Monday, July 11, 2011

SaaS integration - making the ERP mistakes on a bigger scale

One of the most frustrating things in IT is the totally amazing ability of people not to learn from past experiences. The following are all the sorts of things I've recently heard at conferences, vendor presentations, business presentations and in company architecture practices.
"We don't need an MDM solution as Salesforce is going to be our only customer repository"
"Integration is simple, its all just REST or Web Services, we don't need to worry about that"
"We are moving to SaaS because it doesn't require integration and dealing with IT"
"The business are on their own if they do SaaS, we just deal with the internal IT"
And a whole litany of others over the last few years. The general theme is that business folks are commissioning SaaS solutions and in collusion with the technically naive are setting up entire new estates beyond the firewall. Meanwhile the internal IT groups are often washing their hands of this deliberately and fighting against the change.

Lets start with the first statement, as its the one I've heard several times.

I don't need MDM, my SaaS CRM is my master

This probably wins it in my book for the least ability to learn from IT and business history.  This is exactly what folks did in the first CRM rush in the 90s and have spent the last 15+ years trying to recover from.  Fragmentation of customer information is a fact, even more so in these days of social media, so starting a strategy with the idea that an externally provided solution in which you have little or no say and which is set up to be good as a SaaS solution not as an enterprise source for customer matching, merging and dissemination is like doing a CRM project in the 90s by lobbing money at consultants and saying "build whatever you like lads".... really not a good idea.

If you are going to look externally for SaaS, and there are good business reasons to do so, then the first question should be how to create the unified information landscape that modern businesses require.  That is an MDM problem, which only gets bigger as you include suppliers, products, materials and all of the other core entities that exist.

Integration is simple, its just REST/Web Services
While the CRM one is a joint IT/biz error then its this one where IT really excels itself in ignoring the past.  Integration is a hard problem in IT, its made much harder if you don't have MDM style solutions, when looking at SaaS the fact that you have published interfaces helps slightly but you still have the challenges of integrating between multiple different solutions, mapping the information, mapping the structure and of course updating all this when it changes.  That however is of course just the technical plumbing.  Then you have to look at your business processes that span across SaaS solutions and the enterprise as well as where to add new services into that environment.

The spaghetti mass of ERP and enterprise in the 90s which EAI aimed, and mainly failed, to solve will be nothing compared to this coming morass of externally competing companies who have a real commercial reason to keep you locked to their platforms and approaches and have the actual ability to make things tough as they can change their platforms as they want without asking for permission.

We are moving to SaaS so we don't have to deal with IT
This is a common refrain that I hear, but its very short sighted, what it really means is that the current IT department is broken and not meeting the demands of the business and not even properly explaining to the business what is going on.  This really is just storing up problems for the future, or just delegating the problem externally to another group who will end up being your IT department in future, but probably harder to shift and change that your current group.

If the business do SaaS that is their problem, we just do internal IT
I like to think of this as the IT redundancy programme, its a wilful attempt to ignore the real world and it really is only going to end badly.

The point here is that moving to SaaS is actually a bigger challenge for integration and information management than the old ERP challenge, but most companies are entering it with the same wild-eyed wonder that companies entered the ERP/CRM decade of the 90s.  Leaping in and just assuming that historical problems of integration will disappear.  The reality is that companies need to be more structured and controlled when it comes to SaaS and the IT departments must be more proactive in setting up the information and integration infrastructure to enable this switch.

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Rajesh Raheja said...

Great post. Exposes the reality of enterprise integration and the naivety of statements that I hear as well i.e. "How hard can integration be, it's just web services!"

Rajesh Raheja said...

Steve, Are you ok if I use a screenshot of your post in a presentation?