Need to Cut Costs? Here’s the One Place CIOs Forget to Look

Loraine Lawson

It’s a hard sell, getting CIOs and other IT leaders to think about integration as a discipline rather than a step in an application project. That’s why you can almost guarantee you’ll find waste there.

John Schmidt is an expert at finding that waste. He now works for Informatica as vice president of Global Integration Services, but before that, he worked as an integration consultant.

In fact, one of my favorite integration stories is about Schmidt’s work at Best Buy. When he started in 2000, the average integration interface cost was around $30,000. Three years later, Schmidt and his integration team brought 80 percent of the integrations down to a mere $1,000 a pop.

In a recent Perspectives blog post, he argues that the largest IT system most companies have today is their integration systems — the systems involved in consolidating, reporting, distributing and aggregating of data.  Even though it’s probably the largest application system, very few organizations even recognize it as such, he adds.

“Collectively, I call these capabilities the Enterprise Integration System (EIS) and it is arguably the biggest application system in most large organizations,” he writes. “The reason you don’t see the EIS is because, in many organizations, there is no clear ownership and accountability for it.”

That’s why Schmidt argues you should start with integration if you want to create more efficient IT systems.

How do you do that? Well, Schmidt is an advocate of lean integration — he’s even co-authored a book on it with David Lyle. Lean integration takes what he did at Best Buy, and expands it into a more developed, formalized approach to cutting waste in integration.

How much waste can you cut? Well, Schmidt’s been doing this for more than 25 years, and as I mentioned earlier, he consulted with large enterprises for a chunk of that time. Based on that, his estimate is that as much as 25-50 percent of integration systems are waste.

The rest of the post is devoted to explaining how you can estimate the size and costs of running your organization’s enterprise integration system.

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