Simply put, e-Business supports the flow of goods and services from their origin to their endpoint, the customer. The components of the e-Business may include the original suppliers, multiple production operations, the logistics operations, retail, the customer, and even the customer's customer. For example, an organization that builds birdhouses has an e-Business that includes the lumber company that processes the trees into lumber, the plant that turns the lumber into birdhouses, the company that supplies the paint for the birdhouses, the logistics department ensuring the availability of supplies, sales, shipping, the retailer, and the customer who ultimately purchases the birdhouse (see Figure 16.1). As we noted previously, not all of these organizational components may be under direct control of the organization that heads the value chain.

e-Business management depends on the planning and control of the flow of goods and services, information, and money back and forth throughout the e-Business. It determines the speed and time-to-market, as well as the inventory an organization must carry at any given time. Therefore, e-Business management determines the overall cost-of-goods-sold as well as customer service and satisfaction.

Figure 16.1. Example e-Business

Consideration of e-Business integration is really a consideration of extending the enterprise. Just as an extended family might include aunts, uncles, second cousins, and distant relatives, the extended enterprise comprises all of the members of a company's e-Business, such as the various legal units within the company, suppliers, supplier vendors, and customer organizations.

In order to extend the enterprise, it is necessary to leverage technology, such as EAI-enabled middleware and Web-enabled application development tools. For example, common network infrastructures must be in place, such as those offered by value-added networks (VANs), proprietary wide area networks (WANs), or the Internet. The Internet has the ability to level the playing field for smaller organizations seeking to leverage the power of e-Business integration. Using the common links of the Internet and the common platform of the Web, it is very possible to become part of a set of informally connected systems. While some organizations may be fighting this evolution, the Internet has, on one level, already accomplished the task by creating its own natural e-Business.

For example, consider a typical direct-order apparel company. Consumers access the company's Web site where they are able to browse through the available merchandise. The consumer is able to get an immediate price for the order, including tax and shipping charges, as well as a ship date, estimated time of arrival, and a confirmation number to track the order as it progresses through the chain. The value for the consumer is the ability to shop without sales pressure and time constraints, as well as having an enormous amount of information about the costs, timing, and status of the order. While Web-enabled commerce has yet to take off as predicted, online storefronts are doubling sales every year and, in the process, adding value to the concept of e-Business.

Web-enabled commerce has many benefits for the company as well as the consumer. Because orders are collected directly from the consumer, point-of-sales data is immediately available to the e-Business systems. This data provides real-time feedback to various points within the organization's business processes. For example, suppliers are made aware of the demand for a particular garment, enabling them to adjust production. Sales knows the success or failure of a product line before its effect reaches the bottom line. If a company not only automates its own business processes, but is able to integrate its systems with the systems of the e-Business partners, then as a team they can build a mechanism for dealing automatically with the volatility of the most aggressive markets.

As we've noted, integration of information and business functions is the first step in effective e-Business management. Those individuals responsible for automating e-Business must analyze the information to determine the required courses of action. The best systems should automatically trigger a corresponding transaction by looking at conditions and provide the decision-makers with enough data to make effective decisions.

Communication barriers must be removed so that the flow of information can be improved among all members of e-Business. The degree of difficulty in creating links to members—and opening up this flow of information—ranges from very easy to very difficult. Most members already have information systems in place, but the types of information retained, and the standards they rely on, vary greatly. For example, many information systems are proprietary in nature and fail to provide points-of-integration. In addition to being difficult to integrate with e-Business, such proprietary technology results in higher cost and diminished value.

The Internet provides the e-Business chain with an inexpensive network for sharing information between members. The Web also provides the additional benefit of linking unknown users (e.g., customers) into the e-Business. Those responsible for integrating e-Businesses should look at this Web-enabled customer base as a mechanism to extend e-Business integration, not merely as a simple link to it.

