The Integration Imperative

Yankee Group: Partner integration remains a priority in today's economy

Columbus, OH  August 23, 2002  Businesses are continuing to increase budgets for integration projects as technologies that integrate customers, service providers and suppliers gain importance in the corporate community, according to a new study by the technology consultancy Yankee Group.

Deploying technologies that manage transactions between trading partners can reduce costs and allow staff to concentrate on other high-value business automation projects, the consultancy found. Respondents to a Yankee survey ranked the reduction of transaction processing costs as the most valuable benefit from transaction management technologies, followed closely by the need to meet customer conditions for doing business.

"Consistent with previous Yankee Group demand-side research, corporate interest in solutions that interface with partners is strong," said Jon Derome, senior analyst at the Yankee Group. "Improving electronic communication with customers, suppliers, and service providers continues to be a corporate priority."

Integration technology budgets continue to increase, despite difficult economic conditions, as the price of integration solutions becomes more affordable for businesses to deploy, according to the study. Sixty-three percent of businesses surveyed reported their e-commerce technology budgets increased in 2002 over the previous year, and half of the respondents expected those budgets to increase in 2003 compared to this year.

The survey, sponsored by integration provider Sterling Commerce, uncovered the following additional trends:

" Many companies are extending electronic data interchange (EDI) systems to manage more complex inter-company business processes. Yankee Group expects this trend will continue as IT budgets expand and new technology standards such as J2EE and XML mature and gain adoption.

" Some companies turn to electronic trading network service providers for their ability to bring security, reliability and non-repudiation to the solution. Outsourcing data communication requirements to a third-party service provider can allow for scaling transaction volumes without increasing labor costs, thereby allowing company executives to focus on core competencies.

For the study, the Yankee Group conducted interviews with companies in a range of industries including the retail, wholesale, logistics service segments and the high-tech, industrial equipment, consumer packaged goods (CPG), food and beverage, and pharmaceutical manufacturing industries.

The full study is available on Sterling Commerce's Web site.

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