A FRAMEWORK FOR ASSESSMENT OF ENTERPRISE

INTEGRATION APPROACHES AND TECHNOLOGIES

Ronald E. Giachetti, Alba N. Nunez, Bertha M. Arteta

Department of Industrial and Systems Engineering, Florida International University,10555 W. Flagler St. EC 3105, Miami,

Florida, US

Duane P. Truex, III

Department of Decision Sciences and information Systems, Florida International University, Miami, Florida, US

Keywords: Enterprise Integration, ERP, Enterprise Systems, Computer Integrated Manufacturing

Abstract: Enterprise integration is the study of an organization, its business processes, and

resources, understanding

how they are related to each other and determining the enterprise structure so as to efficiently and

effectively execute the enterprise goals. There are many separate research streams that have developed

theories, approaches, and technologies for integrating the enterprise. There seems to be little sharing of

concepts across disciplines or consensus on the topic of enterprise integration. Moreover, what is meant by

the term ‘integration’ is poorly defined. In this article an enterprise integration framework is presented to

bring together the divergent views of enterprise integration so that how they are related to each other can be

understood. The enterprise integration framework defines five levels of the enterprise system to define the

integration types encountered at each level. The five levels are organization, process, application, data, and

network. The enterprise integration framework is used to analyse the many approaches used by different

disciplines toward enterprise integration. The analysis identifies gaps for further research.

1 INTRODUCTION

Integration across the enterprise is one of the most

significant issues facing today’s organizations. Over

the years, both business and government entities

have developed many management and technology

systems that address the needs of local

organizational units. Example local systems include

accounting systems, inventory control systems, and

human resource systems among many others.

Historically, these systems were designed, built, and

optimized to solve the local needs. There is little

regard for how the local system would fit into the

entire enterprise. These local systems utilize various

data representation formats, have different data

semantics, are built using different programming

languages, and are launched on various hardware

platforms. The problem of how to integrate these

heterogeneous systems has instigated a significant

amount of research work.

There are many separate research streams that

atte

mpt to address enterprise integration. There are

approaches developed within the database research

[1], information systems development [2], software

engineering [4], agent-based systems [5], production

engineering [6], organizational theory and design

[7], and the general business communities [8]. There

seems to be little sharing of concepts across

disciplines or consensus on the topic of enterprise

integration. In some work the enterprise denotes

information systems that can be integrated via

technical approaches. Others view the enterprise

from an organizational approach and propose

various coordination mechanisms and management

tools for integration. Moreover, what is meant by the

term ‘integration’ is poorly defined. The lack of an

agreed upon definition of integration is unfortunate

because the volume of research in enterprise

integration as well as the amount of money budgeted

to achieve enterprise integration indicates it is a

significant challenge that companies view as

important. It appears that the literature in each of

325

E. Giachetti R., N. Nunez A., M. Arteta B. and P. Truex D. (2004).

A FRAMEWORK FOR ASSESSMENT OF ENTERPRISE INTEGRATION APPROACHES AND TECHNOLOGIES.

In Proceedings of the Sixth International Conference on Enterprise Information Systems, pages 325-331

DOI: 10.5220/0002653803250331

 SciTePress

these fields has not benefited from cross fertilization

in the ongoing discourse on integration. This

suggests a redundant and inefficient use of

intellectual resources and that opportunities for

synergy may have been overlooked.

In this paper an enterprise integration framework

is developed to coalesce the large but disparate body

of research on enterprise integration. The goal of the

framework is to extract the relationships between the

various integration approaches and show how they

complement each other. In this way the issues

embodying enterprise integration and strategies for

researching enterprise integration can be better

understood. Using the framework we analyze to

what extent the various integration approaches meet

the goals of enterprise integration. Finally, from the

framework we identify further areas for research.

1.1 Enterprise Integration Motivation

A primary motivation for research in enterprise

integration is the serious economic ramifications that

result from failure to adequately address integration.

