Technology develops fast and the time when it paid off to build large central systems that solved everything is over. Of course, the dream scenario is to have one single system that can handle all of a company's needs, but in most cases this is little more than just that, a dream. No one is the best at everything and the same goes for ERP systems.
Instead, the trend is towards increasingly specialized systems, which focus on solving a certain part of the business really well. Does this mean that you have to work in lots of different systems in the future to be able to use the latest technology? Of course not - let's introduce a slightly magical solution to all your IT problems – system integration.
Historically, many companies have purchased and implemented larger systems "off-the-shelf", in the belief that this particular system will be able to cover all their needs. When a company then started using the system, they often discovered that it could not actually solve everything. This is the start of what can be a long and difficult adaptation journey, where you start to build tailor-made adaptations in a large system. Some companies adapt moderately, others go all-in and adapt like crazy. In the end, some unlucky organizations find that they have painted themselves into a corner with all the adaptations, unable to upgrade to new versions of the system. In the end, organizations can get stuck with a system that works worse than if it had let go of all the adjustments, and getting out of the system can then be both costly and time consuming.
Few companies have succeeded in covering their needs in, for example, HR, finance and sales all within a single system. Many different standard systems such as ERP, CRM and intranet often have to be taken into account. In today's digital landscape, system development is instead moving towards companies using several smaller systems that specialize in solving their own specific part of the business to a much higher standard.
System integration means that several independent systems are connected in order to work together. The systems are usually cloud-based, with an open API that enables integration with other systems.
To implement a system integration, two things need to be in place:
System integration is a bit like solving a puzzle, where many different pieces are put together to create a well-functioning whole. Just as there are different degrees of difficulty in puzzles, there are different levels of complexity in terms of system integration, which depends both on the systems that are being connected, and how complex the organization's business processes are. Although it may take some work to solve the system integration puzzle, it is, in most cases, a puzzle worth putting together.
By integrating different systems that are best in their part of the process, your business can become more flexible and scalable.
Some further benefits of system integration could include:
With integrated systems, you get a solution that is easy to use and which means that an entry made in one system has an impact on other relevant systems, and avoids you having to enter the same information in several places. You then reduce the time spent on administration, and also reduce the risk of errors.
When your business systems are integrated with each other, you always have access to accurate and up-to-date data in real time. This means that you can always get the latest figures as a basis for making data-driven decisions in the organization.
Your employees can work more efficiently in an integrated and modern IT environment. When the systems are integrated, you can work strategically with further automation of repetitive or time-consuming tasks. This way, your employees can spend more time creating value for your business. Read more about automation here.
A modern IT solution is also a great advantage from a talent perspective. You can more easily attract and retain talent in your organization since you no longer run the risk of turning-off ambitious and creative employees by having them perform simple or overly repetitive tasks.
Simply put, system integration is an effective way to get more out of your IT investments.
A big advantage with today’s many small, specialized ERP systems on the market is that you can often integrate a new system into your existing software. As a result you do not have to spend both time and costs on totally changing systems.
How do we find out which part of the process needs a separate system?
A good rule of thumb here is to answer a few simple questions of your organization: Do you have many business rules that are not standard in your industry, or standard in general? Then it may be better to find smaller, specially adapted system solutions, or alternatively build your own platform, than to adapt your existing ERP system.
This requires a great deal of knowledge about the process in question. Before you choose a system supplier, you need to know that the system will actually be able to deliver the solution you need. Contact a product expert at the system supplier who can guide you through the functionality and who can guarantee that the product suits your needs.
An important step is to make a proper mapping of your business processes. A broken process that is automated is still a broken process. When you have a good foundation to stand on in terms of what needs you have and what an optimal process flow would look like, you can quickly move forward and implement a well-thought-out solution that lasts over time.
Feel free to have a look at our guide about business process mapping.
System integration is crucial to get the most out of your digitalization work. Even if you are already working with several different specialized systems, a lot is lost if the systems fail to properly communicate with each other. A single place for your data also gives you better opportunities to regularly measure, analyze and improve your processes.
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