Enterprise Application Integration (EAI) Creating Value From Business Process Integration Name Title Department

1. Enterprise Application Integration (EAI) Creating Value From Business Process Integration NameTitleDepartment

2. Agenda • What is business process integration? • The business environment and common integration scenarios • Case studies: increasing business agility by improving enterprise application integration • The Microsoft® enterprise application integration solution explored

3. What Is Business Process Integration? Business Process Integration, or EAI, is a software solution that allows businesses to integrate internal applications, securely connect with business partners over the Internet, and automate business processes.

4. Creating Competitive Advantage • Get ahead of competitors by ensuring you’re using all of your data to make smarter decisions, faster • AMR Research estimates that less than 10% of enterprise processes are integrated in a dynamic framework that allows a company to respond to changes in market conditions • – AMR Research “The Report on Enabling Technologies” April 2001 • Without BPI a business faces: • Lost revenue opportunities • Increased cost of doing business • Competitive disadvantage

5. The “Ideal” Enterprise ConnectedCustomers IntegratedPartners EmpoweredEmployees • Web Presence • Marketing • Commerce • Customer Service/CRM • Buy-Side Commerce • Sell-Side Commerce • Marketplace Infrastructure • Supply Chain Mgmt • Desktop Productivity,Collaboration • Employee Portals • Business Intelligence • Mobile Solutions IT Infrastructure Common Application ServicesCommon Data Model

6. That Achieve Business Value Drivers Result In … Measured by … • New channels • New product introduction • Mass customization to customer • Service innovation/differentiation Revenue Growth Net Profit But how do you derive value from your systems if they cannot share data and make business process management more efficient? • Functional costs and overhead costs • Workforce flexibility and costs • Automation • Standardization of communication infrastructure • Cycle time reduction Operating Cost Reductions Stakeholder Value • Warehouse optimization • Transportation optimization • Outsourcing/co-sourcing Fixed Capital Efficiency Return on Net Assets • Supply chain inventory visibility • Supplier/co-managed inventory • Rapid replenishment • Customer-supplier process alignment Working Capital Efficiency Time = Competitive Advantage Key Business Processes Drive Competitive Advantage and Shareholder Value

7. Business Imperatives To build and maintain business value, an organization must respond to today’s business imperatives: • Reduce process cycle times • Make better decisions faster • Leverage dynamic business relationships • Quickly respond to customer demands • Effectively respond to competitive threats

8. Supplier Supplier hub Marketplace Basic Enterprise Environment Typical Enterprise Business Partners Custom Business Applications Inventory/Logistics Security Firewall EDI Financial Systems XML xCBL Customer Relationship Management Enterprise Resource Planning EAI B2B

9. Business Drivers for EAI • Automated business processes • Conformity to business process structures • Transaction-focused orders • One-time data entry • Real-time, automatic response • Centralized business rules • Protection of information Source: EAI Journal August 2001

10. Business Drivers for B2B • Automated touch points between partners’ business processes • Conformity to partners’ organizational and business process structures • Document-focused business transaction (e.g., purchase order) • No data entry • Fast, reasonable response • Notification only when something doesn’t work • Protection of information Source: EAI Journal August 2001

11. Control costs, resource requirements and complexity of integration projects • Maximize value of existing technology investments • Unlock data trapped in inaccessible systems Return On IT • Improve company’s ability to: • Drive revenue • Create new services and offerings • Focus on customer satisfaction and loyalty Return On Customer Centricity • Automate complex business processes easily • Manage and monitor business processes • Improve integration with partners Return On Processes • Improve productivity and efficiency • Capitalize on existing skill sets • Minimize learning curve for new processes Return On People Integration Increases Agility

12. Rapidly Improve Business Processes • Easily automate complex business processes • Quickly design, automate and deploy business processes • Automate workflow • Document business process steps and routines • Manage and monitor business processes • Quickly react to problems before they affect bottom line • Capitalize on more efficient supply chain Return On Processes Return On Customer Centricity Return On People “Since we began using BizTalk Server last summer, we have trimmed 80% off the timewe used to spend manually processing orders with one of our largest customers.”David Quarles, VP Linear Technologies Return On IT

13. The Challenge: Organization • $100+ billion manufacturing organization • 120+ plants and 150+ logistics carriers • 10,000 key suppliers of all sizes Business challenges • High operational costs of manual business processes • Excessive manufacturing and inventory costs from parts supply challenges • Inability to quickly and easily establish new business relationships over the Internet • Inability to quickly react to competitive issues due to inflexible systems

14. The Results: Revenue opportunities up Operation costs down Integration costs down Expanded opportunities with key partners through faster integration over the Internet Reducedoperational costs by automating traditional manual processes with small suppliers Reducedintegration costs based on ease of use

15. Customer Feedback: “These real-time collaborative applications will provide Ford Motor Company an opportunity to streamline communications both internally and externally with our partners, customers, dealers,  and suppliers.  This seamless communication capability will enable Ford to convert data into knowledge, allowing us to integrate our entire value chain to deliver the right products and services to our customers at the right time.“ Frank Taylor VP Materials Planning and Logistics “We believe Microsoft brings some unique solutions to the challenges we face. We need a strong partner in this space who understands the importance of linking the entire enterprise and capitalizing on the use of the Internet with flexible communication tools." Marv Adams CIO

16. Improving Focus on Customers • Build stronger, more valuable customer relationships • Deliver more responsive service, accurate answers • Enable flawless customer interaction • Increase revenue opportunities • Create new channels of business opportunity • Maximize business agility to quickly respond to competitive threats Return On Processes Return On Customer Centricity Return On People “We used BizTalk Server to automate our customer ordering process, integrating our ERP, warehousing, and logistics systems with a web-based commerce application. Customers now place, track and change their orders online, cutting our order processing costs by 90%."Lars Andreason, IT Manager Svenska Foder Return On IT

