Benefits & Limitations of Systems Integration
Based on what we were taught systems integration and business informatics is basically the link of people, tasks, technology and organisational structure to form a constant “whole” in order to measure the impact of boundaries between functional areas, processes
and departments that are created from the section of labor and specialisation ( Leavitt 1965; Bostrom and Heinen 1977 ). In order for systems integration to be successful, organisations have to focus both on the human or logical level and on the physical or systems level (Leavitt 1965; Bostrom and Heinen 1977).
When a system is integrated into and organisation it offers many advantages, but we should always have in mind that integration also comes with limitations. A very important goal for an enterprise is to see the profits rising and to continuously develop, a goal that the organisation can accomplish through the system integration as it offers continuous augmentation to the revenue and growth. System integration also offers enhanced information visibility. That means that it improves the process of sharing crucial data needed to manage the flow of products, information and services between the suppliers and the customers. Furthermore through integration we have another key feature, standardised data. It is important to transform data in similar format in order to make them comparable. Some last main advantages that are need to be mentioned is the better business practices and the improved competitive environment it creates with competitors.
As we mentioned above it is important to not forget that system integration comes with limitations. With limitations we mean those characteristics that influence the interpretation of the results. Some of the limitations an organisation is facing when the implementation is done is : 1. The high costs that are needed to first setup the system
2. The benefit/return on the investment (ROI) takes a lot of time to give satisfying results
3. It can lead to power and inter-departmental conflicts due to the sharing of information
4. Restrictions to creativity and independence
Role of ERP, SCM and CRM in Systems Integration
Enterprise Resource Planning (ERP) systems are integrated, multi- module application software packages designed to serve and support several business functions across an organisation ( Introduction to integrated information systems; Prof. Dr. Christoph Rosenkranz ). ERP offers an integrated software solution to all the functional processes in an organisation. ERP systems has a significant importance in systems integration, because it helps the organisation to not only concentrate on one single function, but to also take in consideration business processes and practices. Business processes are improved and become more stable, in a way that implementation of best practices will occur. It also promotes cooperation between different departments.
Next is the Supply Chain Management (SCM) systems, which is the network of services, material, and information flow that link a firm’s customer relations, order fulfilment, and supplier relations processes to those of its suppliers and customers ( SCM systems; Prof. Dr. Christoph Rosenkranz ). Supply Chain Management (SCM) also plays a critical role to systems integration, as it focuses on customer needs and sets as priority company in the centre, implementing the suppliers, distributors and customers as a whole. With cooperation and systematical integration, the organisation can effectively enhance the operation level of enterprises, limit costs and improve customer’s service level.
Last we should include the CRM system, which is also very important to integration. Customer Relationship Management (CRM) is a system that provides information about developing and managing business processes with customers and potential customers, and exists to assist in understanding what the customers want and need. As CRM provides support for sales, marketing and customer service, it can gather customer information form various channels, with a main purpose to improve the front-end customer facing functionality, to analyse profitability and to allow atomicity in marketing measures.
Systems integration and business processes
The definition of business process depends on how a person sees it, it’s a conception. In our course the definition we used was that business process is a sequel or network of activities for completing a task. Because of the rise of e-business, the need for automated business processes and improvement was created. Information technology came in to support business processes in order to increase the efficiency and to transform the way processes were done. Systems integration often is seemed as a tool for business processes, which allows users to do the integrated processes without difficulties. Integration is also a necessity when it comes to automating business process.
Systems integration is tightly combined with business processes capabilities. That’s mainly cause systems integration can connect the transactions in a business service, centralise business processes and moderate duplicated data in order to increase business performance.
Furthermore without system integration an environment of data, that are not organised, is created. Some processes must be done manually, which may result to inefficiency and delays. But when the data are unified than every process can be done in real time, leading an organisation to operate at its highest potential
In general system integration allows business processes to perform in the highest possible level, which that leads to not only increase efficiency and productivity, but also improve quality and customer satisfaction.
Challenges during the lifecycle phases of enterprise applications and how to deal with them
Life cycle is a series of different stages of development. In our case its the steps an enterprise system takes from the moment of acquirement to when the system is extended. The life cycle of our ES consists of 4 stages (adapted from Shao et al, 2012):
First we will start by writing about the ERP system challenges and how an organisation can deal with them. The traditional ERP life cycle completes one stage at a time and requires formal milestone approvals prior to moving to the next stage (ERP systems; Chapter 3).
At the phase of the adoption challenges may influence the decision of an enterprise to adopt an enterprise system. This includes alternatives to ERP systems and predictive models for the success and time taken for the implementation procedure (Rebekah Eden
;Sustaining the momentum).
During the implementation stage it is observed that the organisation have to deal with organisational and knowledge management issues. Based on Eden research organisational issues include communication and power shifts. Furthermore it is a challenge to handle knowledge transfer to all of the organisation during the ERP implementation.
In order for the implementation to be successful is to use an already proven methodology. Using a proven methodology we can minimise the risk that come along with ERP implementation.
To continue with CRM, implementing such a system can be difficult, because there are parts of CRM operations distributed across different business areas. Also occasionally CRM systems are experiencing downtime. Even more the data must be synchronised and spread. To be more specific through the continuous change of customers the data must be synchronised and outputs must be propagated into individual department systems.
