Reengineering Systems Integration Success (1997)

472 Pages·57.703 MB·English

by  Michael A. Mische

REENGINEERING
SYSTEMS INTEGRATION SUCCESS
Michael A. Mische, Editor
First published 1996 by Auerbach Publications
Taylor & Francis Group
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Boca Raton, FL 33487-2742
Reissued 2018 by CRC Press
© 1996 by RIA Group, Inc.
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Chapter 2-3, "The Business of Hub-and-Spoke Systems," by Johan Vinckier. All rights owned by
McKinsey & Co.
Chapter 3-1, "Defining Business Process Reengineering," by Michael A. Mische and Warren
Bennis. All rights owned by Jossey-Bass.
Chapter 4-5, "Lessons Learned: Ethics and Failure in SI," by Dr. Effy Oz. All rights owned by
the ACM.
Chapter 6-3, "Integrating the C/S Environment," by R. Jack Munyan and Gordon Couturier.
All rights owned by the Decision Sciences Institute.
Chapter 6-5, "Grasping the Promise of Client/Server Computing," by Damon Beyer, Marvin
Newell, and Ian Hurst. All rights owned by McKinsey & Co.
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Contributors
Warren Bennis
Distinguished Professor of Business Administration, University of Southern
California, and the Founding Chairman of the Leadership Institute,
Los Angeles CA
Damon M. Beyer
Engagement Manager, McKinsey & Company, Inc., Houston TX
James Bradley
Chief Information Officer, United Healthcare Corp., Minneapolis MN
Gordon Couturier
Associate Professor, Computer Information Systems Department, The University
of Tampa, FL
Jagdish R. Dalai
Vice-President of Information Management, Xerox Corp., Rochester NY
Peter G. Davison
President and Founder of APEX Information Management Consultants, Inc.,
Rochester NY
Rui J. Figueiredo
Director, the Corporate Information Management and Technology Group, Bausch
& Lomb Inc., Rochester NY
Leora Fracht
Vice-President, the Capital Markets Technology Group, Smith Barney,
New York NY
Steve Harkola
Director of Applications Development, MOOG Inc., New York NY
Ian Hurst
Senior Engagement Manager, McKinsey & Co., Inc., New York NY
Roger Kahn
Private Consultant and former Senior Manager and Partner with KPMG Peat
Marwick and Arthur Young, Miami FL
Michael A. Mische
President, Synergy Consulting Group, Inc., Boalsburg PA
iii
Contributors
R. Jack Munyan
Chair and Professor of Computer Information Systems, the College of Business,
The University of Tampa, FL
Marvin J. Newell
Principal, McKinsey & Co., Inc., Dallas TX
EffyOz
Coordinator of the MIS Program, School of Business Administration, Wayne State
University, Detroit MI
Eugene J. Romeo
Director of Information Management and Technology, Personal Products Division
of Bausch & Lomb, Inc., Rochester NY
John A. Sanders
Senior Vice-President, Management Information Services for Spelling
Entertainment Group Inc., Los Angeles CA
Sundar Subramaniam
President, Cambridge Technology Enterprises, Cambridge MA
Mark T. Turnbull
Director of Information Services, Murphy Family Farms, NC, and Past Manager,
Enterprise Systems Development, Hershey Chocolate North America, Hershey PA
Johan Vinckier
Manager, McKinsey & Co., Inc., Brussels
Michael Wybo
Assistant Professor of Information Systems, McGill University, Canada
iv
Contents
INTRODUCTION vii
SECTION 1
Introduction to Reengineering the Systems Integration Process
1 The Systems Integration Marketplace ................................................ 3
2 Defining the Reengineering Process.................................................... 11
SECTION 2
Systems Integration in the Global Enterprise
1 The Role of Systems Integration in the Global Enterprise:
A CIO’s Perspective............................................................................... 27
2 Systems Integration Solutions for the Global Enterprise................... 39
3 The Business Promise of Hub-and-Spoke Systems............................. 63
SECTION 3
Business Process Reengineering
1 Defining Business Process Reengineering .......................................... 75
2 The Role of Information Technology in the Reengineered
Enterprise .............................................................................................. 87
3 Systems Integration and the Information Technology
Architecture .......................................................................................... 99
4 The Evolving Role of the IT Organization: A CIO’s
Perspective ............................................................................................ 121
5 A CIO’s View of Systems Integration and Reengineering ................. 133
SECTION 4
Maximizing Returns, Managing Risks, and Avoiding Pitfalls
1 Symptoms of the Terminally 111 Systems Integration Project ........... 145
2 Systems Integration and Corporate Strategy: A Tale of Success,
A Tale of Failure ................................................................................... 175
3 Case Studies of Terminally 111 Integration Projects............................. 187
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Contents
4 The Benefits, Advantages, and Maximization of Systems Integration
