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Advanced
How To Guides
Systems Integration
Introduction
The successful integration of disparate information
systems within an organisation gives company personnel
a consolidated view of vital information about customers,
suppliers, and partners. This view allows companies
to gain a better understanding of their own business
processes, and develop best practices around business
and IT. Even in small organisations, different departments
often find themselves working with different sets of
information, which can lead to confusion and alienate
clients. Integration allows companies to operate more
smoothly, be less prone to error, and avoid repeating
or neglecting important tasks. Integrated applications
allow business processes to flow seamlessly from end
to end, which enables faster, more efficient, and more
accurate sharing of information among applications and
business groups.
For example, Customer Relationship Management (CRM)
by definition is about managing the entire relationship
between the customer and your company, not just knowing
where they are located and what people work there. The
contacts are important, but they are not enough! If
your customer calls your Sales department, and Sales
have to transfer the customer to Accounts to talk about
their balance, and then to Shipping to determine why
their shipment is late and by the way, they need to
order one more item, so are transferred back to Sales….!
Well, you get the picture, they're not a happy camper
at this point. Now if only the Sales personnel could
view ALL of the customer's relevant information and
respond directly, think how different the situation
could be. And when Sales update their database to reflect
a change in the customer's address, think how beneficial
it would be if the Accounts and Shipping databases were
automatically updated at the same time.
The priority for application integration has risen dramatically
as a result of its inherent need within major business
projects such as CRM and Internet exploitation. As a
result, an industry has grown up around providing solutions
to integrate enterprise-wide data, applications and
business processes - this is often termed Enterprise
Application Integration (EAI).
The most typical types of business initiatives driving
integration requirements today include reducing business
cycle times to increase efficiency and competitiveness,
improving customer satisfaction, mergers and acquisitions,
and regulatory requirements. Some of these initiatives
are strategic and some tactical. Different business
requirements call for different types of integration
technologies.
Companies embarking on initiatives to improve business
efficiency may be moving to real-time business processes,
or integrating transactions across the value chain to
reduce time and costs. A strategic approach to improving
business efficiency requires integration to automate
and manage business processes. Tactical initiatives
to improve business efficiency include eliminating reconciliation
issues, data inconsistency, and reporting discrepancies
across the enterprise. Tactical initiatives typically
take less time, consume fewer resources, and cost less
than an enterprise solution. The technology to implement
tactical solutions is typically only a portion of the
full integration platform.
Companies embarking upon projects to improve customer
satisfaction may be considering a number of different
technical solutions, including customer relationship
management (CRM) systems, portals, mobile integration,
sales force automation, or a combination of all or some.
Again, some of these projects may be enterprise-wide
and strategic to the organisation, and some may be more
tactical in nature. Metrics used to measure customer
satisfaction include:
- Customer
retention statistics
- Response
time to customers
-
Number of complaints
- Issue
resolution rate (% and time)
-
Error rates
- Customer
value (computed as sales per customer, or lifetime
value of customer)
Mergers
and acquisitions inevitably result in redundant
and incompatible systems, leaving companies with just
a few choices: Choosing one system over the other and
a large data conversion project; leaving the systems
in place and integrating them; or implementing an entirely
new system, then converting or integrating both. In
large organisations, a combination of approaches may
also be used. Integration projects resulting from a
merger or acquisition are usually treated as tactical
projects or one-time conversions. However, companies
seeking to improve business efficiency through the merger
and acquisition should also consider business processes
integration and management across all business units,
regardless of where they are located or the technologies
the systems use. This undoubtedly will require a higher
initial investment, but it also offers the highest potential
return-on-investment.
A number of regulatory requirements can best
be accomplished through business integration. For example,
revenue recognition across a company is an important
process that must be certified. Companies can document
the process, then manage it after the fact, using end-of-month
or quarter reports to fix problems long after they have
occurred, or they can implement business process integration
to automate, monitor and manage critical business processes
in real-time. The finance industry has been moving toward
reducing the amount of time it takes to settle a trade
to one day. Long settlement cycles make risk management
much more difficult for portfolio managers, and cause
reporting discrepancies requiring extensive reconciliation
procedures.
SMEs and large organisations are dealing with many of
the same issues; however, SMEs by necessity are doing
so with far fewer resources. Many are looking to integration
projects to reduce costs and improve business processes,
while also providing ever better service to their customers.
Typically, there is more than one solution to any given
problem - the challenge is to know which one is optimum
and feasible.
There are two aspects to integration - the business
and the technical. SMEs recognize (or should recognize!)
the real difficulties presented by the need to deploy
complex and rapidly advancing integration technology
with limited technical skills, and the increasing requirement
to show a real, rapid return on investment (ROI) to
the business in order to get Board approval for IT investments
in today's economic climate. The emphasis should be
on identifying the areas of the business which could
benefit from integration, and to seek appropriate solutions.
This
Guide is not intended to be a reference manual on the
technologies involved in systems integration - this
is best left to the service providers. Instead, what
is seeks to do is to give business managers, who may
have to deal with integration specialists or to make
decisions about integration projects, an introduction
to the concepts, trade-offs and jargon involved.
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