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December 10, 2003

Better Consequence

Averting the risk of corporate governance indictments leads to better management of other risks.

by Jeanette Burriesci

"I hope," said magnate Steve Forbes at a recent address to information professionals, "that courts and lawmakers don't confuse true wrongdoing in corporate leadership with simply risks that don't work out. Risk is the foundation of capitalism."

But, fair or not, enterprise executives can add to their lists of "risks of doing business" the chance that a flawed IT environment can land them in prison. The "limited" in limited liability laws now takes on an ominously ironic shade of meaning.

When your personal freedom is on the line, how good is "good enough" in information systems? Many IT visionaries are, in as tasteful and subdued a way as they can, cheering the effects of Sarbanes-Oxley (a.k.a. SOX) on top-level spending priorities.

For as much as accuracy and speed in delivery of data, information, and intelligence can protect the CEO and CFO from the ire of investors and government defenders of investor confidence, they also can make the business run better. CIOs who've been evangelizing all this time about the benefits of tighter and broader integration, business process management, and real-time intelligence have new converts who control the purse strings.

With the pressure to comply comes another risk: throwing money, in a panic, in the wrong direction. There are solutions, and then there are "solutions." The latter would be, for example, a reporting tool that takes dirty data from unaudited business applications and throws it into a format that the SEC or other authority demands. The former would be based on an enterprise architecture that ensures clean data that's able to be integrated in real time, in the context of business processes.

Such a foundation can support monitoring of business events as they happen — yielding information that businesspeople can trust and act on in an appropriate timeframe. So, not only can the business report quickly to shareholders events that may materially affect the business, per the vague SOX order, but it has a chance to save the business from ill effects of such material events. Better yet, such an intelligent business can seize opportunities that increase the top line. Dante Systems, which Webmethods recently acquired (see News & Analysis), has a customer that does this. With ultra thin profit margins in the office supplies commodity market, Corporate Express uses historical transaction intelligence as context to monitor current transactions. It then instantaneously adjusts prices to respond optimally to changing conditions.

Still, Corporate Express's system is fairly compartmentalized, based on data from only a few applications. As David S. Linthicum writes in his forthcoming book, Next Generation Application Integration (Addison-Wesley, 2004), "The simple reality is that most application integration projects exist just at the entry level. We have yet to see the real-time coupling of thousands of applications." Linthicum uses knowledge from his nearly two decades of experience, including his positions as CTO of Mercator Software and, before that, SAGA Software, to shine the light of clarity on the currently turbulent application integration scene. In this issue, we give you his high-level overview of the convergence between application integration and BI. (See "Smart Synergy")

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But it doesn't end there: We're also debuting a column from Linthicum this coming year on the topic of enterprise application integration. Look for it to appear several times in 2004. You can also visit our community site at IntelligentEAI.com.