The Business of Interoperability

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

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.

Content Contributors: Dale Vile & Jon Collins

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Dale is a co-founder of Freeform Dynamics, and today runs the company. As part of this, he oversees the organisation’s industry coverage and research agenda, which tracks technology trends and developments, along with IT-related buying behaviour among mainstream enterprises, SMBs and public sector organisations.