These words, generally associated with Capt. James T. Kirk and his 23rd century voyage aboard the starship Enterprise on television's Star Trek, hold meaning for CEOs now, in the 21st century. But, unlike Kirk, who explored galaxies in space, today's CEOs must explore and resolve the white spaces, or gaps, among applications, departments, processes, partners, and customers.
It may not be obvious why CEOs need to understand the operational underpinnings of the corporate architecture. Their job, after all, is to define the company's strategic vision, generate new revenue, and increase shareholder value.
For manufacturers, however, accomplishing the growth mission often calls for innovating products, expanding into new markets, and merging with or acquiring other companies. And for that growth strategy to succeed, execution must be fast, efficient, and cost-effective. And that's where filling in the gaps and creating an integrated, collaborative corporation becomes imperative.
"You can't do a lot of things that the business demands unless you have an integrated infrastructure," says Jeff Kristick, senior director of product marketing at TIBCO Software Inc., a purveyor of data integration software.
It's the behind-the-scenes technologies — application programming interfaces (APIs), data warehouses, middleware, service-oriented architecture (SOA) tools, and Web services — that enable manufacturers to build the critical connectivity layer that can help change the DNA of the corporate infrastructure — and even the culture. By tying together ERP, manufacturing, supply chain, and other systems, and the processes they support, experts say, these technologies can deliver the right information to the right people at the right time, letting managers easily drill down into problems, for example, on the production line.
CEOs don't necessarily need to know how the integration happens, but they must understand the visibility it can provide into how the organization, as a whole, is faring.
"For a lot of CEOs, [the question] of how to execute to a new level of performance is top-of-mind," says Paul Loftus, managing partner of Accenture's Industrial Equipment Practice of North America. Many of the high-performance manufacturers he consults with have established an integrated operating model that defines how they work worldwide. The big picture involves people, policies, and business processes. But the underlying technology is what enables an integrated operation.
"The big trick is to understand that the world is getting smaller and you need to operate consistently around the globe. If you are able to do that, the opportunity [to increase] shareholder value and to create free cash flow is phenomenal. And that is really a CEO's job," Loftus says.
What Lies Beneath
Middleware, SOA, and the like, act as the glue that connects disparate data and processes. This is important, especially in manufacturing, where systems often have been developed in functional silos that can't interoperate because they use different programming languages, file formats, and semantics for identifying assets.
Integration technology provides the connectivity and translation required to get disconnected systems working as one. From a business standpoint, that means information can be seamlessly shared and problems solved as they happen.
For that reason, business leaders are peeling back the layers of their organization to learn what lies beneath. They realize they need to use technology to build a new corporate vessel, so to speak. Its architecture must be solid enough to withstand a competitive blow, and agile enough to speed off in a new direction when opportunity calls. No, it's not Kirk's fictional USS Enterprise; rather, it's the real-life, real-time integrated enterprise.
There are three levels of integration:
- The plumbing: technology that connects applications — for example, enterprise integration software;
- Semantic integration: metadata and master data management software used for defining and standardizing business terminology; and
- Process integration: technology, such as business process management software, that manages the flow of transactions across functional silos.
BEA Systems, Inc., IBM, Oracle Corp., SAP AG, Sonic Software Corp., TIBCO Software Inc., and webMethods (now part of Software AG), among others, have the technology needed for one or all of these integration levels. Applied correctly, these technologies create a tight-knit ecosystem of applications and processes that let people within the corporation sense and respond to internal bottlenecks or external changes related to customers, partners, and competitors.
The successful implementation of these technologies is generally viewed as a competitive advantage. But it can also be an overwhelming task.
In a survey last year of 765 CEOs across 20 industries — including aerospace and defense, automotive, industrial products, and pharmaceutical — IBM found that 87% of the respondents believed that a fundamental change would be required of their companies within the next few years. And transforming their businesses into integrated enterprises topped the list of changes, as 80% of the respondents rated business and technology integration of great importance. Many of the CEOs, however, said they were struggling with an integration gap, and they didn't know how to change it or found the task too complicated.
"Most attribute it to the lack of flexibility within IT," says Sandy Carter, IBM's vice president of SOA and WebSphere strategy channels and marketing.
