For every dollar spent on licensed software, deployment costs between $2 and $5 for hired guns just to get it in and working. This makes the deployment model for some companies at the big end of town completely unsustainable, said InterSystems managing director Denis Tebbutt.
Tebbutt said the complexity, significant investment and shortage of resources available for integration projects has led most users to believe they are high risk.
But despite all the challenges, he said the number one expenditure item for Australian CIOs this year is the integration of business processes and systems.
The top three drivers for integration are knowledge management, data mining and cost reduction. It gives better access to information and also improves ROI on existing applications.
But there are significant barriers to moving ahead with integration, Tebbutt said, such as cost, length of time to complete and the need to source additional expertise.
"These concerns remain a barrier to the innovation and competitive edge that CIOs want to bring to their business," Tebbutt said.
"Every business now has all the data it needs to operate, but unfortunately it isn't necessarily linked or accessible."
In many instances, Tebbutt said integration fails because organizations use suites of disparate technologies bundled together or extensions provided by application vendors which are trying to protect their turf.
"Most businesses still don't have the level of agility they need to compete in today's market or to conform to governance pressures such as Sarbanes-Oxley."
For agility and innovation, Tebbutt said, composite applications or application platform suites should include features such as one meta data repository, one architecture, one development model and one data model.
If done correctly, he said integration projects can deliver and make a difference. One customer, he said, has reduced 300 systems down to 50, which use a new, common, Web-enabled interface.
The head of knowledge at e-business consultancy, iFocus, Janet Brimson, said the reality is that enterprise information architecture (EIA) needs a five- to 10-year plan with ongoing lower level maintenance for it to work well.
Integrating information, Brimson said, is a massive task, which is why government departments are leading the way and are well ahead of the private sector.
"Enterprise information architecture projects are a big commitment in time and money, but the effects of bad EIA can be potentially crippling in terms of lost hours and profit," she said.
"Private sector management is hampered by a bottom-line dollar focus that can prevent a big picture view. Yet dysfunctional EIA could be costing a company millions.
"Government departments are more open to being innovative and they have to share information all the time."
The most common mistake in developing EIA is failing to consider the way an end user will interact with the business process and system.
"Historically, enterprises in government and private sectors have dealt with infrastructure and application systems first, with little or no consideration of the processes that exist at customer or employee touch points; this mistake has a domino effect," Brimson said.
"By misunderstanding the user, an organization risks purchasing inappropriate IT infrastructure and applications, which is where they will spend the most money. They need to refocus their IT spending."
To achieve successful EIA, Brimson said organizations will need to invest 11 to 15 percent of their total IT budget in the information space.
The current logic of spending big on infrastructure and applications with low spending on strategy and information, needs to be turned on its head.
Brimson believes the starting point should be the end user, adding that another major stumbling block is the IT department.
"At the moment IT departments are making the decisions on EIA spending and often they are the wrong people," Brimson warned.
"IT departments struggle to see the big picture of an organization and often don't work closely with business managers.
"Employing an independent group from outside the organization can often help solve this problem."