SECONDHAND SYSTEMS ACQUISITION REPLACING THE MAKE OR BUY DICHOTOMY

Declining stock market valuations have created an incentive for financially healthy companies to acquire new systems by acquiring the companies that own them. According to Ken Orr, a Cutter Consortium Fellow and member of its Business Technology Council, the challenge of integrating these secondhand systems will be substantial and will force companies to reexamine and rethink their enterprise system architecture (ESA).

"As a result, large organizations will need to develop and maintain a robust enterprise system architecture, or they will fall significantly behind existing competitors and new market entrants in their ability to react to major business and technology changes.

"What organizations need is something like a wiring diagram for their IT applications and major databases -- or an ESA." Orr describes an ESA, in its simplest form, as a network diagram that shows all, or most, of the major systems within an enterprise and the major interfaces between these systems.

"However simple these diagrams are at base, by the time an ESA is completed, it shows the major systems of interest, along with their connections to the rest of the systems with which the organization deals. With such a model, managing overall IT planning is much more straightforward."

Ken Orr recently authored a Cutter Consortium Council Opinion on ESA. In it he describes several scenarios that point to the need for an ESA and makes recommendations. Orr predicts that the movement to the real-time enterprise is one of the next big things on the IT horizon: "Like 'fly-by-wire,' real-time enterprises cannot hope to keep up with their competition without the speed, accuracy, and connectivity that IT systems provide. In order to keep these IT systems working 24x7, organizations need to have a big picture that they can understand and manipulate. That's where the ESA comes in."

ESA is a natural response to make IT infrastructure and systems more reliable and easier to change. Architectural drawings are a natural way for people to understand and maintain these networks. Unfortunately, as important as ESAs are, they are not inexpensive to create and maintain. "The good news is," says Orr, "that there are more and better tools all the time that can capture the existing inventory of pieces and their interconnections."

Tom DeMarco, Christine Davis, and Tim Lister, also Cutter Consortium Fellows, concur with Ken Orr's opinion:

• Says Tom DeMarco, "The prescription Ken offers seems so simple that I worry people may dismiss it as too obvious ... acquisition is going to continue to be a major factor for the next two to five years, and so the time to get ESA homework done is now."
  
  
• Christine Davis states, "ESA can be a strategic tool for the CIO; it can provide him or her with the necessary knowledge to invest in key IT resources in order to best position the company's IT capability to support the business today and in the future."
  
  
• According to Tim Lister, "If we are going to survive the next few years, I propose that you consider ESA as the key to scrubbing off the out-of-date, redundant, and low-value systems that might otherwise clog your organization."
  
  

-- Cutter Consortium