The enterprise application portfolio is changing as organizations move from a monolithic system to a more diversified ecosystem. But a solid integration strategy is critical to reap the benefits and avoid the risks of a multi-vendor approach. In this blog post, I’ll share the pros and cons of different integration strategies to help you succeed with this new ecosystem.
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Table of contents:
- A Changing Landscape: From Monolith to Multi-Vendor
- Benefits of Diversified Ecosystem
- The Key to Success: Integrations
- Choosing the Right Integration Strategy for Your Business
- How OutSystems Helps You Close the Gap
- Final Takeaways
A Changing Landscape: From Monolith to Diversified Ecosystem
Up until recently, a typical footprint of an organization was composed of a huge, monolithic system that dealt with the different business areas. Systems like SAP, Oracle, and Dynamics covered all the business operations' foundational aspects.
This approach of having only one platform from a single vendor worked because it simplified the life of organizations a lot. Since they only had one platform to worry about, the procurement process was easier, they could always get great discounts, and collaborators and IT only had to be trained to use one technology.
But as customer (and employee) experience becomes the make or break factor, companies have realized that a monolithic approach doesn’t give them the agility they need to change and innovate to meet their customers’ demands and stay competitive on a ever growing fierce market space, where only the ones that quickly adapt to change are going to succeed.
So, over the past few years, many organizations have been moving away from relying on one monolithic, off-the-shelf system (COTS) to pick and choose different tools that better fit each particular business need.
And the good news is that today, there are a number of tailored products that are truly the best of the breed at solving individual use cases, particularly SaaS tools that already ride the cloud wave as the first and foremost strategy.
Just to give you an idea, there are almost 10.000 martech solutions currently available for marketing alone.
And the analyst firms seem to agree with this transition. Gartner, for example, has stated that by 2025, more than 70% of large enterprises will move from a single-vendor monolithic ERP strategy to a more inclusive composable strategy.1
Benefits of Diversified Ecosystem
There are several benefits to this approach that surpass by far being locked into a single platform and vendor:
- Freedom to choose the best solution for a given use case: you’re not stuck to what the one platform can provide you; you can select a specific product that better fits your purpose.
- Reduced risk: in case of a data breach or downtime in one provider, your company will be less affected as the risk is diluted across different platforms.
- Negotiation leverage: since vendors know that they aren’t the only ones competing for a space in your company, you can get in a better position to negotiate license fees.
- Happier and more productive employees: your collaborators are the experts in their jobs. They should be able to tell you which tools they would prefer to work with, making them more productive. Also, you will cut on the learning curve by providing them with tools they are already familiar with.
- Reduced lock-in footprint: by having your core systems supported by different products and vendors, even if you are locked in into one vendor for accounting, for example, you are not in the same situation on HR as you are using a different product.
Although, there are farmost benefits to transition to a diversified ecosystem, there are also several challenges that require attention before having a diversified ecosystem that works efficiently and copes with all the required business needs. One of the top challenges is to ensure that communication flows along all different systems and platforms.
The Key to Success: Integrations
The most important thing to succeed in this diversified portfolio of core systems is to ensure that there are no silos.
Systems need to communicate with each other. You’re now dealing with multiple puzzle pieces, each holding the source of truth of a particular business area, so they must be connected so that you can make informed data-driven decision-making.
If not, you’ll end up with what John Bratincevic, Senior Analyst at Forrester Research, described as a “human API”, where users manually copy-paste data, navigate between screens, and accrue all sorts of workarounds, like spreadsheets, which will end up increasing inefficiency and errors.
So to be competitive and launch new products at the right time to market is crucial to define an integration strategy so that all the pieces and software can communicate efficiently.
In addition, when choosing the system to solve a particular business problem, you must choose wisely. A couple of considerations around integrations capabilities to have in mind:
- Inbound/Outbound APIs: make sure that all your systems include both inbound/outbound APIs to communicate with other systems.
- Security: ensure that your systems follow the security practices you need to cope with in your industry and business.
- Hosting: consider where each system is hosted and if it will require some special networking configuration to ensure connectivity between all other systems.
Now, let’s look at the pros and cons of some of the most popular integration strategies so that you can define the one that better fits your context.
Choosing the Right Integration Strategy for Your Business
There are many integration strategies that companies can choose. Here, I’ll cover the three most common ones.
Bear in mind that for some companies, as their IT strategies evolve, it might make sense to use a hybrid approach, where you use strategy A for specific systems and strategy B for others.
Also, remember that a successful integration strategy shouldn't be implemented from one day to another. Take your time to plan, let it settle, and give time for your people to adjust to it.