While a number of methodologies are promoted by the Big Four consulting firms, the process of creating an automated e-Business is really more like traditional system development—with a twist. The first step is to automate and optimize all of the major business processes within each member organization. It is impossible to integrate an e-Business unless the members have their core systems in place. The second step is to extend the enterprise to incorporate all members in the e-Business. This is the most difficult and time-consuming part of the process. It is here that EAI technology and techniques add the most value. At the heart of this process is a system architecture and design effort that extends the enterprise systems to the member organizations. Thus, not only is the enterprise being automated and the process flows, object models, database models, and so on being created, but the way in which all of this integrates with other systems in other organizations (which is, in a way, analogous to the integration process outlined in regard to the levels of EAI) is being defined. The end result is a common information infrastructure that integrates all member business systems with those of customers and suppliers.

It is here, once such an infrastructure is in place, that the new family of EAI technology—message brokers and application servers—creates the best new opportunity to get the e-Business problem under control. Using message brokers, e-Business integrators can bind systems, even custom proprietary systems belonging to a trading partner, with their own enterprise systems. The solution is not significantly different than the solution to similar integration problems within the enterprise. In this case, the problem domain is simply extended to include the relevant systems owned by the trading partners (see Figure 16.2).

Figure 16.2. e-Business integration extends EAI techniques and technologies outside the enterprise.

It is important to look for opportunities to add value to the e-Business system, such as real-time decision support to increase responsiveness—for example, defining triggers to automatically perform business processes such as reordering inventory, increasing the marketing budget for a best-selling product, or informing management of other issues that need to be addressed. Other examples include an organization's leveraging systems to automatically select suppliers based on price and availability, freeing the staff from performing a complete analysis of the business drivers.

This type of sophisticated processing lends itself well to the process automation aspect of EAI, the ability to create a workflow/process automation layer on top of the existing enterprise or, in this case, inter-enterprise processes. A real-time solution brings with it the greatest degree of flexibility because changing a process or a flow is a simple matter of dragging icons around a screen.

Near-time decision support information is important as well. Almost all e-Business systems need to leverage the power of data warehousing technology to provide decision-makers with information they need to drop a product line, increase promotional activities, or normalize the number of participants in the e-Business.

In addition to the technical issues these solutions raise, it is important to focus on human issues as well. e-Business integration is not complete unless it is accompanied by a reinvestment in re-educating and reorienting employees, suppliers, and other interested parties. Too often "techies" forget about the soft aspects of e-Business integration.

Absent from this process is the ability for all the players in the e-Business to make enterprise-wide commitments to creating and managing a complex organization and business system that's better able to fit the needs of the market. Organizations that are doing this today are organizations that are going to own the market in the future.

While some organizations are using new EAI-enabled or traditional middleware to tie custom systems together with those of their e-Business members, many others are looking to Enterprise Resource Planning (ERP) packages as points of integration. ERP provides all members in the e-Business with a common application layer to exchange information through well-defined interfaces, business logic, and repositories. Unfortunately, getting all members of the e-Business to run the same ERP application is almost an impossible task.

As noted in previous chapters, ERP systems are designed to provide their owners with a system for planning, controlling, and monitoring an organization's business process. What's more, ERP systems offer easy system-to-system integration through standard mechanisms for communications. They also build a common understanding of what the data represents and a common set of rules (methods) for accessing the data.

However, traditional ERP systems are not necessarily e-Business systems. e-Business systems must deal with the complexity of integrating information from any number of disparate systems that span multiple organizations. While some properties of ERP systems are appropriate for use with the e-Business, others are not. Typically, ERP systems exist within a single organization, using a single database as the point of integration with internal organizations. There is a single database and network protocol standard; thus the enterprise system is able to work with other departmental systems without having to deal with complex integration problems.

When integrating external systems, it's almost impossible to get all member organizations to agree on a set of standards (e.g., network protocol, database architecture, process automation, and so on). Given this difficulty in arriving at a unanimous agreement, the best solution is layers and layers of middleware, gateways, and adapter technology so that information can be moved from system to system. In most cases, very little processing can be shared among the members, and the e-Business system architecture can grow exceedingly complex and confusing.