17. The Challenge: Organization • $29 billion, 300,000 employee manufacturing organization • Many distributed divisions, started with Tyco Valve, North American manufacturing sub Business Challenges • Inability to capitalize on revenue opportunities of international markets • High order costs ($300 per order) based on manual processes resulting in order entry errors, assembly and shipment errors, buy-backs • Declining customer satisfaction levels due to manual and process errors

18. Sales Customer Satisfaction Operations costs International sales up 100% Estimated division sales up 5% Customer call time per sale down 50% Customer returns down 50% Order entry errors down 60% Order costs down 50% Headcount cost down 20% The Results:

19. Customer Feedback: “We have opened new international markets at very little cost and have reduced our cost of sales and in turn freed up cash flow. We anticipate saving 1% - about $300 million – of our total revenue in direct operational expenses over the next 3 years by implementing these solutions across multiple business units.” L. Dennis KozlowskiCEO, Tyco International “Utilizing an industry standard approach of Plan-Design-Implement-Manage and Support, we were able to implement baseline functionality and achieve an initial return-on-investment within 3 months after implementation.” Jeff LynchDevelopment Manager, Tyco Flow and Controls

20. Maximizing Productivity • Simplify tasks • One-time data entry • Speed decision-making • Enable more effective access to current information • Inventory and logistics tracking • Customer order management • Resource planning • Capitalize on existing skill sets Return On Processes Return On Customer Centricity Return On People Return On IT

21. The Challenge: Clear Channel Organization • $5+ billion international media organization, have grown 100%+ per year for last 3 years • 1200+ radio stations, 20+ TV stations, billboards • Diverse mix of systems through acquisitions Business Challenges • Manual, time consuming process of aggregating data from disparate, distributed systems • Substantial cost of selling advertising space to distributed customers • Lost revenue based on inability to centrally approach and manage corporate customers • Inability to quickly leverage acquisition value

22. The Results: Clear Channel Solution • Microsoft .NET Enterprise Servers including BizTalk Server for EAI infrastructure • Detailed advertising inventory data transformed and combined in centralized data store • Web-based access to consolidated advertising inventory to drive customer sales Benefits • Lower cost of sales based on consolidated, Web-based information access • New revenue opportunities from ability to manage corporate assets centrally • Greater customer satisfaction through simpler and more responsive account management

23. Customer Feedback: Clear Channel “BizTalk Server was the only solution that we could easily adapt to meet our evolving business needs. All the others that we evaluated, such as webMethods and Tibco, required adapting our business to the product.” “The BizTalk Server technologies were very familiar, intuitive, and easy for our technical personnel to learn, allowing us to quickly and easily apply them to solving our integration challenges.” Steve Solomon, Manager, New Technologies

24. Capitalizing On IT Investments • EAI supports key business activities including B2B and Supply Chain integration • Integrate business processes running on virtually any application or technology • To capitalize on BPI you must overcome: • Heterogeneous systems • Legacy applications • Isolated islands of data Return On Processes Return On Customer Centricity Return On People “We’re totally focused on our product and don’t have the resources to purchase lots of expensive EAI and B2B solutions. We’re using BizTalk Server because it combines all of that functionality in a product we can afford. It is going to make true e-commerce affordable not just to the largest companies, but to everyone.”Susan McKay, VP Aircast Return On IT

25. The Challenge: UK Government Organization • Government for GL-8 country • 200 major government departments, 482 local government authorities • Huge diversity of applications and technologies Business Challenges • Create online portal for all government services to 3+ mill businesses and 60+ mill citizens • Had to guarantee security and reliability of all interactions with government • Massive interface and transaction volume • Political: history of time and budget overruns

26. The Results: UK Government Solution • Microsoft .NET Enterprise Servers including BizTalk Server for EAI infrastructure • Online service for obtaining digital certificates • Online gateway to broker integration between all departments, businesses, and citizens Benefits • Higher constituent satisfaction through accessibility of services and benefits online • First government integration project in history to be delivered on time, on budget • Lowered costs through flexible centralized service for all integration activity • Increased flexibility to handle future diverse needs

27. Customer Feedback: UK Government “Making UK Online happen was an enormous task...there were multiple projects within that, of which the Gateway was probably the most difficult technically to do....” “The stakes were enormous...we were making commitments directly to the Prime Minister...we had to find a team who would work with us that we could be confident would deliver...and we did.” “It’s gone great. The project went live when we said it would go live; we hit our target, and we hit our budget…” Andrew Pender, Electronic Envoy UK Government “It had to be right the first time...it was absolutely fundamental to our e-Government vision...every challenge we have come across has been solved.” “In the time that we have built it, people would still have been doing feasibility studies.” Alan Mather, Project Manager, UK Online

28. BizTalk Server As An EAI PlatformScalable, Reliable Internal Integration Backbone Reduced business operations costs Lower cost of application integration BizTalk Server Better Business Decisions Through Unified Data Greater business responsiveness through real-time data access

29. Customers Increase customer loyalty through new services and programs Suppliers Lower costs through automated purchasing Marketplaces Increase revenues by leveraging new sales channels BizTalk Server as a B2B PlatformSecure, Reliable External Integration Gateway BizTalk Server

30. Complete Integration Cost effectively integrate applications within and between organizations • EAILower the cost of internal application integration • B2BQuickly implement secure, reliable trading partner relationships over the Internet • Business Process AutomationDefine and implement integrated business processes using EAI and B2B services

31. Supported Business Applications