We can partly manage to deal with this problem implementing CRM over ERP, but only if the implementation of ERP was successful.
The challenges for SCM doesn’t differ so much from ERP and CRM. Especially in the implementation stage, which is a really tough task, because its partner in the supply chain may have different software and hardware (SCM systems; Prof. Dr. Christoph Rosenkranz).
We must mention that top management plays a significant role throughout the whole process. With the right guidance and their inputs they can be a beneficial factor for the implementation. Top management not only is needed in the implementation phase, but also in the assimilation, where the support is crucial for accommodating system functionalities that can be found in the business processes and activities (Ragu-Nathan et al, 2004; Tarafdar & Vaidya, 2006).
Success is relative and can not always been taken for granted. Nevertheless in the Shao et al empirical research (2012) some success measures have been suggested for each phase.
For the phase of the adoption the organisation should select the most appropriate enterprise system and to allocate resources efficiently. Even more it should make clear the operational and strategic goals, making sure everyone agrees to follow them, and also have a real vision of ES articulated.
In the phase of implementation, a very important stage, a company should take under consideration, is that a project must be completed under time and with no extra costs. Moreover the most well planned modules and operations must be integrated and alternate to business users. Also no disruption in business functions must be caused during the implementation.
Regarding the phase of assimilation which comes after implementation, the organisation should make sure that the enterprise system ,that is used, can be used as support for routine business operations, operational and strategic decision making. Except assuring that the enterprise system work as a supporting tool, the individual and organisational earnings of ES are established in practice.
The last phase as mentioned in Shao’s research is Extension. In this phase he makes clear that in order for the organisation to succeed, the following measures should be adopted.
First it needs a distinct supportive strategy from top management and also continuous exertion, so that a connection can be achieved between business partners and business processes and information systems. Moreover management should try and understand the competitive features coming from the inter-organisational systems, and sharing of data in real-time with partners.
Future technology trends and enterprises applications
Over the next few years technology is expected to change the way that enterprise applications are viewed. It will shake the beliefs of owning and valuing a core enterprise application. The arrival and multiplication of these trends, referred also as digital platforms, have already added some critical advantages to the companies, such as flexibility easy-to-deploy and cost effective IT solutions (S. Vodanovich, D. Sundaram, M. Myers, Digital natives and ubiquitous informa- tion systems, Inf. Syst. Res. 21 (4), 2010, pp. 711–723.) .Some of the future technological trends, that have already made an appearance, are cloud computing and internet of things (IoT).
Cloud computing is a technology which allows omnipresent access to shared data of system resources and services that can be easily managed through the internet. Third-party clouds offers a complete focus on core businesses for organisations without needing computer expenses. Cloud computing can offer plenty of benefits to an organisation, such as elasticity when demand and computer needs scale up and down. Furthermore cloud enables organisations to easily transfer workloads manually or automatically, leading to cost reductions. Cloud computing can be private, public or hybrid.
To continue with, internet of things will also play a crucial role to the future. IoT is the network of physical objects—devices, vehicles, buildings and other items embedded with electronics, software, sensors, and network connectivity—that enables these objects to collect and exchange data (Enterprise systems; Chapter 1; Prof. Dr. Christoph Rosenkranz).
With IoT someone can control remotely objects though different networks, creating a connection between physical world and computer systems. This leads an organisation to minimise human interference and simultaneously to increase its efficiency, flexibility, accuracy and reduce unnecessary costs.
The point is, that these technology trends will be the reason for the change of role of enterprise applications. As long as tech will have a critical role in organisations, the need for adaption will be created, so that the businesses will continue to have an advantage. However there is a strong belief that Enterprise applications is now evolving to have also an important role.
Considering what will happen between enterprise applications and technology trends, or else digital platforms, we have two equally possible scenarios. First scenario is that enterprise applications and digital platforms can both exist and be codependent in a business process. Second scenario is that the enterprise applications will be replaced by the new tech trends. In both these scenarios unlike the enterprise systems, tech trends will offer benefits to the business processes, such as value and innovation. Such platforms are designed to offer organisations a unique opportunity for innovation, cause they are cheap, they adapt with no difficulty and they easily connect customer and suppliers (Sedera et al.; 2016). However the digital platforms except from offering many potential to the organisations, they can also create synergies enterprise applications. As constantly writing about the tech trends, we can understand that these platforms can be adopted and managed in individually, but when they are implemented and connected with a well suited enterprise system they can add value and benefit the organisation to the fullest potentials.
Although for a modern business an enterprise system is considered with high complexity, and that makes it unfit for an organisation that wants to stay on track with the technology trends. But according to the study results of Sedera et al (2016) enterprise systems are considered an important part of IT infrastructure, and thus making it an important part for an organisation.
So someone can come to the conclusion that the appearance of these new tech trends doesn’t necessarily signifies the extinction of enterprise applications, but instead if an organisation want to engage, synergise, replace and add value (Sedera et al; 2016) to an outdated enterprise application it can combine them. In that way a company can take advantage of the potentials of the combination and gain innovation.