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Moving to the Event-Driven Economy

Enterprise Application Integration (EAI) and e-business expert David S. Linthicum describes the necessity of moving to an event-driven economy and talks about how we will soon see the explosive growth of the event-driven economy and B2B application integration.

Enterprise Application Integration (EAI) and e-business expert David S. Linthicum describes the necessity of moving to an event-driven economy and talks about how we will soon see the explosive growth of the event-driven economy and B2B application integration.

The event-driven economy is the next destination for e-business, providing us with the ability to react instantaneously to internal or external events r to meet consumer demand. It is also a mechanism to do business, dare we say it, at the speed of thought.

Few examples illuminate the difference between the conventional method of doing business and e-business more clearly than the purchase of a new car. Currently, a customer walks into an automobile dealership and orders a car. That order is then placed with the automobile manufacturer. The manufacturer, in turn, orders the parts and creates the car, while the suppliers order raw materials to create the parts. Paper purchase orders are sent to the suppliers, who ship the materials and send paper invoices to request payment. Only then, when all the parts are received from the suppliers, can the car be manufactured and sent to the dealer—resulting in even more paper.

This process typically takes months, not weeks. It should take only days.

Of course, most "supply chains," such as the one described in our car procurement example, are at least partially automated these days. Many owners of supply chains already use enabling technologies such as Electronic Data Interchange (EDI) to share information, such as order and payment data.

Being "partially automated" is not enough. We need to think more comprehensively about how we capture and react to events. We need to recognize that all components of the supply chain affect the supply chain itself. For example, when that customer walks into our car dealership and orders a car, or when that customer orders a car via the Internet, that action is, in and of itself, a business event that is captured. Our system must react to this event by performing several tasks instantaneously: logging the event, processing the rules bound to such an event, and moving information to other interested systems or humans.

The event must be logged so that it won't be forgotten if there is a failure as it is being processed. We need to process rules bound to the event, such as price limits and credit requirements. The internal systems (such as inventory) and external (supplier) systems must be informed of the event. Finally, the information created by this event—in this example, customer and car configuration information—must move forward to the appropriate systems. Typically, this should be a second subprocess.

What is of note here is that all relevant systems are notified of the event and are supplied with all appropriate information, in real time, so that they can, in turn, instantly react to the event (see Figure 1). In our car purchase example, the sales event captured by our manufacturer's system generates an instant requirement for parts to create the car. In turn, this information triggers a cascading series of additional events within systems owned by the suppliers, events such as notifying a supplier of the raw materials required to build the parts. A single, primary event could thus trigger as many as several hundred other events, which in turn could trigger several thousand more events. It is exactly this chain reaction of events—events that serve a business need—that we are hoping to create.

Figure 1
Example of an event-driven supply chain.

Remember, this event-driven supply chain scenario is an instantaneous process. Within seconds of the initial order, the suppliers are processing requests for the raw materials, the factory floor is scheduling workers, and the logistic group is assigning resources to ship a car to a particular dealer. There may be hundreds of systems involved with the sale, creation, and movement of this car, all exchanging event information simultaneously. Of equal relevance is that all systems participating in the event will be notified instantly if any change occur along the supply chain—that is, if demand changes (for example, car sales are down) or if there is a parts shortage. Instantaneous notification is a two-way street, from orders to suppliers, and from suppliers to orders.

As we learn more about integrating applications, the event-driven economy will become more of a reality. Today, systems are bound together by primitive connections, where batch and file transfers serve as the primary integration mechanisms. However, with the marriage of the Internet and more advanced middleware solutions, it won't be long before small versions of the event-driven economy are running, typically around supply chains.

This will be only the beginning. When businesses realize that this method of "speed-of-light" business processes means reduced costs and huge competitive advantage, we will see the explosive growth of the event-driven economy and B2B application integration.

If it is fair to assume that, at some point, we would like to proceed to an event-driven economy, then we need to embrace the concepts, approaches, and technology of B2B application integration. In doing so, we will once again find ourselves having to define e-business.

As corporate dependence on technology has grown more complex and far reaching, the need for a method of integrating disparate applications between enterprises into a unified set of business processes in support of B2B e-business has emerged as a priority. After years of creating islands of automation within each company, users and business managers are demanding that seamless bridges now be built to join these islands together, thereby allowing commerce to proceed in real time. In short, they are demanding that ways be found to bind these applications into unified cross-enterprise e-business applications. The development of B2B application integration allows many of the enterprise applications that exist today to share both processes and data. Thus, it allows us to finally answer the demand for real-time, intercompany application integration in support of e-business.

Interest in B2B application integration is driven by a number of factors. As the pressures of the competitive business environment move IT management to shorter application life cycles, financial prudence demands that IT managers learn to leverage existing databases and application services rather than re-create the same business processes and data repositories over and over. Ultimately, this financial prudence, along with the opportunity for profit, fuels the interest in B2B application integration. The integration of applications saves precious development dollars while creating a competitive edge for corporations that share application information either internally or with external trading partners (B2B).

Currently, the vast majority of corporations uses several generations of systems that rely on a broad range of enabling technologies, technologies that have been developed over many years. Mainframes, Unix servers, NT servers, and even proprietary platforms whose names have long been forgotten constitute the technological base for most enterprises. These technologies, new and old, all provide some value to the enterprise, but their value is diminished if they are unable to leverage other enterprise systems that exist within other trading partners.

As we've already stated, the case for B2B application integration is clear and easy to define. Accomplishing B2B application integration, however, is not.

About the Author

David S. Linthicum is the CTO of SAGA Software, Inc., in Reston, Virginia, and is an internationally known Enterprise Application Integration (EAI) and e-business expert. During his career, David has formed many of the ideas for modern distributed computing, including EAI and B2B application integration, approaches and technology that are in wide use today. In addition, David has authored more than 300 articles for major computing publications and writes monthly columns in several popular industry magazines. He has authored or co-authored six books, including David Linthicum's Guide to Client/Server and Intranet Development, and the ground-breaking Enterprise Application Integration, just released. In his latest book, B2B Application Integration, David outlines his visions for the real-time economy and the technology to get you there today. David can be reached at David.linthicum@sagasoftware.com.

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