As Published In August 2004

Field Guide to Technology
By the Profit editorial staff

Get a business-eye view of the technologies that can make your business run more efficiently; provide you with better intelligence about your customers, partners, and employees; and, in the end, save you money.

Data Hub
Grid Computing
Information Architecture
Integration
Lean
Linux
On-Demand Computing
RFID
Web Services

Consistent, timely data across disparate systems has been the dream of IT, but a new application architecture model, the data hub, is making that dream a reality. Data hubs identify and clean duplicate data from heterogeneous systems, and then reconcile that data across all source systems continuously, so that users and systems rely on a single master record. Data hubs also maintain cross-references to all source systems so that business intelligence is managed and shared centrally. Data hubs can be implemented incrementally, so that existing IT investments are protected. One example of data hub technology, Oracle Customer Data Hub, gives users a 360-degree enterprisewide view of their business, revealing complete transactional and analytical data across disparate systems.

What's the technology impact? Data hubs will allow companies that cannot migrate to a single application architecture— a complete suite of applications, for instance—to retain legacy applications and customer solutions and still benefit from a single data model.

Oracle Customer Data Hub

The Oracle Customer Data Hub identifies and reconciles duplicate data, cleans it, and sends it back to the source systems in near real time.

Executive Speaks

When the big guys talk, what are they really saying?

"...start with a single data model...."

Single-instance data storage refers to an IT system's ability to maintain one consistent copy of content that multiple users can share. Starting or migrating to a single data model is one way to ensure that all of your information is available to all users—and that it's a true, accurate source of business intelligence.

Network Appliance
Using the Data Hub

When Scott Klimke—CIO of Network Appliance (NetApp), a nearly US$1 billion supplier of storage solutions—says that his company's IT philosophy is to keep it simple, that's not because NetApp hasn't tried other options.

"Eventually, the amount of reconciliation and work required with a best-of-breed approach made it very difficult to scale," says Klimke. "That's why we've focused on optimizing our infrastructure over the past couple of years and transitioning our environment from a best-of-breed infrastructure to really focusing on a handful of enterprise-class applications, of which Oracle is the centerpiece. In spring 2003, we went live with Oracle E-Business Suite, and we've been aggressively expanding that footprint."

Site Reading Recommended Reading: Oracle Customer Data Hub Giga Research on the Oracle Customer Data Hub

Klimke says the Customer Data Hub has been a tremendous help in linking together "siloed" systems. "The Customer Data Hub is key to ensuring that we have the same definition and a consistent view of a customer across all our transaction systems," says Klimke.

Source: "Core to Your Business," by David A. Kelly: Oracle Magazine, May/June 2004

Information architecture refers to an actionable plan or blueprint that defines a set of technologies, IT best practices, and information standards that serve to simplify and unify a company's information assets. Information architectures are typically designed to make the purchase, planning, deployment, and performance of information technology more systematic, predictable, and more in line with a company's overall strategic goals.

The Oracle Information Architecture organizes these guiding principles into key technology areas, and can provide a strong basis for the development of your own enterprise information architecture:

• Data hub information consolidation—An information cleansing service that establishes standard definitions of critical information such as "customer," "order," and "employee" throughout the enterprise
• Real-time business processing—Coordinated business process flows that provide maximum automation and the flexibility to respond immediately to changes
• Information access—A consistent interface for all business applications, collaboration tools, and information assets
• Grid infrastructure—A flexible, utility-like delivery of computing power and storage
• Development framework—A set of tools and techniques that encourages consistent application design, development, and deployment
• Enterprise management—Centralized monitoring, diagnostics, and control of your entire IT environment

Enterprise architecture (EA) success will be determined by the extent to which corporate and line-of-business managers comprehend, support, and enforce the architecture. By 2007, 15 percent of EA core teams will move out from under the IT organization's management structure, with direct reporting relationships to either corporate strategy or corporate change management functions.

Source: META Group, December 2003

Executive Speaks

When the big guys talk, what are they really saying?

"...the biggest problem we faced was the problem of information fragmentation..."

Business application implementations are often based on silos of departmental, vertically oriented systems created to meet individual project requirements. And as a result, information can be fragmented—isolated, duplicative, and contradictory—rather than integrated. Bringing this fragmented information together, so that a complete and clear view of customers, partners, employees—everyone your company interacts with—can be obtained is the straightest path to better business efficiency.

Also known as: enterprise architecture, enterprise information architecture, or Web architecture

First used: Although the concepts behind information architecture have been in existence since the '60s, the ideas behind the modern definition stem from the mid-1990s, when organizations first began using internet technology to connect the various parts of enterprise computing—database, applications, IT performance management tools, browser-based user interfaces, and so on.

Site Reading Recommended Reading: Oracle Information Architecture white paper Oracle E-Business Suite architecture

What's next: Data hubs are a new concept related to information architecture. Data hubs help you create a central repository that keeps key information about your business continuously synchronized. Although data may be stored in many application-specific databases, the data hub provides a single point of access for all this information.

What's the technology impact? The philosophy that drives your IT implementations can have a big impact on corporate governance, your organization's ability to grow, and how much time and money you'll need to ensure the accuracy and timeliness of your electronic information. Many companies such as Dell, Wal-Mart, and Procter & Gamble have achieved significant competitive advantages and profitable growth through better business process management and fully utilizing their information technology.

