The Business of Interoperability

What really matters, and why?

Published/updated: June 2010

By Dale Vile and Jon Collins

‘Interoperability’ is a widely used word in IT industry circles, but it can mean different things depending on the context in which it is being considered. In this paper, we put IT industry politics and IT vendor interests to one side and look at interoperability from a business perspective, focusing specifically on matters of business value, cost and risk.


Ease of interoperability within IT systems is more important now than it has ever been
Freeform Dynamics’ research confirms it is not unusual for large organisations to have hundreds, if not thousands of applications running on a similar number of servers, with even small to medium enterprises typically having ten or more systems in place. The evidence tells us that while many business processes are dependent on multiple IT systems, the amount of manual activity outside of automated systems continues to translate into significant cost and risk to the business. It is understandable therefore, that interoperability between IT systems is very much front of mind in many organisations. Meanwhile, industry trends in areas such as integrated solution stacks, cloud computing, unified communications and so forth have raised the stakes for interoperability still further.

Industry standards are not the ‘be all and end all’ of interoperability in IT
Whereas interoperability is frequently identified as a priority among mainstream IT professionals, a lower level of emphasis is generally placed on compliance with industry standards. This is in part because in many areas of IT, such standards typically lag the innovation curve: neither vendors nor customers are willing to wait for relevant standards to emerge and be ratified, or existing standards to be updated, before selling or adopting new and innovative solutions. Beyond this lag phenomenon, de facto and/or proprietary standards often exist that are already very effective at solving interoperability issues, reducing the urgency for official standards in many cases.

When evaluating interoperability needs, it is important to focus on business requirements
Business requirements can vary considerably, from basic file/batch exchanges at one end of the spectrum to highly optimised real-time system-to-system requirements at the other, so generalisation or dogma can be dangerous when setting policy. The following parameters are useful when analysing requirements – a) the business value of good interoperability in terms of increased flexibility, choice and responsiveness, b) the cost of poor interoperability in terms of process inefficiency and IT integration overhead, and c) the risk of ‘interop-unfriendly’ solutions that frequently lead to business constraints and vendor ‘lock-in’. In practical terms, interoperability risks relate not only to the openness of interfaces and formats, but also to the pervasiveness of solutions from a market incumbency and acceptance perspective. With these factors in mind, policies and investment criteria must be centred on the needs of your business, rather than idealism or any notion of there being a single ‘right way’ to do things.

These summary points are discussed further within the paper, along with examples and advice to help IT and business professionals navigate their way through this complex but important topic.

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