Extended enterprises take root

We’ve arrived at the next phase in e-business development, complete with its own architectural design.

The model grows up Complexity at the core Elegant and intermingled The name game The Entended Enterprise Model

Now that the majority of corporate America is neck deep in e-business, network executives are beginning to move their companies into the next phase. They are building infrastructures that are tightly integrated with systems from those once labeled as “outsiders.”

These organizations are no longer paying lip service to a unified structure while building Webified technology silos (separate Web, e-commerce, intranet and extranet sites). Rather, they are creating an environment where digital streams converge from all of a business’s constituents: local employees, remote workers, road warriors, customers, the sales channel, suppliers and other partners. Business services based on a person’s role – customer, employee, supplier – are the emphasis, rather than IT services developed to fit a person’s physical location.

The model grows up

Extended enterprises – which go by many names – let constituents work in real time across heterogeneous environments, and across public and private networks, to get needed information to the right person or application. While architectural details vary from company to company, a generic conceptual model of the extended enterprise has begun to emerge. This model shows a big architectural shift (and more complex design) from the hub-and-spoke model of the mainframe or the three tiers of client/server (on which early e-business systems, too, were modeled).

Imagine a dartboard. As our interactive diagram illustrates, core IT resources, such as hardware, mission-critical software and data, go in the bull’s-eye, while e-business-related applications for customers, partners and roving employees reside in the next ring. A security perimeter meant to restrict access protects each ring. Public data or consumer applications, if a company has any, go in a third ring. A security perimeter also protects this ring, although it is less rigid than the perimeters for the inner rings because its goal is to protect content, not to restrict access. Applications residing in the e-business or public layers might call on data and network connections in the core, should they have the security authority to do so. Users rely on the gamut of network connections to access their areas of the extended enterprise.

Complexity at the core

Simple enough . . . or is it? Defining what falls in the core can get complicated fast because, in the extended enterprise, those IT resources don’t all belong to you. Ownership slops over neatly defined perimeters into customer, supplier, business partner and, in some cases, employee domains (in the latter case, through PDAs, cell phones and DSL connections).

When zooming in on those core IT resources, we see five elements, owned and shared among the four user groups. First we find business-critical applications, such as those used for the general ledger or for manufacturing control. These are often Webified. An order-entry application residing in the middle or outer ring might ask for data from, or feed data into, the core general ledger application. But customers do not get direct access to the core application, which is heavily protected from anyone outside the company – and even from many employees.

Middleware glues the applications together and acts as the go-between for the user interface and data, or the network management tasks. Servers and storage come next, contributing processing power and data management. This depends on network hardware to transport the information, and all of it rests on methods for connecting to the extended enterprise.

These symbiotic IT relationships create a service-oriented business ecosystem. Here’s how the order-entry process might work within such an environment:

A customer (or automated system via Web services) places a product order through a Web-based application. The application verifies the product is in stock, calculates total cost by adding in shipping fees it has retrieved from the appropriate business partner and issues an electronic invoice. Then, because fulfilling the order drops internal stock below a predetermined threshold, the application sends suppliers a bid request for raw materials. But that’s not all. The application checks with a CRM system to determine whether the customer needs a purchase order number. If so, it requests one, which triggers creation of a purchase order on the customer’s end. Confirmation numbers are exchanged and payment is collected and sent to the general ledger application.

Customers, onsite customer service representatives and traveling salespeople would use this same order-entry business service. Other people, too, would tap in: the accounts receivable people at the company looking to validate data, suppliers and third-party partners (such as shippers) looking to issue their own invoices, and accounts payable people at the customer, looking to reconcile accounts.

Elegant and intermingled

Intermingled ownership no doubt causes problems. For instance, how can data be coded so everyone’s systems can understand it easily? How can a person’s identity and role be determined when location is no longer a factor? How can reliability be increased and finger-pointing minimized when a system failure occurs?

Still, gazing past such short-term, technical issues, we can see that the extended enterprise is an elegant design. Sharing a single ecosystem is certainly more efficient than telling every company to fend for itself. Through widespread initiatives such as myriad Web services development efforts and the Liberty Alliance’s identity management specifications, the network industry is trying to address the technical burdens of sharing data, software and hardware.

Network executives who get involved in, or at least follow, these efforts will be ahead of the competition as extended enterprises proliferate and grow more sophisticated. (They will also get their say on how their data should be shared.)

In a survey of 150 Network World readers conducted in December 2002, we found that most organizations have begun the design and development phase of their extended enterprises, which they see as growing in business importance. Some 98% of respondents said the extended enterprise has some level of importance to the successful operation of business, with 84% calling that level either “important,” or “very important.”

And the extended enterprise concept is shaping purchasing decisions on new enterprise applications. More than 90% of respondents said they want new applications to have solid security features as a result of the extended enterprise. More than three-quarters also want support for Web standards and a clear strategy for how the vendor plans to implement Web services. The ability to integrate with external partner applications is considered by 61%, and 45% want their new enterprise applications to be outfitted for mobility and wireless access.

Readying the infrastructure for an extended enterprise model also means embedding intelligence into the network in every feasible way. Improved automation methods within storage, server, routing and network management products will let systems heal themselves. This will improve resiliency when so much rides on a single, interwoven system. Such intelligence also promises to ease problem diagnosis – a sticky issue when multiple parties own systems.

But most importantly, network executives must take responsibility for visionary leadership. Your work now touches everyone who comes in contact with your company. The changes in your IT systems affect how your company does business and vice versa.