Management of the digital business applications infrastructure concerns delivering the right applications to all users of digital business services. The issue involved is one that has long been a concern of IS managers, namely to deliver access to integrated applications and data that are available across the whole company. Traditionally businesses have developed applications silos or islands of information, as depicted in Figure 3.5(a). These silos may develop at three different levels: (1) there may be different technology architectures used in different functional areas, (2) there will also be different applications and separate databases in different areas, and (3) processes or activities followed in the different functional areas may also be different.
Applications silos are often a result of decentralisation or poorly controlled investment in information systems, with different departmental managers selecting different systems from different vendors. This is inefficient in that it will often cost more to purchase appli- cations from separate vendors, and also it will be more costly to support and upgrade.
Such a fragmented approach stifles decision- making and leads to isolation between func- tional units. For example, if customers phone a B2B company for the status of a bespoke item they have ordered, the person in customer support may have access to their personal details but not the status of their job, which is stored on a separate information system in the manufacturing unit. Problems can also occur at tactical and strategic levels. For example, if a company is trying to analyse the financial contribution of customers, perhaps to calculate lifetime values, some information about customers’ purchases may be stored in a marketing information system, while the payments data will be stored in a separate system within the finance department. It may prove difficult or impossible to reconcile these different data sets.
To avoid the problems of a fragmented applications infrastructure, companies attempted throughout the 1990s to achieve the more integrated position shown in Figure 3.5(b). Many companies turned to enterprise resource planning (ERP) vendors such as SAP, Baan, PeopleSoft and Oracle.
The approach of integrating different applications through ERP is entirely consistent with the principle of digital business, since digital business applications must facilitate the inte- gration of the whole supply chain and value chain. It is noteworthy that many of the ERP vendors such as SAP have repositioned themselves as suppliers of digital business solutions!
The difficulty for those managing digital business infrastructure is that there is not, and probably never can be, a single solution of components from a single supplier. For example, to gain competitive edge, companies may need to turn to solutions from innovators who, for example, support new channels such as WAP, or provide knowledge management solutions or sales management solutions. If these are not available from their favoured current sup- plier, do they wait until these components become available or do they attempt to integrate
Digital business applications infrastructure Applications that provide access to services and information inside and beyond an organisation.
Enterprise resource planning (ERP) applications Software providing integrated functions for major business functions such as production, distribution, sales, finance and human resources management.
Figure 3.5 (a) Fragmented applications infrastructure, (b) integrated applications infrastructure
Source: Adapted from Hasselbring (2000).
Business process architecture
Application / data architecture
Technology architecture
Business process architecture
Application / data architecture
Technology architecture
Business process architecture
Application / data architecture
Technology architecture
Procurement and logistics Finance Marketing
Functional barrier
(a)
Functional barrier
Business process architecture
Application / data architecture
Technology architecture
Procurement and logistics Finance Functional integration
Marketing (b)
new software into the application? Thus managers are faced with a precarious balancing act between standardisation or core product and integrating innovative systems where appli-
cable. Figure 3.6 illustrates this dilemma. It shows how different types of applications tend to have strengths in different areas.
ERP systems were originally focussed on achieving integration at the operational level of an organisation. Solutions for other applications such as business intelligence in the form of data warehousing and data min- ing tended to focus on tactical decision- making based on accessing the operational data from within ERP systems. Knowledge management soft- ware (Chapter 10) also tends to cut across different levels of management.
Figure 3.7 shows only some types of applications, but it shows the trial of strength between the monolithic ERP applications and more specialist applications looking to provide the same functionality.
Best-of-breed vs single- source systems
Selecting ‘best‑of‑breed’ applications from multiple system vendors for different digital business applications such as enterprise resource planning, customer relationship management, transactional e‑commerce and supply chain management is a better approach for an effective digital business infrastructure than using a single‑ vendor solution.
Debate 3.1
Figure 3.6 Differing use of applications at levels of management within companies Enterprise resource planning applications Key
Knowledge management software
Strategic management
Data warehousing Data mining Tactical
management
Operational management
Figure 3.7 Elements of digital business infrastructure that require management Web
server
Corporate database server
Integration of digital business and legacy systems
Management of internal network (intranet) Management of external network (extra / Internet)
Control applications to monitor service levels
Quality of staff access to Internet and intranet services
Management issues
Applications server
Legacy applications
and data
Quality of server-side applications, e.g. services, performance, availability, interface Applications
development Data
management
Platforms for applications
development, content management and database management Applications integration
with partners and intermediaries
External applications hosting?
Integration with partner systems Quality of extra / Internet connections through ISP
Client applications Service quality of client-side applications
Figure 3.7 summarises some of these management issues and is based on the layered architecture introduced at the start of this section.
‘Web services’ or ‘Software as a Service (SaaS)’ refers to a highly significant model for man- aging software and data within the digital business age. The web services model involves managing and performing all types of business processes and activities through accessing web- based services rather than running a traditional executable application on the processor of your local computer.