The Secret to Cutting Application Integration Costs

What if you could save, say, $29,000 on each integration point your organization deployed? In only 3-4 integration points, you’d save one, full-time equivalency IT job, right?

If you’ve never evaluated application integration costs before, there’s a good chance you’re overspending on it. I’ve seen a lot of figures over the year about how much integration costs add to a project’s budget. It’s always significant and it’s almost always more than it should be.

If you don’t believe me — or any of the research, consultants and experts out there who say otherwise — then try this: Measure the cost of building your integration points for a few months. That’s what John Schmidt, Informatica vice president of global integration services of practice integration, did when he worked at Best Buy years ago.

At a cost of $30,000 per integration point, he found the retailer spent approximately $9 million on 300 integration points, he told TechTarget recently. In three years, he had reduced that per-integration point cost to a mere $1,000, and reduced the development time in less than a day.

Schmidt shared that story with me about two years ago, and it frequently makes the trade press for good reason: It’s the best integration savings example I’ve ever heard. And I’ve heard a lot of them.

So what’s Schmidt’s secret? He set up an integration competency center, or Integration Center of Excellence, as TechTarget calls it.

The group was devoted to cutting the costs of application integration, in particular, so one of its major tactics was to build a library of 1,000 interfaces cataloged in the system. These became the basic building blocks used by all developers to develop apps, Schmidt said.

While he doesn’t specify that these interfaces were built using services, I’m guessing they did, since the article is actually about how a service-oriented architecture Center of Excellence can help with application integration costs. That may sound like a very narrow topic, but in this age of internal and external cloud, it’s actually a smart move for any company engaged in regular development.

It’s also why, once again, SOA is starting to make the trade press. Service-oriented architecture may be out of the hype cycle, but it’s still a smart approach to development — particularly in the cloud, which almost exclusively uses services to deploy applications — hence the whole SaaS thing — and even share data.

It’s also a great way to finally break free of those costly integration hairballs.

So check out the article, which explores how to set up a Center of Excellence, including the core personnel you’ll need. If you’d like to read more, there are lots of resources here on IT Business Edge, including my 2011 interview with John Schmidt.