There are several models for implementing integrations and API services. In this article, we compare three approaches: in-house implementation, partner collaboration, and a full-service solution. We explain what to consider in each approach to ensure successful procurement and to make integration work accelerate your business.
The integration services landscape is changing. An increasing number of organizations want to acquire integration and API services as a so-called full-service solution. We interviewed Business Manager Sanna Mattila and Account Executive Jyri Junnola, who have worked with integration and API management services for a combined total of approximately 35 years.
If you are not yet implementing integrations through a centralized platform, we recommend reading our earlier article on the topic.
When does it make sense to handle integrations and API services mainly in-house?
"This model is often chosen when the organization has had strong expertise for a long time and has a clear strategic vision for developing their architecture. Often, moving data is part of their core business, and they may feel it’s best to keep in-house for competitive reasons. If you have the right talent and the situation feels stable, this can be a perfectly good and cost-effective model," describes Junnola.
What kinds of risks or considerations come with in-house integration development?
"Not all organizations have the capabilities to fully manage development, maintenance, and monitoring. In this model, the responsibility lies entirely with you – for better or worse," Junnola summarizes.
"On the risk side, it's important to think about how to retain key personnel, and what to do if they leave," describes Mattila. "For temporary needs, this model is often supplemented by external experts from a partner when permanent recruitment isn't desired."
"This model is often challenging from a budgeting perspective. There are usually no clear service components, productization, or internal pricing. And if you have a large organization that wants to allocate costs precisely to different departments or business units, that can be difficult," Junnola notes.
How does implementing integrations with a partner typically work?
"It depends on which parts you want to handle yourself. For example, development might be the customer's responsibility, while the partner manages day-to-day operations such as maintenance and monitoring. As a partner in such situations, we often also monitor for silence. For example, suppose we know a payroll run should be completed during a certain night, but it doesn't. In that case, automatic alerts let us immediately address the situation and start investigating," Junnola describes. "If needed, with full 24/7 service models."
"This model also easily enables a multi-vendor approach, meaning one vendor can handle maintenance services while several different vendors can be involved in development work. That naturally provides more flexibility," Mattila adds.
"Risks can be better shared with a partner, and it’s often easier to scale the team size up or down. You can get additional resources from the partner for implementation when needed, and the partner also shares the risk related to team size," Mattila explains.
What risks should be considered in this model?
"The customer must maintain a certain level of leadership and ownership of the architecture. You need to be careful that your expertise doesn't shrink too much when you're not involved in all the work," Mattila points out.
"Another key point is contract matters. You must ensure service portability. From the procurement stage, make sure that if you move away from a certain technology or partner, the work done doesn’t go to waste,” Junnola emphasizes. “Mistakes here can be very costly.”
What does a full-service solution include?
"This is a turnkey model where the partner delivers the entire solution: takes responsibility for architecture, provides platforms, development work, and maintenance," Mattila summarizes.
"Full-service integration solutions have definitely gained traction in Finland recently," Junnola says. "We’ve seen several large tenders where organizations have moved from other models toward procuring full-service solutions."
Why is it growing in popularity now?
"Building integration and API capabilities in-house can be a major effort. A large organization might need to hire dozens of people, which is rarely attractive. On the other hand, even a small organization might need one or two additional people, and the cost level can still become too high compared to the need. So it's easier to outsource this work," Junnola describes.
"With in-house-teams, you would also need to ensure they continuously train and develop along the way. The integration world moves fast, and it's understandable that responsibility for modern solutions is placed on the provider side," Mattila describes. "Not every organization can hire a top architect for their own staff, nor would they have dozens of colleagues to share learnings with."
"Pricing and budgeting also definitely support the popularity of full-service solution. Integration implementation can have a fixed price, as can maintenance, and there can be pre-agreed delivery time practices. From the customer's perspective, this is a highly productized and easy-to-buy service," Junnola notes. "If, for example, you're renewing an HR system that previously had 30 integrations, it's very transparent how to budget for it. And in addition, allocating these costs to the right departments or business units that use that HR system is straightforward."
"I think it’s clear that customers generally want to focus more on their core business. Integration and API services are important business enablers, but that capability doesn't always need to be kept in-house," Mattila concludes.
What kinds of risks are associated with the full-service model?
"Strategic leadership and coordination should still be maintained," Junnola emphasizes. "You need to be able to lead your own service development roadmap and stay on top of the big picture. It's good to describe in the RFP how operations will be organized in practice."
"Vendor lock-in and technology dependencies must be considered. Recent procurements have shown clear strategic choices where vendors are required to select technologies that have multiple providers and whose continuity is guaranteed," Junnola explains. "This helps ensure that work done doesn't go to waste at some point of discontinuity."
What else should be considered during the procurement of full-service?
"Remember IPR issues, such as ensuring that integrations will remain with the customer. In some cases, vendors have been asked already at the procurement stage to describe how the service can later be transferred to another vendor," Mattila adds. "This is smart preparation, since you're building structures with very long lifecycles."
"Vendor expertise and quality are of course important, just like in all procurements," Junnola concludes. "In this model, you rely even more than usual on the partner's expertise, so it may be wise to look into customer satisfaction among the vendor's reference clients."
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See also webinar: AI in integrations