Introduction
Economics is the social science that studies the production, distribution, and consumption
of goods and services. More importantly, economic concepts are applicable to integration
competency centers. ICCs are shared service functions that operate in an internal economy
where they serve multiple groups. ICCs need to compete for the attention of internal consumers
who often have alternative choices that allow them to avoid using the shared service if it isn’t
perceived as providing value. ICCs must also compete internally for investment capital in order to
improve service delivery capabilities and must make regular decisions about how to best allocate
limited resources.
This paper explores the effective use of integration competency centers in medium-size and large
organizations and how economic concepts can be applied to achieve breakthrough business
results. These results include improved bottom-line profits, effective management of risks and
regulatory compliance, consistent customer experience across products and channels, and
enhanced quality of work-life for employees. As a side benefit of applying these concepts, a
sustainable model is established for the ICC in a way that is highly engaging and rewarding for the
people that work in it.
This paper is divided into five sections:
- What Are Integration Competency Centers? This section provides a defi nition of ICCs and the various operating models they come in. It also discusses the motivation for establishing ICCs and why they are a critical aspect of a modern corporation.
- Challenges and Root Cause Analysis. This section explores the inherent difficulties in establishing, operating, and sustaining an ICC. In particular, it illuminates some of the forces behind the business-IT divide and why it is so hard to achieve alignment between business and IT needs.
- Economic Framework and Incentives. This section introduces a framework for evaluating funding alternatives. It also explores how social and moral incentives can be used to drive changes in an organization and infl uence the behavior of individuals and groups.
- Financial Models. This section presents various chargeback options and investment strategies and how different ICC organizational models can best use them to encourage positive organizational behavior.
- Case Studies. The final section explores several real-world case studies related to ICC shared infrastructure investment justifi cations and chargeback accounting methods. The lessons learned and insights are highlighted.