The way Gartner defines it, system integration is a simple concept—modern businesses rely on a smattering of software and systems to function. System integration is the process of making all those systems and software work together harmoniously so businesses can function.
Now, to be fair, just because you work in an information and operations (I&O) role doesn’t necessarily mean you need to worry about integrated systems.
Let’s say you work for a business that hasn’t gone through any mergers or acquisitions, whose operations don’t require real-time data sharing or significant interdepartmental dependencies, and functions on a single, standalone unified platform. That being the case, you would have few, if any, systems to integrate.
But, for I&O leaders working for one of the other ~99.99% of businesses in existence, system integration is a big deal. This is especially true with accelerated digital transformation becoming such a vital priority for I&O leaders.
In turn, it’s equally vital to command a solid understanding and appreciation of modern system integration—different ways it’s undertaken, the benefits of successful integration, and challenges that often arise in the process.
What is system integration?
As the term suggests, system integration refers to the process of linking different computer systems and software applications together. Integration can be either physical or functional, with the goal of disparate elements acting as a seamless, coordinated whole.
While the end result is the same, the means to the integrated end differ based on which technique is used in the process:
Common data format: This form of system integration involves converting data to a common format. For businesses using multiple systems, common data format reduces data translations needed by eliminating the need for each distinct system to convert data to and from every other system.
Horizontal integration: In businesses where a large number of systems need to be integrated, a horizontal integration process can be ideal, as it leverages a subsystem to connect all other systems. This subsystem, also called an Enterprise Service Bus (ESB), serves as the hub every system integrates with, avoiding the need for complete inter-system integration.
Vertical integration: Rather than utilizing subsystems for a horizontal hub and spoke approach, vertical integration builds systems into “silos” where newer systems interface with older systems (or vice versa). This approach can be attractive, as it tends to be quick and easy to implement. But vertical integration results in many dependencies, which add complexity over time.
Star integration: Also referred to as Spaghetti integration and point-to-point integration, this approach to integration requires each system to interconnect with many other systems. While star integration provides flexibility, it also leads to complexities as the number of systems increases.
Common benefits of system integration
The benefits of system integration for businesses are tied to common business needs and functions. This is why all businesses, at some point in their existence, must consider and/or undertake the process at some point.
Here are six common benefits and functions:
- Technological adaptability: At some point, every business will need to implement new systems or technologies, like supply chain management software (SCMs), customer relationship management software (CRMs), and enterprise resource planning software (ERPs). The effectiveness of these new additions is contingent on their ability to communicate with pre-existing systems they’ll operate alongside.
- Data consistency and real-time functionality: Along with adopting systems, business functions require consistency as the amount of data the business handles naturally grows over time. System integration plays a supporting role in staying synchronized and accurate, especially when the business needs to utilize its data in real time.
- Scalability: Adaptability and consistency are aspects of the overall scalability system integration enables. Utilizing the right method of integration and other technology-enabled solutions like automation minimizes complexities and inefficiencies that can hamper organizational growth.
- Optimized business processes: To enjoy sustainable growth, businesses can’t simply get bigger. They need to grow more efficient over time, too. Highly integrated systems help businesses streamline their operations, automating data transfers between systems, which reduces the chance of errors due to manual inputs.
- Mergers & Acquisitions (M&A): It’s common for businesses to merge, or for one company to acquire another. In these situations, it’s also common that disparate systems need to be integrated so they can work with one another. Typically, these integrations involve different financial systems, customer databases, and supply chain management systems.
- Improved customer experience: As companies grow, they can’t lose sight of the customer experience (CX) that’s driving that growth. System integration ensures marketing automation software, customer service systems, and CRMs improve the organization’s ability to cater to its customer base.
Technically, these benefits can have positive effects on a business at any stage of its existence. But the impacts themselves can vary depending on when they’re adopted. So, identifying when systems within a business need integrating is key to getting the most out of the process itself.
When (not if) system integration is required
In addition to timing, the need for system integration can also be driven by a given organization’s size, operational needs, strategic goals, and tech infrastructure.
For instance, as the tech ecosystem within a business matures, it may begin to rely on a collection of operating systems that can’t inherently communicate. Due to this interoperability, keeping things running smoothly then increasingly requires manual effort to transfer and synchronize data between these systems.
This human element doesn’t scale efficiently. It also introduces chances for error. Both factors can dramatically increase operational costs. And, at some point, undertaking system integration becomes necessary as the business continues to grow.
In fact, growth of any form can accelerate the need to implement some form of automated, integration solution. This includes traditional growth or expansion of the business (including the aforementioned mergers and acquisitions), as it enters new markets, increases product lines, or scales up production. Doing so often requires diversifying the existing tech ecosystem with new software and systems.
Businesses can also get to a point where the pace of data-to-decision-making needs to increase. This can require a shift to real-time data and reporting, and systems integrated to the extent that data is consistently up-to-date, in addition to seamlessly transferred and synchronized. System integration is also necessary to introduce process automation, further increasing speed and operational efficiency.
System integration challenges
Despite the significant role timing plays in determining when a system integration process should be implemented, challenges are inevitable. While not comprehensive, business owners should anticipate having to navigate the following:
Maintaining consistency: Change always comes at a cost. And ensuring data consistency while integrating multiple systems presents major challenges as teams must navigate multiple data formats, data validation rules, synchronization timing, and more to ensure integration is successful.
Balancing scalability with complexity and costs: As the business grows, its underlying software and systems must handle the increased load, which can require system and integration testing to maintain performance and solve issues that arise.
Additionally, as new systems are added, their unique protocols, data formats, and standards can present difficulties in ensuring they can communicate with existing and/or legacy systems. This ever-present pressure to scale can get expensive, as successful system integration involves on-premise project management, troubleshooting, and ongoing maintenance in addition to the costs of new software and hardware.
Maximizing security and minimizing downtime: Businesses that deal with sensitive data (i.e., compliant with HIPAA, GDPR, etc.) must ensure that security is not compromised as business systems are enhanced and, ultimately, integrated. Additionally, regardless of the type of system integration used, the process itself always carries a risk of downtime, which can disrupt business operations.
Vendor support: Finally, it takes a village to ensure the system integration process is successful. Despite careful planning and support from project management, teams may require help from experienced external consultants and support from vendors.
Get more out of system integration by putting more into automation
Time, available talent, and budgets are finite. This means the ability to free up resources by introducing efficiencies in other business areas can prove invaluable. In this regard, business process automation (BPA) can become the holy grail for I&O leaders.
Automation solutions like our own ActiveBatch can give you end-to-end workflows spanning your entire IT environment. Best-in-class automation solutions like ActiveBatch also leverage no-code connectors and low-code REST API adapters capable of connecting everything from your customer data platform (CDP) to your marketing automation tools.
With the stakes involved in getting system integration right, the right automation partner borders on essential. Learn more by scheduling a quick demo today.