1. Direct Connection or Point-to-Point
Direct connection or Point-to-Point is the integration strategy used by most companies.
In this integration strategy, systems communicate directly with each other. There is no middleware that facilitates communication between them.
- No single point of failure: there’s a separation of concerns in multiple systems since there isn’t a central point of failure.
- Cost: there are no additional costs with other systems to manage the communication.
- No bottleneck for API implementation: teams are autonomous to communicate with each other to understand the endpoints, APIs, and documentation they need to integrate with other systems.
- Security: it’s hard to enforce the same security mechanism like authentication and authorization across all the different teams.
- Communication: it’s harder to standardize how teams communicate with each other because different teams can choose SOAP, others oData, for example.
- No API abstraction: if you replace one system, like the CRM, all systems consuming from that system will be affected by that change.
- Needed expertise: development teams need to be familiar with the different system APIs requirements, like protocol and authentication mechanism, to ensure connectivity between both systems.
2. ESB or API Gateway
Then you have an Enterprise Service Bus or API Gateway. I encompass them together because the outcomes are similar. Here, a central broker centralizes all integrations, and all systems need to go through that middle layer to get data or service from any other system.
- Security: everyone needs to communicate with that middle layer, so that you can enforce the security there.
- Abstraction underneath APIs: you can build an abstraction layer, so you can easily change an underlying system without impacting the other systems consuming from it.
- Communication: development teams only have to communicate with one IT team responsible for maintaining and publishing web services on this ESB or API Gateway.
- Scalability: there’s a single point of failure—that middle point where every request goes through—which can lead to scalability bottlenecks.
- Costs: you have an additional fee to maintain yet another system.
- Middleware IT team can be the bottleneck: because there’s only one IT team managing the middle layer, every request for a new web service needs to go through that team which can impact team agility (productivity and lead time).
Another strategy that has been growing in usage is iPaaS - Integration Platform as a Service. These platforms orchestrate requests from different systems.
So, it's similar to the ESB and API gateway management in that every request must go through that middle layer. The difference is that the data and services are also orchestrated on this layer.
- Managed by a third party: this way, it’s easy to start consuming data from external systems, and you don’t have to worry about infrastructure management because that is delegated to the iPaaS provider.
- Easy to implement event-driven patterns: because it’s based on trigger events, actions are only processed when the trigger happens.
- Orchestration: it’s easy to orchestrate data flow between systems.
- Cost: there’s an additional cost to maintain yet another system.
- Scalability: there’s a single point of failure, leading to possible scalability bottlenecks.
- Compliance: iPaaS live on the cloud, which can lead to data compliance issues for certain industries.
- Data latency: every request flows to the cloud, so you may encounter latency issues.
How OutSystems Helps You Close the Gap
OutSystems is a high-performance low-code platform that organizations can use to rapidly build, deploy and manage their own business-critical applications. You can either extend your existing systems and modernize front-ends or build engaging B2C, B2B, or B2E applications that connect to multiple systems.
From an integration perspective, OutSystems can easily cope with any of these strategies and help you play well with them.
- Integration Builder: if you’re using a direct, point-to-point connection, you can easily find the most common enterprise systems available in the Integration Builder—a tool that removes the complexity of building integrations, dramatically changing the integration process from a development task to a configuration step. Integration Builder provides connectors to the most common enterprise systems and databases like SAP, Salesforce, Dynamics, Sharepoint, SQL Server, Oracle, PostgreSQL and much more.
- Forge connectors: if you can’t find the provider you’re looking for in the Integration Builder, you can use the 500+ available connectors that are published on the Forge (OutSystems marketplace) that is supported by our thriving developer community.
- REST/SOAP/oData service consumption: if you have a custom or an ESB service, you can easily leverage it using REST, SOAP, or even oData service consumption with OutSystems.
- Expose REST/SOAP: you can also expose OutSystems services to be consumed by other services using REST and SOAP.
If you still have most of your organization relying on a single core platform, my advice to you is to not be scared to jump into multi-platform and vendors. Use this opportunity to learn about new platforms, new architectures, to be critical and understand if your organization is already shifting.
Just keep in mind the challenges of managing a diverse portfolio of systems of records and evaluate if your IT team is prepared to manage different systems. And if it is, make sure there are no silos and adapt your integration strategy to better cope with your business context while ensuring open communication channels between your systems.
If you want to learn more about OutSystems high-performance low-code platform and its integration capabilities, check out:
- OutSystems integrations platform page
- How to Build Secure and Scalable Integrations webinar
- Evaluation Guide
Or schedule a demo.
1Predicts 2021: Time to Compose an ERP Strategy to Outpace Disruption - Gartner.