Source: java.ittoolbox.com/research/ survey.asp?survey=integration_survey&p=1 Date of Survey: October 27 through 30, 2003

• Gartner believes that application integration will continue to define the agenda of IT innovation and drive the evolution of application infrastructure and middleware products.

Source: Gartner, Inc., "Predicts 2004: Application Integration and Middleware," December 19, 2003

Master lock
Making Integration Happen

"Integration is critical for companies, regardless of industry," says Brian Wood, research director of corporate performance management at Gartner Inc., in Stamford, Connecticut. "It's especially valuable for B2C [business-to-consumer] companies such as telecom and financial services, which have large amounts of data and huge numbers of customers. B2B [business-to-business] companies also benefit from integration but tend to focus more on collaborative applications."

"Whether our customers want customized products, packaging, or merchandising, we have the flexibility to meet those requirements," says Rick Kolaczewski, chief financial officer at Master Lock, in Oak Creek, Wisconsin. Recognizing that sustained growth required the consistent delivery of better products and services, Master Lock decided to reorganize its business around customers, by improving customer service, offering more product innovation, and controlling costs more effectively. The company chose Oracle E-Business Suite as a key element of its strategy and for its integration, flexibility, scalability, availability, and process-driven approach.

Source: "Let's Get Real," by Louise Fickel: Profit, May 2004

Also known as: data integration, business integration, enterprise application integration, business-to-business integration, application-to-application integration, business process management

Site Reading Recommended Reading: The Insider's Guide to Business Integration Business Integration Journal Oracle's Business Integration Solution

What's next: As companies continue to grow, organically or through acquisition, integration has become a critical challenge. Early entrants into the integration market attempted to solve this problem with proprietary technologies—solving some problems but creating others. However, the latest generation of open standards-based integration solutions reduces complexity and overhead costs by working with existing and future applications and those of your business partners. In fact, many companies are looking to consolidate their IT infrastructures even further—looking for integration technologies from vendors that provide application, data, portal, and other technologies. Companies and their trading partners are also turning to Web services standards to build collaborative business processes and share them across the internet, which speeds the process of doing business and eliminates many manual tasks.

What's the technology impact? Integration offers huge benefits, from automating complex business processes and reducing or eliminating delays to increasing worker productivity and customer satisfaction and increasing return on IT investments. By integrating separate data stores, you gain a consistent, complete picture of your customers, products, and overall business. Failure to integrate could cost your company—through productivity losses; slower response to change; and disconnects between your company and its partners, customers, and employees.

A methodology that seeks to minimize resource use by eliminating wastes that inflate costs, lead times, and inventory requirements. The goal of Lean manufacturing is to produce the right product at the right time in the right quantity for the customer, and to produce exactly what you need and nothing more.

Also known as: Lean manufacturing, Lean initiatives, Lean Six Sigma, kaizen, manufacturing excellence, continuous improvement, just-in-time manufacturing

First used: This concept was developed by Toyota in the 1950s.

Site Reading Recommended Reading: Lean Enterprise Institute Shingo Prize for Excellence in Manufacturing

What's next: Lean has traditionally been a production-oriented methodology. More and more, those with foresight are seeing the benefit of taking Lean into the entire enterprise. As a whole-business approach, Lean can achieve results across the entire back office and in industries outside industrial manufacturing. Organizations that have benefited internally often share Lean principles with their partners and extend Lean practices across their supply chains.

What's the technology impact? Becoming Lean begins by breaking down and then re-establishing system flows, so information technology offerings that can both enforce and automate these newly established standards are a requirement. Lean also requires a system that can adjust capacity to meet changes in demand, can provide a flexible infrastructure for updating flows as processes come online, and can be updated to meet the Lean demands of continuous improvement.

Just In Time

Lean enterprises sustain demand-driven environments by reducing the steps necessary to satisfy customer need.

Facts:

• Lean is a Japanese invention, inspired by a plant tour of Ford Motors in the 1950s. After watching an American assembly plant build cars in a more efficient way than they used at home, two Japanese executives developed the Toyota Production System (TPS).
• Six Sigma is often paired with Lean principles in manufacturing efforts to ensure flawless product quality and repeatable execution. It originated in the U.S. in 1986, when Bill Smith, a senior engineer and scientist at Motorola, devised a standardized way to count defects. The name is inspired by the Greek letter sigma, used to denote standard deviations in statistics.
• Six Sigma programs use detailed data analysis to improve all business processes, with the aim of achieving a defect rate no higher than 3.4 per million.

Enlight
Making Lean Happen

"We are a manufacturer; we make IT products," Liao Chih-ming, president of Taipei-based Enlight, says definitively. "Our customers are all over the world, and they demand speedy, on-time delivery and flexible production schedules. So, it's imperative that we react quickly to changes in the marketplace by adjusting our global logistics and shop floor system."

Enlight's implementation, which includes Oracle Financials, Oracle Supply Chain Management, and Oracle Manufacturing, has helped tighten communications between the various ends of the organization and created efficiencies throughout the operation. "Now, we can get reports anytime we need them," Liao explains. "We don't have to wait until the end of the month to review our situation. We can do it every week. In accounts receivable, for example, we can see things immediately now."

Source: "Light Manufacturing, Heavy-Duty Technology," by Dave Clarke Mora: Profit, November 2003