Success .................................................................................................. 199
5 Ethics and Failure in Systems Integration: A Case Study................. 213
6 Critical Success Factors in Systems Integration................................. 229
7 An Approach to Estimating Client/Server Development
Projects .................................................................................................. 239
SECTION 5
The Reengineering Approach to Systems Integration
1 The Systems Integration Life Cycle: A Reengineering
Approach................................................................................................ 249
2 Managing The Systems Integration Project: A Reengineering
Approach to Project Management........................................................ 267
3 Considerations and Costs of the Client/Server Integration Strategy 301
4 The Implications of Systems Integration on the IS
Organization .......................................................................................... 315
SECTION 6
Integrating Technology, Data, and Applications
1 Improving User Productivity Through Systems Integration ............. 329
2 Integrating Technology, Data, and Applications in the Open Systems
Environment.......................................................................................... 339
3 Integrating the Client/Server Environment: A Case Study ............... 355
4 Integrating the Open Systems Environment: Reflections of a Project
Manager.................................................................................................. 367
5 Grasping the Promise of Client/Server Computing............................. 393
SECTION 7
The Role of the Systems Integrator
1 Who Are the Systems Integrators? ...................................................... 407
2 Choosing a Systems Integrator ............................................................ 415
3 Contracting for Systems Integration.................................................... 429
About the Editor.......................................................................................... 443
Index ............................................................................................................ 445
vi
Introduction
In the words of Bill Gates, “Software is the scarce element in the equation.
And its value is only in its uniqueness. If two people have the same soft­
ware, it’s worthless.”
The stakes of the systems integration process are high. Integration has
come to mean much more than the melding of different technologies and
application systems. Today, the definition has evolved to include the integra­
tion of business processes, organizational structures, and the human element
of the organization. The system is the sum of all the parts that make organi­
zations work. It is simply no longer feasible to consider integration the sole
focus of technology. Organizations are reengineering themselves and are
finding that systemic changes at the operational, organizational, and cultural
levels are necessary for optimizing their investments and efforts. They are
using technology as both a catalyst and enabler of the process.
As systems integration projects take on mega-dollar proportions—
approaching budgets of $20 million, $50 million, and even more than $100
million—and span years of effort, there is little room for error or incompe­
tent management. The complexities of the systems integration process, when
combined with rapidly changing technology, dynamically evolving business
practices, and the need for reengineering the enterprise, make the risks and
returns enormously challenging to manage. Since the advent of mega-integra­
tion projects, organizations have amassed thousands of person-years of sys­
tems development and business integration experience.
Unfortunately, it is all too common to read media accounts or hear stories
about systems integration and reengineering projects that have, in fact, gone
awry. In fact, the results are starting to come in. ComputerWorld reported in
1994 that 85% of executives are dissatisfied with the results of their reen­
gineering efforts, and many pointed to IT as a problem. Empirical evidence is
suggesting that many reengineering efforts end in failure, at least in terms of
satisfying their original objectives or sustaining any momentum. All too often,
systems integration and business transformation efforts are reported that are
past due, over budget, underperforming, understaffed, and poorly managed,
or they involved too many (or not enough) consultants and contractors, or
the vendor exaggerated the capabilities of the product. In the contemporary
world of real-time business, mobile work forces, ever-demanding customers,
and global business alliances, however, successfully melding the systems in­
vii
Introduction
tegration and reengineering processes are not just technical challenges that
are restricted to the confines of the MIS group or technical personnel; they
demand an enterprisewide perspective and cross-functional commitment.
They are activities that are essential to achieving long-term competitive ad­
vantage, viability, and sustained value creation.
