Composite Applications - Frequently Asked Questions

As organizations struggle to unify disparate business processes and applications, the lack of integrated processes around enterprise applications is one of the key corporate constraints on revenue growth, increased productivity, and business performance visibility. The new software segment called composite applications solves this problem.

How did we arrive at composite applications?
The scale and scope of digitization has been rather remarkable. First came task automation (enabled by focused applications like basic bookkeeping). Then came departmental workflow automation (enabled by applications like payroll processing). Then we had transaction automation (enabled by applications like e-commerce). Next came business process automation (enabled by e-business applications like CRM and SCM). Today we are entering a new phase of composite process automation (enabled by a new genre of applications such as SAP's xApps and Siebel's UAN).

Why composite applications?
Composite processes integrate sales, marketing, and supply chains - allowing firms to quickly share and act on changes on demand. But composite processes cannot occur without standards-based, modular, scalable, and flexible integration.

The cost of integration is rapidly becoming a significant barrier to the deployment of new business applications for large corporations. Linking disparate business processes and applications is a top spending priority for CIOs. Across industries, businesses are finding that they need to automate and extend core business processes beyond the enterprise in order to offer new services and streamline customer- and partner-facing applications and processes.

What are the different types of composite applications?
Composite applications fall in three broad categories: 1) cross-application, 2) cross-channel, and 3) cross-enterprise.
Cross-application composite processes enable organizations to deploy end-to-end business processes spanning multiple applications as well as front-office, back-office, and custom applications. Order-to-cash is an example of a cross-application process. The CRM application (lead generation and salesforce automation) initiates the order. The ERP application enters the order. The SCM application manages the order. Lastly, the financial applications handle the invoicing and payment.

Cross-channel composite processes enable organizations to integrate and synchronize business processes spanning multiple channels or touch points (brick, call center, kiosk, Web, mobile, field sales, field service). For example, in the airline industry, look-to-travel is an example of a cross-channel process. The interested traveler looks up fares on the Web, makes reservations via the Web or call center, checks in through the airport kiosk, and boards the plane with the assistance of an agent. Multiple points of contact each requiring different information make up this end-to-end business process.

Cross-enterprise composite processes enable organizations to deploy end-to-end business processes spanning different business partners or multiple business units in the case of large multinational corporations. The goal is to enable organizations to more quickly and easily create, connect, and coordinate business processes between partners without being limited by the constraints of existing applications or platforms. Examples of cross-enterprise processes include demand management or Collaborative Planning, Forecasting and Replenishment (CPFR) in the retail industry.

Cross-Application, Cross-Channel, Cross-Enterprise Process Transformation Dimensions

Who are the leading providers of composite applications?
A big part of building composite applications is application integration. Application integration has traditionally required custom-built business processes, which are very expensive to develop and maintain.
SAP, Siebel Systems, and PeopleSoft are trying to reduce costly and time-consuming customizations of their respective enterprise applications by providing out-of-the-box support for composite business processes.

The composite applications offerings are being marketed under the following labels:

• SAP's xApps,
• Siebel's UAN (Universal Application Network), and
• PeopleSoft (AppConnect).

These vendors aim to provide prepackaged business processes that eventually can be executed across multiple applications, channels, departments, organizations, and enterprises. All of these composite applications are based on XML and Web Services industry standards.
Which industry groups are the most advanced in composite application implementation?

Several industry groups are racing to develop application integration standards so members can rapidly and cost-effectively realize the benefits of application integration. The most advanced industry groups are:

• UCCnet (the retail industry),
• CIDX (the chemical industry), and
• EIDX (Electronics Industry).

Why are industry groups focused on integration? The cost of integration is rapidly becoming a significant barrier to the deployment of new business applications. ebs estimated that in large corporations, approximately 40% of the cost of new applications is spent linking disparate business processes and applications rather than delivering new business functions.