Managing Post-Merger IT Integration

Posted: 01/2000

Managing Post-Merger IT Integration
By Kevin Kohn

Mergers, acquisitions and rapidly changing technologies have added to the
complexity of doing business in a global economy. At an increasing rate,
corporations are merging to achieve better economies of scale, increase their
competitive position and improve customer service. However, these mergers do not
come without problems and added complexities. One such issue is the difficulty
of merging disparate IT infrastructures, many of which are proprietary and
include hundreds of legacy systems.

The legacy systems that sit at the core of corporate IT infrastructures
cannot be integrated easily with new technologies, nor can the legacy systems be
replaced easily. Adding to this situation is that, in general, investments in IT
have been tactical, not strategic, focused on solving today’s departmental
problems and not tomorrow’s enterprise solutions. Finally, the key business
processes that drive revenue and control costs are different from corporation to
corporation, even when these firms are in the same industry.

The result of these changing conditions is that companies have myriad
hardware, software and applications that are not working together. Companies
cannot continue to compete in today’s frenetic environment with disparate,
unconnected IT infrastructures. Increasingly, customers expect fast answers,
proactive account management and products and services tailored to their
specific business needs. Companies, no matter how big or small, have to rise to
the challenge of bringing together the disparate systems and mission-critical
applications that support their customers across the enterprise. The solution to
integrating IT infrastructures must be flexible and scaleable to support growth,
leverage existing IT investments and tie together the company’s unique business
processes.

To shorten the time-to-market for services, telecommunications service
providers are forced to rethink their current business practices. An OSS that
brings systems and people together to work more efficiently can be a competitive
advantage, but only if it automates the business processes at an enterprise
level.

To streamline business processes, from preordering to billing, means allowing
carriers to turn service delivery into a unified whole instead of a fragmented
operation that resists management. At bottom is a tremendous need for an
integrated, interdepartmental view of the business. Otherwise, discrete islands
of information will sink the business. Organizations must be able to leverage
existing information regardless of department, application, system type or where
the information resides.

It may be argued that synchronizing various front-end applications with
back-office legacy systems is a tall order. Legacy systems may not be faddish,
but their useful life can be extended if they are integrated with current
processes. The goal is to get a higher-level view of the business without
requiring people to adopt a whole new way of working. It also is essential that
managers not allow themselves to be influenced by the underlying technology in
their decision-making. Otherwise the manager and the business department finds
itself at the service (and mercy) of the systems.

Industry analysts perceive OSS as the glue that binds disparate applications
into a unified system. Managers who are responsible for tracking and managing
orders proactively, making changes in real time and finding bottlenecks in the
process before service levels decline certainly can benefit with a cohesive OSS.
Managers know that the successful product launch is predicated on the
organization’s ability to fulfill the order once it is placed. The effects of
new technologies on OSS solutions is evident as organizations attempt to rapidly
deal with the changes in technology, products, services, regulations and
customer preferences.

It’s no secret that all service providers face the challenge of getting new
services to market fast. Nobody is short on ideas, and turning them into viable
services is not too hard. New middleware solutions are emerging to help
providers simplify the service-provisioning process and meet their delivery
deadlines. Service activation is complex. For every new service an operator
delivers, significant alterations need to be made to its OSS.

The difficulties arise from the way the industry has developed.
Traditionally, telcos have launched their businesses with equipment from just
one network entry point (NEP): Their network management system, documentation
database and provisioning system will come from the same company. Even today, as
they move into Internet protocol (IP)-based services, the process is the same:
They initially will buy equipment from just one supplier.

However, as they grow, most service providers tend to acquire equipment from
a variety of vendors. Eventually, they arrive at the point where, to deliver a
single new service at the front end, they have to disentangle–at least
metaphorically–a complex web of incompatible networks and OSSs at the back end
to make it work.

"Business customers especially are demanding just one interface and just
one order," says Jean-Luc Spagnol, OSS solutions manager at Sun
Microsystems Inc. (www.sun.com). "They don’t want to put in one order for a
GSM (global systems for mobile) service and another for a short message service.
But for the telco, such a request will translate into multiple
service-activation requests."

The biggest carriers tackle the problem internally; the smaller ones
outsource to systems integrators. Either way, it is a costly process, and a
lengthy one, which may eventually result in a solution that no longer meets
initial expectations.

Two Approaches to Integration

As the pressure grows on telcos to provide innovative services more quickly,
a number of companies are coming up with solutions designed to eliminate some of
the complexities of service activation. There are two main approaches.

The first approach involves middleware. The idea is to install a separate
software layer–a new communications backbone–on the operations side, and then
connect all the existing back-end applications to it to enable them to
interwork. The advantage is that the carrier can protect its investment in its
existing systems. Companies now offering such solutions in the telecom arena
include InConcert (www.inconcert.com),
ObjectSwitch Corp. (www.objectswitch.com)
and TIBCO Software Inc. (www.tibco.com).

