Business Management

Margaret Dawson (Global) - IT and Business Benefits of Cloud-Based Integration, Part I

In today’s global marketplace, organizations of all sizes are collaborating and exchanging information with a growing ecosystem of divisions, partners and customers. The amount of data spanning the Web and our networks is greater than ever and growing at a pace that makes Moore’s Law look tame.  IDC’s Digital Universe study found that the amount of data created and replicated is expected to top 1.8 zettabytes, or 1.8 billion TBs this year, up from just over 1 zettabyte in 2010. The same study also predicts the amount of electronic data being stored will more than double every two years, and could grow 50 times by the year 2020.

What does this mean?  It means we need to approach how we manage, move, secure and integrate data in new ways.  But that’s easier said than done.  Especially since most companies want to communicate electronically and in real-time.  So, companies are not only exchanging more data, but everyone is operating under the power of “now.”  Add to this the move to the cloud, and we have data in multiple environments that needs to be accessed and shared on a regular basis. Managing all this can be challenging and expensive.  

One key solution area to remember in all this is integration.  Often, integration is an afterthought for companies, until they realize how they need to more data easily across internal systems with external partners.  Traditional integration solutions, such as on-premise middleware stacks, or EDI VANs, do a great job with a focused set of data or processes, but are not keeping up with the move to the cloud or the complexity of master data management and today’s business processes.

There are a number of cloud-based integration solutions today that provide a choice between traditional on-premise integration - where the company manages the connections, mapping and business processes itself - or cloud-based platform with strong self-service or managed service support. While the cloud may not be appropriate for every company or solution, it is an ideal platform for integration, as it enables seamless interaction, interoperability, and real-time collaboration across systems and communities. 

From clear economic benefits and increased IT agility to real business impact, a cloud-based integration solution brings value across the IT and business aspects of the organization. Some of the top IT and business benefits of conducting multi-enterprise integration in the cloud include:

•    Improved partner and customer relations and retention
•    Increased revenue and margin
•    Faster time-to-market
•    Reduced costs and capital expenditures
•    Extended investments in legacy applications and systems
•    Aligning IT with business goals

Let's look at a couple of these in a bit more detail.

Improved partner and customer relations and retention
Companies must make it easy to do business with them - it's no longer realistic to tell suppliers to adhere to a single format, as companies have investments in applications and systems they need to extend. Plus customers have more choices than ever before, so if you make it hard for a customer (or partner) to exchange information with you, they will go to a competitor. We have consistently seen metrics of up to 100% customer retention when those accounts are integrated.  Integration is “sticky”, and one more way you can hold on to customers in a competitive marketplace. 

Increased revenue and margin
One of the greatest growth areas for cloud-based integration is in demand chain processes, because companies realize that keeping customers close and improving customer-facing business processes has a direct impact on the top and bottom line. More and more enterprises are demanding integration for eCommerce and procurement processes, such as procure-to-pay, order-to-cash and "punchout." By using a cloud-based integration solution, the experience to integrate these processes is seamless for customers and suppliers. One key benefit of this is increased revenue, but there is also a secondary benefit around order accuracy.

These first two benefits are just the tip of iceberg when it comes to the value that business integration can provide for companies of all sizes. But it’s clear that business-to-business integration should be a key element of consideration for any company's overall strategy. In the second part to this article, we’ll dive into the other IT and business benefits of cloud-based integration.

By Margaret Dawson, vp of product management, Hubspan


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