Fixing inflexibility can't be done at one fell swoop. First, experts say, one must identify the pain point, and then figure out how to automate the process. The automated process can be integrated with something else and then fine-tuned and optimized.
IBM offers the tools needed for more complete integration. Those include SOA tools, such as WebSphere portal (role-based user experience), WebSphere Business Modeler (simulate and model processes), WebSphere Process Server (business process management engine), and WebSphere Enterprise Service Bus (integration logic).
But does the CEO need to know the nitty-gritty details of all that WebSphere can do? No, Carter says. "For the most part, a CEO doesn't care about WebSphere. They care about moving quickly, and being flexible and agile," she says. The discussions Carter has with CEOs typically focus on the value that the technology can bring to the business. Figuring out which integration tools to use to execute on the plan is the CIO's job.
The CIO Knows
M. Dwain Wilcox, vice president of information systems at Serologicals Corp., a global provider of biological products, has led the integration efforts associated with numerous acquisitions. Prior to Serologicals' July 2006 buyout by biopharmaceutical provider Millipore, Serologicals made 10 acquisitions of its own. Quickly integrating technology platforms was critical, Wilcox says.
"If you are truly going to combine businesses and sales forces, and merge the supply chain, you need to integrate systems," Wilcox says. And it has to happen fast. "It can't take two years to integrate."
The executive teams at both Serologicals and Millipore understood that technology is the catalyst for a swift merge. As a result, Wilcox always had a seat at the table in the strategic acquisition discussions. His job was to ensure that the technology could sustain a unified approach. He also had to communicate how the technology could help the business.
"CEOs don't need to understand the technology, but they should understand the need for an infrastructure that supports their strategic business," Wilcox says. And it's the CIO's responsibility to explain it. "If you go in speaking technology first, it's a losing battle. It's got to be more about what you can do to support the strategic business, and how you can use [technology] to trim cost."
Wilcox's ability to communicate how integration technology can be used as a strategic advantage is a quality that every IT professional needs. In fact, industry observers say, next-generation IT teams need to be both technology and business process experts.
"It's a role that bridges what the business is looking for and IT delivery," says Fergus Griffin, SAP's vice president of solution marketing.
As a corollary, perhaps the most important tool that IT can offer the CEO is an interface that provides a view of what is happening operationally at any given moment. "The only concern for a CEO is having visibility into business processes and understanding where to improve processes," says Kiran Garimella, a vice president in the Office of the CTO at webMethods. The company offers a business activity monitoring solution that collects data from different systems and exposes that information in a dashboard. A key element of the interface is that it looks into processes while hiding the technical details from the business user.
AET Films, a manufacturer of specialized plastic films for consumer goods packaging and labeling, has been using similar integration tools from iDashboards for six months. The company chose that tool for its simple user interface and easy integration with AET's existing systems.
AET has three manufacturing sites in North America — in Indiana, Virginia, and Montreal. The company uses a Baan (part of Infor Global Solutions) ERP application. The system includes a decision support data warehouse that AET uses for reporting and ad-hoc queries. At the manufacturing sites, a Foxboro I/A Series control system and a process database from OSIsoft collect data and feed it to the data warehouse. The common data warehouse is where all the integration happens.
"The tool missing was the top-line integration for a high-level view of functional areas," says AET Director of IT Jim Burger. Now the executive team can get detailed information on anything happening in the plants. More important, using the iDashboards BI tools means that "I avoid having to do the difficult and time-consuming [task] of integrating directly from the Foxboro control system into ERP," he says. That's a big deal to Burger, especially because the ERP system he uses is not architected to handle the control data.
The method of integration that a manufacturer chooses will depend on the technology in place and the business's priorities. But the CEO needs to weigh in on that decision. "Integration is a top-down approach," TIBCO's Kristick says.
Filling all of the white space is the CEO's ultimate goal. And it's worth the effort. In IBM's survey of CEOs, more than half of those who said they had achieved extensive integration across their organizations cited reduced costs and higher customer satisfaction as benefits. More than 40% experienced increased revenue and claimed to have more strategic flexibility as a result.
And as Capt. Kirk can confirm, strategic flexibility can be critical, especially when formidable rivals such as the Klingons come calling.