There are, in fact, many phenomenally successful integration and reen­
gineering efforts, such as those of Chrysler Corp., First Boston, United
Health Corp., John Hancock, Taco Bell, and Saturn, which serve as examples
of well-executed projects.
As documented in many studies, however, technology alone does not nec­
essarily provide significant strategic or competitive advantage to the organi­
zation, regardless of whether the organization has invested in leading-edge,
state-of-the-art, mainstream systems or is one or more generations behind
current computing platforms and system software. Conversely, how an orga­
nization chooses to deploy and use its technology assets, resources, and data
to enable business processes does create competitive advantage. This con­
vergence of purpose creates extraordinary results.
Therein lies the essence of systems integration and reengineering for com­
petitive advantage. Successful systems integration and reengineering require
the forging of strong business partnerships between technology providers,
service suppliers, functional management, and users, as well as the creation
of new business processes. To improve competitive position and shareholder
value, systems integration must go beyond the historically defined parame­
ters of retrofitting applications and replacing aging computing platforms and
system software; systems integration must progress further into the realm of
organizational design, employee empowerment, process enabling solutions,
and process reengineering. In essence, they must architect the business for
integration. Today, a major delay or problem in the system integration pro­
cess can be potentially devastating, not only financially, but also to the cred­
ibility and public image of the organization. An inadequately designed and
poorly performed business integration effort can not only cost millions of
dollars but can be potentially devastating to the organization in its implica­
tions. Distribution channels can be disrupted, vendor relationships affected,
sales opportunities missed, employee overtime increased, and customers lost.
More significantly, in an era of higher expectations and performance stan­
dards, most organizations can ill afford the public humiliation, shareholder
repurcussions, and Wall Street analyst wrath that invariably result from a
poorly executed systems integration project. For example, a spectacular inte­
gration debacle occurred recently in Florida. In an effort managed by the
State of Florida and outside contractors, this Chernobyl of systems integra­
tion projects saw the taxpayers’ costs escalate needlessly from an initial esti­
mate of $20 million to over $120 million—all in the name of improved service
delivery.
viii
Introduction
The aspect that causes the most concern in today’s systems integration
and development work is that problems, delays, budget overruns, miscalcula­
tions, misrepresentations, and significant operational disruptions continue. It
is not uncommon to read in the news media or professional literature of
million-dollar projects quickly escalating to the tens of millions. Likewise, it is
not unusual to learn of a $10 million project ballooning to a $30 million or
$50 million fiasco. One century-old Fortune 500 company has at least two
such debacles. The first involved the integration of new operating and manu­
facturing systems for one division, which saw a clearly underbudgeted and
undermanaged MRP project grow more than 300% and its 18-month effort
expand to some three years to complete. The company’s second fiasco in­
volved an international subsidiary that experienced a five-fold increase in
costs from an initial estimate—all spent on traditional mainframe computers
and proprietary applications for a company of about $100 million in annual
sales and all without changing the basic business processes of the enterprise.
The list is long: another Fortune 500 company was sold on client/server
integration for its worldwide operations. This company is watching its initial
$10 million client/server integration effort escalate past $40 million, with esti­
mates to complete approaching $70 million.
Why, after so many years of systems development and integration experi­
ence, do organizations continue to experience solution-delivery problems?
The answers are neither obvious nor convenient, as they lay deep within the
practices of information technology, organizational cultures, consulting doc­
trines, management practices, and project management processes. It is not
the technology that is at fault. Rather, many of the problems are related to
the organization’s processes, culture, and management practices. Still others
are the direct result of the quality and caliber of the people involved. Some
are victims of monolithic technology, management practices, and slick mar­
keting campaigns. Many projects simply succumb to poor project manage­
ment, internal politics, low discipline, and misguided expectations.
When I first set out to create this book, I was amazed to discover how
much had been said about systems and business integration and how little
was formalized. The subject is well documented but under-represented in the
context of meaningful work and hands-on reference material. Surprisingly,
some of the best-known names in the integration business shied away from
contributing to this book. I attributed this to several factors, including the
lack of any formal standards surrounding systems and business integration
and a need, especially among vendors, to avoid any formal definition for the
subject. In a sense, systems integration and reengineering have come to
mean just about anything, and there is tremendous marketing value in the
loose application of the term.
This book is about systems and business integration and the effective man­
agement of the integration process. It has been designed as a practical blue­
ix