Survey Finds Hidden Costs In Application Integration

September 29th, 2006: A new survey by Australia’s InterSystems has found that 50 percent of IT projects that attempt to enhance or integrate business applications fail, while 27 percent of the cost of implementing new applications goes towards making them compatible with existing applications.

Titled “Connecting and Extending Applications”, the survey canvassed 79 CIOs and IT Managers from 63 organisations at Gartner’s Application Development, Integration & Web Services Summit in Sydney this year.

InterSystems says that 75 percent of respondents cited insufficient IT staff, while 65 percent reported a shortage of IT professionals with requisite skill sets, as the main barriers to completing integration projects within desired deadlines and budgets, and with the targeted return on investment.

“What our survey shows is that significant resources are being ineffectively applied to the problem of connecting and extending applications,” says Denis Tebbutt, Managing Director of InterSystems in Australia. “There is clearly a need for simpler, more affordable approaches to enriching and integrating applications.  New capabilities such as adaptable workflow, portals, dashboards, and business process automation are hard for organisations to implement quickly and cost-effectively with most of the technology products that have been available.”

The survey’s key findings were:

• Cost reductions through better access to information is the most pervasive factor (chosen by 63% of respondents) driving organisations to gain additional value from their IT applications.
• On average, 27% of the cost of implementing a new IT application is consumed by making it connectable or interoperable with existing applications.
• There is no single method that a majority of surveyed organisations were confident or very confident they could use to quickly and cost effectively connect to or extend their IT applications.
• 75% of respondents cited insufficient staff resources as a barrier to being able to quickly and cost effectively connect to or extend their organisations’ IT applications.
• 68% of organisations had already customised applications or planned to do so in the next 6 months to connect to or extend their IT applications. A majority of organisations had already replaced or reengineered applications or plan to do so in the next 6 months.
• Organisations have about a 50/50 chance of successfully delivering – on time, on budget, or with the targeted return on investment (ROI) – a project connecting or extending strategic IT applications.

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