The NIST Strategic Planning and Economic

Assessment Office studied interoperability in the US

automotive supply chain and estimated a yearly one

billion dollars in cost due to poor interoperability

[10]. In a study conducted by Frohlich and

Westbrook [11] they found a strong correlation

between supply chain integration and performance.

These studies and others suggest higher levels of

supply chain integration lead to higher levels of

performance.

One of the largest software markets is enterprise

resource planning (ERP) systems. ERP systems have

been one of the leading software markets for the past

several years and have attracted much attention in

industry as well academia. The goal of ERP is to

integrate the enterprise by installing a single

monolithic system; i.e. the ERP system. ERP is a

single vendor solution and thus interoperability

problems are in theory avoided. In practice, while

ERP replaces the many independent information

systems companies operated; these same companies

have found they still must maintain other

applications, which must be integrated with the ERP

system. The complexity of ERP systems due to sheer

size and scope of automation means that many

companies fail to realize the promised benefits of

integration [12].

In the software engineering domain, integration

is also becoming increasingly important to newer

paradigms of component-based software

development. Software design today promotes the

utilization of reusable components that are

assembled together to build applications.

Component-based software approaches such as

DCOM, .Net, and Enterprise Java Beans all are

based on the construction of distributed applications

through the coding and assembly of components

[13]. Assembly of these components is an

integration problem, which is repeatedly in search of

some measure of stability and standardization.

Researchers are attempting to extend this paradigm

to higher levels of granularity of subsystems.

2 ENTERPRISE INTEGRATION

FRAMEWORK

An enterprise integration framework would enable

organizations to determine the best integration

strategy to adopt, how to allocate resources to the

integration project, how to manage the integration,

how to implement the integration, and how to

continuously maintain and update the integration

strategy.

2.1 Enterprise Integration Definitions

Enterprise integration is the study of an

organization, its business processes and resources,

so that relationships may be understood and

determining the enterprise structure so as to

efficiently and effectively execute the enterprise

goals. Enterprise integration falls within enterprise

engineering, which has recently emerged as a new

discipline that embodies the knowledge, principles,

and practices having to do with the analysis, design,

implementation, and operation of an enterprise [4].

An examination of definitions for enterprise

integration reveals there is little consensus of what

integration entails. Batini, Lenzerini, and Navathe

[1] focus on the limited but important aspect of data

schema integration, which they define as, “the

activity of integrating the schemas of existing or

proposed databases into a global, unified schema”.

Vernadat (1996) argues that enterprise integration

should emphasize “business integration, i.e.,

understanding the way business processes and

enterprise policies are structured and coordinated in

the enterprise, how they relate to one another and

how they can be efficiently executed using the

enterprise means depending on the availability of

internal or external enterprise objects or conditions.

In the organizational science literature integration is

defined as overcoming the functional differentiation

that occurs when companies decompose themselves

into smaller more specialized organizational units

that are easier to manage [17]. Perhaps it is Kosanke

et al. [16] that have best realized that the term

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326

ENTERPRISE 1

NETWORK

DATA

APPLICATION

PROCESS

Connectivity

Data Sharing

Interoperability

Coordination

Inter-

Enterprise

Integration

Type

ORGANIZATION

Intra-Enterprise Integration

ENTERPRISE 2

NETWORK

DATA

APPLICATION

PROCESS

ORGANIZATION

Intra-Enterprise Integration

Alignment

Figure 1: Enterprise Integration Framework

enterprise integration has evolved to encompass

several earlier terms such as systems integration of

computer networks, application integration of

business applications, and business integration of

process networks. We have identified four distinct

concerns leading to a related set of four research

issues to be explored in this research.

Approaches to integrate the enterprise are as

varied as the definitions for enterprise integration.

There are:

(1) Data integration approaches – Data

integration approaches attempt to integrate the data

that all the enterprise’s systems access [1].

Enterprise database development marks the

beginning of enterprise integration approaches. One

approach is a global shared data model that all

systems access.

(2) Middleware approaches – Middleware is

software that resides between the applications and

the underlying operating systems, networks, protocol

stacks, and hardware [8]. Middleware lets

applications interoperate in a distributed

environment. There are many middleware

technologies. Ruh et al. [18] identify five types of

middleware in the market today; procedure calls,

database access middleware, message oriented

middleware, distributed object technology, and

transaction processing monitors.

(3) Process integration or ERP – Enterprise

Resource Planning (ERP) systems are large and

complex software applications that automate

business processes. These systems grew out of

persistent approaches to integrate related

applications for manufacturing or other business

processes. The goal of ERP is to integrate the

information flows throughout the value chain within

a company thus driving greater efficiency and

improved services [17, 26].

(4) Organizational approaches – Organizational

theory prescribes mechanisms for coordination of

work as a means of integration. Galbraith [17]

discusses how the organization uses rules and

procedures as coordination mechanisms. Today,

researchers describe coordination as a theory in itself

and define coordination as the “management of the

dependencies that arise between business tasks”

[19]. These relationships and the way they can be

refined, redesigned or obliterated are the focus of

both incremental and radical approaches to

managing organizational processes [20] .

(5) Cross-functional teams are a key approach of

achieving unity of effort among the sub-units of an

organization and thereby achieving integration

especially in manufacturing firms for product

development [22]. There are detractors of the

prevailing approach of cross-functional teams.

Sutherland [16] argues that cross-functional teams

solve communication problems but whether it leads

to integration is left to chance.

(6) Ontological approaches – Ontologies are the

name given to context-specific terms and their

relationships to formalize the semantics of a

communication [22].

(7) Standardization – Standardization has been a

general strategy in many of the aforementioned

integrative approaches. Akkermans and Van der

Hoorst [23] present a typology of standardization

mechanisms of coercive standardization (Euro

conversion), collaborative standardization either

hierarchically ordered (telephony) or voluntary

(HTML), consortium-lead (Unix, CORBA), and

competitive (MS Windows or Macintosh).

Standardization can be argued favourably according

to transaction cost theory, which states that

standardization lowers communication costs and

allows for economies of scale. Standardization is

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327

most appropriate for the slow-changing

infrastructure elements such as the network and

application levels. It is not appropriate for fast-

changing applications. It is a goal of inter-

organizational integration as well.

2.2 Framework

We start with a working definition of enterprise

integration as: Enterprise integration is the linking

together of systems, processes, and organizational

units so that the separate parts can act together as a

single whole. To this end enterprise integration

involves the connection of systems, sharing of data,

interoperation of applications, and coordination of

business processes. A conceptual framework is

presented to decompose the enterprise to reveal and

define the integration types so they can be better

understood. Figure 1 shows five levels of an

enterprise system and the integration types at each

level. The five levels are network, data, application,

process, and organization levels. Each level contains

objects that are more abstract than those below.

Level one, the lowest enterprise level, is the network

level. At this level the integration issue is the

physical heterogeneity of the hardware, machines,

devices, and their operating systems found in a

physical network. The integration goal at the

network level is connectivity defined as the linkages

between systems, applications, and modules. Level

two, the data level, provides the facts the enterprise

system utilizes to complete its business functions.

The integration goal is data-sharing where two or

more sub-systems or organizational units exchange

data with each other. Data-sharing must address the

data schema diversity problems described by [1],

which can be subdivided into: (i)different

perspectives due to the local definitions of concepts

for the same or similar concepts; (ii)equivalence

among constructs that can be used to represent the

same data; and (iii)inter-schema properties that arise

when the objects in one schema are related to objects

in a second schema. Level three, the application

level, describes the systems used by the business.

The integration goal is interoperability, which is the

ability of one software application to access/use data

generated by another software system. Level four,

the process level, describes the sequence of tasks

conducted in order to produce an output. The

problem of task dependencies occurs at this level.

The integration type called coordination addresses

the problem. Coordination has been defined as the

“management of the dependencies that arise between

business tasks” [19]. Level five, the level of

organizational design, addresses alignment, the way

that the three key elements of business strategy,

organizational design strategy and information

systems strategy must all be aligned with one

another. A change in any of these elements requires

an adjustment in the others. Thus alignment is the

integration task at this level of analysis.

The enterprise integration framework illustrated

in Figure 1 unites the many different perspectives of

enterprise integration identified in the literature

review. For example, middleware approaches focus

on interoperability at the application level, database

approaches on the data level, and cross-functional

teams at the process level. Enterprise integration

within a single company implies alignment within

and between the different levels into a cohesive

enterprise system. Inter-enterprise integration can

occur at any level.

2.3 Definition of Enterprise

Integration Characteristics

The enterprise integration framework defines

individual integration types. When all these

integration types are present then enterprise

integration is realized. In addition to definition of the

integration types it is necessary to define the

characteristics of enterprise integration for further

distinction between different integration approaches.

In this section, drawing upon the literature, a set of

integration characteristics is defined.

Reconfigurable – The integrative approach

should be reconfigurable so that the integrated

system can accommodate changes in organizational

structure [15].

Scalable – The integrative approach should be

scalable, where scalability is defined as the ability of

a system to maintain performance as the size of the

system grows or the demand for service from the

system increases [24].

Lead-time – The lead-time to establish an

integrative connection is important for how

adaptable the integrative approach is.

Transparent – The use of the integrative

approach should largely be transparent to the users.

Many systems are distributed, integrative

technologies are often used to hide the distribution

[3].

Synchronous/Asynchronous – Whether the

communication of information in the system is

synchronous or asynchronous. Synchronous

communication requires the sender of a request to

wait until a reply is received before continuing to

process. It needs to wait for the message to be

received to continue processing. Asynchronous

communication allows the sender to continue

processing after the message is sent. Synchronous

communication implies a higher degree of

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coordination between sender and receiver and thus a

high level of coupling [18]. Asynchronous requires

less coordination since the sender can continue

processing without a response. Within the two

categories there are several protocols for realizing

that type of communication.

Semantics/Syntax – It is important for the

integrative approach to not only let systems share

data through definition of acceptable formats (i.e.

syntax) but the systems must also be able to

understand the shared data (i.e. semantics) [25].

Direction – Integration can be primarily vertical

oriented or horizontal oriented [34, 57]. Vertical

integration is between levels of a hierarchy and

horizontal integration is between peers in the

hierarchy.

Degree of centralization/decentralization –

Whether the integrative approach is based on a

centralization of control or a decentralized structure.

The approach should match the organizational

structure [26].

Autonomy – Whether the integrative approach

allows autonomous selection of systems by the

various organizational units or if they must adhere to

a limited technology selection. Oftentimes, there is a

conflict between maintaining autonomy versus the

requirements of integration [3].

Coupling Level – The coupling of the system

components, subsystems, or modules through

integration should be low. Coupling is defined as

the impact changing one component will have on

other components. In highly coupled systems

changing one component will affect other

components. Such high coupling is generally

undesirable because it is more difficult to adapt to

changing organizational needs and leads to high

maintenance costs [9].

3 ASSESSMENT OF

INTEGRATION APPROACHES

In this section we discuss the many integration

approaches. The enterprise integration framework is

used to classify the approaches.

Connectivity at the network level, while not

completely eliminated as a problem, has largely

been solved. Today, organizations have access to a

reliable and extensive network infrastructure. The

network infrastructure can transmit voice, data, and

multi-media through wired and wireless

connections. Integration of the communications

through the network is accomplished through

protocols that define the message format. As a

consequence, for most enterprises, connecting their

systems is not a problem.

Data-sharing has received a tremendous amount

of attention and continues to be an integration issue

for many organizations. One approach is to define a

global, unified data schema for the entire

organization. Developing a single data model within

an organization is often difficult and very costly; to

obtain the consensus for a global data model

between organizations is even more difficult. A

problem in today’s business environment is the

boundaries and nature of the enterprise is constantly

changing so the data model would have to also

change. However, the global data model is not easily

changed.

Middleware and Enterprise Application

Integration (EAI) software are the primary

approaches to achieving interoperability between

applications. There are many different middleware

products with different characteristics so a full

exposition should treat each one separately. Here we

draw a few main observations. Middleware is

intended primarily for decentralized architectures

and only addresses the syntax of the communication

not the semantics. Strengths of middleware are they

tend to be highly scalable, transparent, and

reconfigurable. The lead-time to establish a

connection between two subsystems is dependent on

the middleware used and on the subsystem. Most

middleware uses interface definition language (IDL)

for each application. For popular applications the

IDL is readily available. But for other systems such

as legacy systems, the IDL must be developed.

Overall, middleware and EAI have been found very

useful for enabling interoperation between

distributed and heterogeneous systems [26].

Enterprises use both technology and

organizational techniques to coordinate their

business processes. Early work described various

coordination mechanisms organizations could use to

coordinate work. The mechanisms included using

rules and procedures, mutual adjustment by

employees, direct supervision, and standardization

of work activities. The need to deliver enterprise

integration has instigated a resurgence in research on

coordination [6]. These authors have developed

enhanced modeling tools and taxonomies for

discovering and representing dependencies in

enterprise systems and then for specifying

coordination mechanisms. The organizational

approaches have been used in small, medium-sized,

and large organizations so they are scalable. They

also support reconfigurability of business processes

and systems. The lead-time for installing and/or

changing the coordination mechanisms is a subject

of change management. The coordination

mechanisms are used in both decentralized and

centralized organizations.

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4 ISSUES

The framework highlights several outstanding issues

that require further research.

4.1 Complexity

As enterprise systems become more integrated they

also tend to become more complex. Complexity

arises from not only the size of the system but also

from the interrelationships of the system

components and the emergent behavior that cannot

be predicted from the individual system components

[27]. The reason integration increases complexity is

that as a system becomes more integrated the

behavior of one component is more likely to

influence the behavior of other components. The

result is behavior that is often unpredictable. For

example, in a supply-chain the integration of the

companies leads to the bull-whip effect in which a

small disturbance in demand is greatly exaggerated

at the other end of the supply chain [28]. Some may

view the increased complexity as a negative

outcome. However, there is a reason for building

complex systems. Complexity is the trade-off for

greater performance. The issue is to determine the

integration strategy that results in the desired level

of performance without generating an excessively

complex structure. We postulate that many

organizations have excess complexity that does not

contribute to improved performance.

4.2 Measurement

The design, analysis, improvement, and

management of a system require the definition of

desired system properties and measures to quantify

those properties. More formally, measurement is the

assignment of numbers to attributes of an artifact

according to some procedure so that certain

properties and relationships are preserved [29]. The

definition of measures has been performed in the

business community, manufacturing system

community, and software engineering community.

There is very little work in measurement of

enterprise integration. Measurement is often a

precursor to science of a subject, so the lack of a

measure impedes research work in enterprise

integration.

In manufacturing, measurement has been used to

quantify the properties of the manufacturing system.

This is especially true of flexibility measures, of

which there is an extensive record in the literature

[30]. Less fully developed are manufacturing

measures for other system properties such as agility,

complexity, scalability, and reconfigurability. There

is a need to develop measures of each of the

integration types. Using these measures would

enable companies to better design and better manage

integrated systems

5 CONCLUSIONS

In this paper we define enterprise integration as

encompassing five separate integration types of

alignment, coordination, interoperability, data-

sharing, and connectivity. Only with all five of these

types present can an enterprise claim to be

integrated. Using these definitions, many integration

approaches were reviewed. Only ERP systems come

close to attaining enterprise integration. The

complexity of ERP is often the inhibiting factor in

achieving all it promises.

It is our contention that there is no single integration

technology or approach that is best in all business

scenarios. Moreover, enterprise integration is an

ongoing activity as reflected in the quote, “In

contrast to machines, in which integrating of the

parts into a cohesive whole is a one-time

proposition, for social organizations the problem of

integration is a constant struggle and a continuous

process” [31]. To establish enterprise integration as

an ongoing effort two issues of addressing the

complexity inherent in integrated systems and

measurement of integration need to be further

researched.

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