision making - and possible death. There’s little wonder then, that many businesses are removing manual processes from the loop by getting systems talking directly to each other.

There are essentially two ways of doing this. Either you can use integration software to get data and documents flowing directly between systems and trading partners, or you send messages from your existing system out to a thirdparty message broker and they look after the delivery.

Option 1: Integration software

Integration software translates data and commands from the format of one application into the format of another. It is essentially data and command conversion on an ongoing basis between two or more incompatible systems.

January 2004

Traditionally, implementing application integration has been done by tedious programming to maintain communications between different applications as they are revised and eventually replaced with newer architectures - creating an enormous programming burden on businesses.

The trend today is to use messaging middleware, applications servers and other specialised integration products that provide a common connecting point between applications. If the target machine is down or overloaded, the software stores the data in a message queue until it becomes available. The messaging system may contain business logic that routes messages to the appropriate destinations and reformats the data as well.

Messaging middleware and email messaging systems provide similar transport functionality. The primary difference is that messaging middleware deals with transactions between programs, whereas email messaging deals with memos between people.

Pacific Retail Group: Extending the retail channels
Locally, companies are making good use of these solutions. Pacific Retail Group opted for IBM’s WebSphere solution to integrate its back-end systems and extend them to the online channels. When someone places an order at a Noel

Leeming store the transaction is immediately sent to the Direct Payment Solutions (DPS) internet clearing bank, and once approved comes back and generates an internal customer order for delivery or collection. It debits the stock or reserves it and there’s no manual process until it is given to the customer. The system automatically tracks orders, updates catalogues and handles online payment processing.

“We’ve gone into this with a clear goal of driving additional bottom-line revenues within a cheaper cost model,” says Pacific Retail’s general manager of IT, Brent Powell.

Ivanhoe: Sharing info from Mongolia to Jo’burg
Auckland-based Tranzsoft Group recently signed an agreement with international mining conglomerate Ivanhoe Group for the supply of a worldwide integrated information and document management system to allow quick access to information within the company’s geographically dispersed operations. The objective is for a manager in, say, Johannesburg to be able to view all documentation and correspondence on an exploratory mission in Mongolia, for example. Not only will they access documents, but the system also registers the actual data within the documents, which facilitates a deeper level of data mining of all information developed globally by the company. Dr Rajiv Kaushik, Ivanhoe Group CIO, says the impact of the changes on Ivanhoe will be both technological and financial. “The system will enable management to make more informed decisions resulting in major financial benefits, as well as speeding up decision making and the dissemination of timely information to management and investors alike.”

Paykel: Leveraging legacy for supply chain leap
Closer to home again and Paykel Engineering had Olympic Software develop a Microsoft-based front end e-commerce system, handling orders between customers and suppliers, that integrates with their existing legacy system using Microsoft BizTalk Server. The company has been able to set itself up as the ordering hub for the industry, receiving orders and then either fulfilling them or passing them on depending on whether they are the supplier or not. Early adopter Wayne Millard, procurement manager for Richmond, says the intended benefits to Richmond are a significant reduction in the number of invoices handled and therefore a reduction in the admin costs associated with the purchasing and payment process.

“Previously we had a significant number of vendors all sending in invoices for payment but now we get it all on a weekly electronic invoice which is uploaded directly into our financials which is only a very short importing process,” he says.

Toyota: On course with BEA
Toyota Australia recently chose BEA WebLogic Integration 8.1 as the software platform for its eBusiness Transformation Program, one of the largest IT integration projects ever undertaken by the company. The programme is an initiative to integrate the systems and processes that connect Toyota and its trading partners to achieve real-time information access, enhanced two-way business visibility, and improved supply chain performance.

“More than $10 billion annually flows through Toyota Australia’s extended value chain,” says Toyota’s Chris Thomas. “We realised that integrating the disparate systems throughout that value chain would allow us to achieve considerable process improvements and cost savings while improving customer satisfaction.”

A leader in the integration market, BEA is driving the trend toward merging application development and integration into a single solution suite. This means users can easily build integrated applications to support business processes - with dramatically reduced time and coding requirements.

Mainfreight: End of an eight-year quest
Microsoft’s .NET also embraces the philosophy of integration by bringing together a set of software technologies for connecting information, people, systems, and devices. This new generation of technology is based on Web services - small building-block applications that can connect to each other as well as to other, larger applications, over the internet.

After several acquisitions and with global expansion well under way, Mainfreight found itself operating a range of disparate systems. The flow of information between Mainfreight and its customers was inconsistent, and it was not possible to achieve a seamless view of all information relating to a customer’s order. The company wanted to maintain its legacy systems so used Microsoft .NET to aggregate the information from each of these to provide staff and customers with instant online access to tracking and account information. The launch of its ‘Mainchain’ system earlier this year ended an eight-year quest for an affordable solution.

Stevensons: Concrete case for integration
Other companies use integration solutions for major upgrades and system changes. A good example is Stevenson and Sons, which used locally developed Standard Legacy Interface Kit (SLIK) for its recent transition from its legacy ERP system into J D Edwards (now Peoplesoft).

Fuji Xerox: Consistency across 14 offices
Instead of having to change multiple systems to maintain customer data, Fuji Xerox New Zealand now deploys a message-broking server to create a single repository and point of entry for handling customer orders. It overlaid a Sonic Software’s SonicMQ and SonicMX message-broking servers which replicate data, where necessary, throughout 14 offices around the country, thus reducing overheads and ensuring data integrity.

Option 2: Third-party message brokers
This option is well suited to those looking to exchange documentation with trading partners in their supply chain. It involves a third-party message broker that will take your system outputs, send them to your trading partners in the format they require and vice versa. For example, once the broker knows the format that a supplier can receive a purchase order in, it can then automatically send that supplier orders from all purchasing companies in that format, regardless of the original format that each purchasers send to the broker.

Local providers of this service include Electronic Commerce Network (ECN), EDIS Group, and Tranzsoft. ECN (now owned by New Zealand Post) is a pioneer in this area, handling between 20,000 and 30,000 messages most days on behalf of more than 150 organisations. Just like the telephone network in the early days, these types of networks become increasingly attractive to join as they grow and more trading partners become engaged. Providers of these services therefore often focus on industry verticals to gain critical mass. Tranzsoft is providing the document exchange and procurement gateway for New Zealand’s medical industry, expecting to have five hospitals and at least 30 medical suppliers using the Medical Industry Association’s Health Exchange by the end of the year.

Meanwhile, one of the focus areas for ECN is the hardware and building supplies sector, where it acts as the document exchange gateway between most of the leading retail outlets and many of their suppliers. Suppliers can either integrate directly with ECN, or, if they are not that technically capable, can simply log on and pick up orders, send invoices or purchase order acknowledgments. From a supplier’s perspective, having online transactability with all the big five retailers means they can leverage the one investment over and over. What’s more, by engaging and making it easier for the retailer to do business with the supplier, the supplier is thereby enhancing the likelihood of getting onto the retailer’s preferred supplier list.

The following diagrams demonstrate how ECN simplifies B2B integration for the hardware and building supplies industry: