Outsourcing B2B Integration: The Forgotten Option
May 1, 2012 | Leave a Comment
Business continuity remains a major concern for enterprises as they move more mission-critical processes to the cloud. Outsourcing B2B integration while ensuring cloud security in order to effectively integrate business processes is challenging at best and ambiguous for certain. All too often, IT professionals feel that they will lose the reliability and availability needed if they don’t implement an on-premise cloud environment. However, there can be strategic approaches to outsourcing integration that include both a secure cloud environment for business processes as well as reliability and availability that extends beyond traditional borders.
Gartner defines outsourcing as follows: “A model in which a business acts on behalf of consumers of one or more cloud services to intermediate and add value to the service being consumed. Providers of cloud services can also benefit through the establishment of an ecosystem of partners which enhances the provider’s service and draws customers to it.” October 2010: Defining Cloud Services Brokerage: Taking Intermediation to the Next Level.
When comparing outsourcing B2B cloud integration to on-premise solutions, a major area of consideration is the security of cloud implementations. The burden of addressing the needs of an enterprise’s partner community while meeting the needs of moving to a more secure connection methodology is difficult, especially when it comes to the disparity of transport protocols utilized. And let’s not forget the cost of adhering to the multiple of security compliance organizations to help safeguard the data can be astronomical. For example, an outsourcer gets to spread the cost of implementing PCI DSS compliance over their multiple tenants. Everyone benefits without the individual capital outlay.
Before implementing any cloud strategy, there’s a basic set of questions that all organizations should address before moving forward. This includes: ”Which cloud implementation is best for our company’s needs? Do we outsource the cloud or manage it ourselves?” Also be sure to educate your self on common industry terms and jargon such as cloud outsourcing, cloudsourcing, and cloudware. Eventually as you continue to compare outsourced and on-premise cloud security concerns, you’ll notice that it ultimately boils down to whether both options can be as secure as enterprises require.
Clearly, one of the implementations an enterprise can address is B2B integration. The process of an enterprise extending its IT processes to its business and trading partner community including customers, vendors, suppliers and distributors is no easy task, but can be done efficiently and securely. The pressure for enterprises to connect more closely with their partner communities, tear down walls and optimize business processes such as procurement, eCommerce, supply chain management, inventory visibility, and logistics optimization is higher than ever.
It has been debated whether B2B integration is really needed by enterprises or whether companies can get by with putting their applications in the cloud and provide broader access. From thorough conversations with enterprise customers, it is evident that there is a lot of pressure on IT departments today to mitigate data center overhead and provide a more efficient way to incorporate others into their ecosystem.
Many in the industry also question whether providing B2B integration on-site is an IT department’s charter or whether the IT pros should instead spend their time on more strategic projects and initiatives to help drive revenue. If there is agreement to integrate processes, which more and more companies are considering, then the options are: keeping things as status quo, build it yourself and keep it on premise, as many IT departments have today, or outsource to a cloud-based platform.
Taking a look at these three options can certainly result in a lively discussion. Keeping things at status quo for most organizations means having manual processes, time-intensive quality control resulting from errors that occur, requires in-house expertise on subject matters such as cloud security, and the loss of revenue and/or opportunity because of the lack of implementing in a timely and cost effective manner. However, building the cloud integration environment yourself and keeping it on-premise may solve a specific integration challenge but does not necessarily provide the broader implementation that is conducive to the changing business environment.
The burden of finding and selecting the right combination of software, middleware, appliances, and hardware falls on you as opposed to relying on someone else that already has the environment where those decisions and tests have occurred. The outsourcer has invested their time and resources to ensure a secure and robust environment those other companies can leverage. This allows for quicker implementation resulting in achievement of business goals. In fact, the high upfront and ongoing capital expense to create a battle-tested cloud environment is clearly something all IT managers need to consider. Typically, the cost just to get started will entail a $50K to $100K hardware and software expense; implementation and consulting services is about $25K to $50k or more and the cost for the on-going support and maintenance is at least $50K to $100k annually.
However, by leveraging a cloud platform to integrate your business processes, companies don’t have to pay any of the upfront cost. Instead, they can leverage the power of the internet without having to install additional hardware or software. The limited upfront cost is focused around getting an organization and its community on-board quickly. The subscription based model that the “outsourcer” adheres to is an operating expense and eliminates the capital expenditure approval process.
While there is criteria to evaluate when considering whether to build or outsource, many organizations will find that planning resources related to the core competency of a business as opposed to whether a team has the skill set to implement and manage the B2B integration will be another hurdle they must address. The ability to minimize the time-to-market, enabling enterprises to be more competitive in a timely manner, is critical to meeting the demands of the ultimate consumer. Do enterprises have the resources needed to on-board partners quickly? Most, if not all, do not.
Last but not least, we must consider the security and compliance implications. When an outsourcer has integrated data it’s important to transport security into their model as well. This indication is best suited to ensure a safe full loop data process. Since many companies work with partners that have their own security policies, it is unrealistic for the enterprise to expect their community to follow their security guidelines. An outsourcer mitigates the disparate security policies to ensure a smooth and secure experience.
As companies continue to evaluate their cloud strategy and debate the implementation of an on-premise solution or utilize an outsourcer, there are many considerations to ponder. Discuss these issues and realize for your own organization that there are many ways to successfully implement a cloud integration strategy.
About the Author:
Stuart Lisk is a Senior Product Manager for Hubspan, working closely with customers, executives, engineering and marketing to establish and drive an aggressive product strategy and roadmap. Stuart has over 20 years of experience in product management, spanning enterprise network, system, storage and application products, including ten years managing cloud computing (SaaS) products. Stuart holds a Certificate of Cloud Security Knowledge (CCSK) from the Cloud Security Alliance, and a Bachelor of Science in Business Administration from Bowling Green State University. For more information, go to www.hubspan.com or follow the company on Twitter @Hubspan