Any ideal solution should provide an effective framework for automating
business processes and integrating departmental and legacy systems to create
cohesive yet flexible OSS for service providers. The OSS should model, execute
and report on the entire provisioning process, including order management,
switching, billing and customer care, rather than simply managing individual
network elements. This integration allows work and information to flow between
departments and their systems.

Such middleware solutions also simplify the process of modifying or adding
services in the future. "Once a bus is in place, the telco no longer needs
to alter each OSS separately," explains Sun’s Spagnol. "They just
rewrite some of the rules, and the framework directs operations like the
conductor of an orchestra."

The alternative integration strategy takes an architectural approach,
rebuilding part of the infrastructure so it will interwork with the rest.
Architel Systems Corp. (www.architel.com)
is moving to offer this, based on the expansion of its own expertise from
service activation to other areas of the network. Last year, Architel acquired a
company called Accugraph, whose network inventory product complements its own,
and it is now bringing an integration solution to the market based on an amalgam
of the two technologies.

Sun has begun to work with all these companies as they develop their
next-generation solutions. On the middleware side, its partners are making
increasing use of Java and Corba to link applications to the bus and to manage
the interfaces. In its next-generation products, InConcert, for example, is
using Corba at the back end as the communications technology for the bus, and
using Java at the front end to build adapters that interface with the bus. Corba
allows for network transparency at the back end, and by using Java at the
interface, the platform is made transparent. If you write an adaptor in Java, it
will run on Hewlett-Packard, Sun, Microsoft Windows NT or any other platform;
plus, there’s the added bonus of having to write it only once.

Single vs. Merged OSS

Let’s consider a single company’s OSS. This OSS incorporates billing,
customer care, service provisioning and other departments and their systems. In
many of today’s telecommunications companies, these systems are not integrated
with each other, making it difficult for customer care agents to track order
status or answer the most basic customer questions. If these systems were
integrated using workflow technology, customer care agents could access order
status in real-time, or customers could obtain it directly over the Internet.

Companies deploy workflow solutions with the goal of optimizing their
business processes. Workflow technology consists of a process template that
describes exactly what tasks need to be executed within a process, what tools
are used to execute that task, the user profile required to execute the task and
the information that must be available.

The workflow engine controls and monitors all of the defined work processes,
links all of the information necessary for the individual task and, if
necessary, invokes other applications.

France’s Bouygues Telecom (www.bouyguestelecom.fr)
has implemented workflow for managing their customer ser-vices operations, a
system that comprises 2,000 users handling 700,000 requests per month. Workflow
methods are used to connect front- and back-office systems for data mining and
warehousing and information extraction so staff can drill down and escalate
issues to resolve problems quickly. At Bouygues Telecom, the primary motivation
was cost savings.

"We expect workflow management to reduce costs by 20 [percent] to 30
percent for our customer-orientated operations-related back-office
functions," says Francois Treuil, business process manager at Bouygues.
"This includes such operations as takeovers, fulfillment, handset
maintenance and all our retention programs."

Now let’s consider a merged OSS, one that is comprised of several previously
separate business units or companies. Another European service provider faced
this very issue. Each time a customer called with a question, a customer care
agent had to consult one of four different order management applications to
determine the status of a product that was part of the product bundle. By
integrating these separate systems using workflow, the company was able to
replace these four separate customer care screens with a single web-based order
status application accessed by customer care agents over a corporate intranet.
Technology enabled the centralized tracking of an order across multiple
distributed OSSs, eliminating the need for four separate order status
applications and ultimately providing a single view of the order.

In this application, the process used to provision each product was modeled
graphically rather than being hard-coded. Each step in these processes, such as
sending an order to a LEC through an electronic data interchange (EDI) gateway,
calls an application or is routed to an employee for completion. Metrics such as
when work was started or completed are collected automatically for each step in
the process. These metrics can be used to track order status, identify process
bottlenecks or audit service level agreements (SLAs). Unexpected business events
such as overdue tasks or errors also are tracked, enabling proactive jeopardy
escalation or automated resolution. As a result of using workflow, orders are
driven through the provisioning process, accelerating cycle times and improving
quality by eliminating lost orders and missed interdepartment
"hand-offs."

New products can be added to the product bundle by adding a new or existing
OSS sub-process to the process that provisions the product bundle. Similarly,
new work steps can be added to processes that call additional applications or
replace existing ones; automated tasks can replace previously manual ones; and
orders can be mass-customized to suit individual customer preferences. Because
these changes are made to a business process model, rather than to a hard-coded
program, they can be made by a systems analyst without undertaking a massive
software development project.

Communications companies are expanding aggressively into new territories and
service markets through mergers and acquisitions to hasten their rates of
growth. Operationally, these companies must rapidly integrate distributed and
often disparate IT infrastructures to maintain high-quality customer service
across multiple product lines, functional areas and distribution channels.
Workflow technology provides a key competitive advantage, enabling the creation
of a cohesive and adaptive IT infrastructure that supports a rapidly evolving
marketplace while providing companies with the ability to maintain best-in-class
customer service.