Irvine, CA November 15, 2001 Business partner integration as a utility?
That's the model being proposed by connectivity provider Viacore, which this week announced that it would make its partner-integration services available for a monthly fee with no upfront investments.
The company asserts that this "utility-like" model significantly lowers the amount of risk, capital expenditures and time required for building and managing what it calls a "partner integration network."
"Industry leaders, who are in the process of building private exchanges, discovered that large-scale, deep partner integration requires a very tight orchestration of significant technical and operational capabilities," argued Fadi Chehadé, chairman and CEO of Viacore, in unveiling the new payment plan.
In the past, Viacore contends, building a virtual private network to improve visibility into business partners' information might have entailed buying software, staffing an integration operation and maintaining a 24/7 partner monitoring and support center, all of which would have required considerable time and resources.
Now, Chehadé says, "The market is moving away from a model in which industry leaders are expected to make substantial, upfront investments in new partner integration technology, and more towards an environment where they outsource partner integration to a specialized utility, increasing flexibility and reducing risk."
"There are major advantages for companies that utilize managed services to accommodate the many complexities of gaining supply chain visibility," agrees Lauren Shu, research director of GartnerG2, a research and advisory service of technology consultancy Gartner. "Implementing the software, hardware, management services and many other elements required to electronically connect trading partners are usually not core functions for manufacturers. They would be better served by a provider that specializes in building and managing private trading exchanges."
By outsourcing partner integration functions, Viacore says, private exchange sponsors can focus their resources on defining and maintaining their unique information model and on implementing and managing the appropriate business application for that model.
As part its integration utility services, Viacore configures, deploys and operates private-branded, virtual private networks, which are delivered as utility services. The networks' services include infrastructure management, data and process management and trading partner integration.
The monthly fee for the network is based on the capacity requirements of each client. The fees vary based on the changing integration needs of each private exchange.