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If your company acquires another company, it could take over a year, or years, to integrate its ERP and other systems with existing corporate systems. What do you do until then?
This is the challenge facing Johnson & Johnson (J&J), a global health care leader. J&J is the world’s sixth largest consumer health company and fifth largest pharmaceuticals company. It has more than 265 operating companies in 60 countries, with 126,000 employees, selling products in more than 175 countries. J&J is constantly acquiring new companies with legacy systems, and it is often difficult for senior management to get access to information residing in all these disparate systems.
This challenge has been handed to Jimmy Chou, J&J’s Director, Enterprise Architecture. Chou discussed his challenge with members of FEI’s Committee on Finance & IT (CFIT). “With a lot of disparate systems, there is no visibility at the enterprise level. Our people often spend 80 percent of their time looking for data, which is a waste of their time and effort.”
Chou described some of the conditions that make system transformation increasingly difficult:
- Little or no documentation;
- Limited knowledge of the complexities and functions of the newly acquired systems;
- Hidden constraints only stumbled upon near the end of integration; and
- High turnover in the acquired IT workforce.
As most of us know, yearly capital allocations are prioritized for operations and regulatory compliance projects, leaving little resources for new systems strategy. Chou predicts that this trend will get worse, not better, over time.
Rather than trying to integrate the systems and applications of newly acquired companies, Chou prefers data integration, using an in-memory data grid or “data hub.” He calls this functionality “Flexible Integration,” in which data from the acquired system is copied and imported into the existing corporate data hub. This data can now be accessed as easily as data from existing systems.
Flexible Integration provides a number of valuable features:
- Seamless data access and flow;
- Extensible business processes;
- Advanced data and analytics; and
Flexible Integration is just one part of Agile Data as a Service (ADaaS). Flexible Integration uses a virtual enterprise model that sits on top of all the company’s disparate systems. This virtual model then provides data and analytics to the existing business processes – Finance, sales order management, inventory management and global planning.
Big Data is a hot topic, but Chou argues that Big Data alone is not a complete data solution, and a Big Data platform is not designed for real-time transaction and processes optimization. “Big Data knows what to suggest, but Agile Data knows when to suggest it. Agile Data provides superior decision-making and quantifiable value through measured business productivity gains by way of reduced artificial complexity and uncluttered insights.”
Joe Prati, VP of Finance for Information Technology at J&J, provides the financial executive’s perspective. “In the past, we tried to get all the various ERP systems onto one platform. But this takes time. We don’t want to live with disparate systems of record forever, so Flexible Integration allows us to use data from newly acquired systems before those new systems of record are converted to existing systems. It essentially shortens the time to get to a common platform.”
Joe Prati is the incoming chair of FEI’s Committee on Finance & IT (CFIT). He was interviewed for the new FERF report, “Agile vs. Waterfall: The Challenge for Finance,” which can be downloaded from the FERF website.