In this context then, there are two problems to solve. The first is getting all member organizations to agree on a single communications standard and a single database architecture. While it might appear that communications would be an easy problem to solve, some of the member organizations, especially the smaller manufacturing concerns, have to invest a significant amount of money to get their systems ready to link to others in the e-Business. Once everyone is ready, the second problem has to be addressed. All members need to agree on a common communications mechanism and middleware approach, allowing all member systems to seamlessly access processes and data in the extended enterprise.

As difficult as these two problems might appear, implementing the solutions is often even more difficult.

Clearly, these difficulties will not be overcome anytime soon. The value that the new EAI technology brings to this problem domain is the ability to integrate many of these systems without requiring that significant changes be made in the systems owned by the trading partners. Instead of having to change the database, application, and even the network, EAI-enabled middleware is able to adapt each system into the larger system by accounting for the differences in data and methods within a middle tier (see Figure 16.3).

Figure 16.3. EAI technology is able to link many different systems in the e-Business by not requiring that changes be made to the source or target systems.

Message brokers and application services represent the middleware best suited for e-Business systems. Because message brokers are message oriented, and so asynchronous in nature, they're able to move information from system to system without requiring that all systems be up and running at the same time.

Data is another issue. While most organizations can agree on relational databases, few can agree on a database model and architecture that can be shared across the e-Business. e-Businesses solve this problem by either forcing a common data architecture among the members or using message brokers or data translation middleware to adapt the data to various models and schemas.

Many ERP software vendors are addressing these issues along with the concept of e-Business, by opening up interfaces to their systems. For example, as we noted in Chapter 14, which was devoted to SAP, SAP provides opportunities for business-to-business integration through their Business Application Programming Interface (BAPI) standard. Meanwhile, SAP has set its sights on larger game. With release 3.1 of R/3, SAP provides access to R/3's independent business components through BAPIs that conform to an accepted open object standard such as DCOM or CORBA. In addition, release 3.1 is Internet enabled, adding more than 25 Internet application components to its standard framework.

Building on the e-Business movement, SAP offers niche subsystems such as the Supply Chain Cockpit, which consists of the e-Business Engineer and the e-Business Controller, providing decision-makers with a mechanism to gather and analyze relevant information and to manage the supply chain from a single interface. The e-Business Engineer enables both planners and decision-makers to perform graphical maintenance of extended e-Business models, such as plants and distribution centers. In addition, it provides the planner and decision-maker with the ability to review, forecast, plan, and schedule based on the actual status of an e-Business.

SAP is only a single ERP package. It solves e-Business problems only in organizations that are committed to R/3. A more objective set of standards is being developed by the National Initiative for Supply Chain Integration (NISCI), a nonprofit, private organization that receives backing from the Department of Commerce. The mission of NISCI is to assist member businesses in understanding and building the most effective methods and technologies to optimize the performance of e-Businesses comprised of more than three members. NISCI will provide thought leadership in e-Business optimization by providing a central repository of information on both problems and solutions. Thus far, organizations have been dependent on large consulting companies to provide both methodology and technology. NISCI is committed to functioning through a board of directors made up of producers, suppliers, and intermediate processors. NISCI will work to improve their member organization by following several objectives, including stimulating value creation, certifying education, and designing chain architecture supporting real-time, consensus decision-making.

Certainly e-Business integration is in its first stages in most organizations, and many organizations have chosen to move forward with "baby steps." While all have an e-Business, few have moved to optimize it through process reengineering, training, and most importantly, technology. The value of such cooperation is only now becoming apparent.

The future is easy to define but much harder to implement. We need to examine our information infrastructure to determine how we are currently doing business. Then we need to look at what it will take to modify the infrastructure to extend the enterprise to other members. Only then will it be possible to tackle the integration issues—which will be innumerable.