An organization's ability to grow and compete in today's competitive environment is directly proportional to their integration ability, specifically systems integration. The pursuit of an integrated system is no longer optional for any business, in good times or bad.
An effective integration strategy is key to making multiple units work together to improve performance, increase efficiency and capacity, lower cost, and discover unique opportunities that only appear when you look across business functions.
The 21st-century has been appropriately named the integration century. Soon, every single business — from the major conglomerate in varying industries to the small-local business — will need to integrate their systems and data if they want to successfully overcome the challenges of tighter profit margins, increased governmental regulations, and the demand for customization and personalization.
Right now, certain organizations like CPG manufacturers are facing the most pressure to integrate their systems. No other industry is experiencing the shrinking operating margins, tighter regulations, and the demand for better data granularity like the CPG manufacturing industry.
The only solution to this growing problem is through better systems and better data, which can be achieved through better systems integration. With better integration, we can create better processes, make better decisions, and create an entire autonomous industry.
In this article, we're going to discuss a few integration processes, make the case for systems integration and why you should adopt it sooner rather than later, and look at some tips to improve your ability to integrate your systems.
The Case for Better Systems Integration
Organizations have to find new ways to integrate their systems because a vertical integration process that creates silos isn't going to work. It doesn't offer the scalability or flexibility that is needed to overcome today's challenges.
There are a lot of market forces that are driving the need for better systems integration:
● Increased Competition: It is becoming difficult to compete. There is more competition which is driving organizations to become more efficient and seek new ways to reduce their costs. This means, leaner supply chains or cheaper packaging of products. ● Shorter Product Life-Cycles: The Model-T was a great competitive product for years. Now, you're lucky if a personal computer is state of the art for more than a year. The iPhone is update frequently and a new version is launched every single year. As a result, manufacturing success is about time-to-market and new product introduction capabilities. ● Faster Product Development: Related to product life-cycles is faster product development. Companies need to reduce their development time if they want to remain competitive. Early product introductions are often rewarded with a large market share and a high volume. ● Globalization and Customization: Any organization now has the potential to be your competition and consumers are demanding a personalized experience. Mass customization is the new mantra. ● High and Natural Quality: Consumers want high-quality products at affordable rates that are also good for the environment. This is not an easy feat to accomplish. Affordability and good for the environment don't always go hand-in-hand. Government environmental regulations often makes manufacturing much more expensive.
This isn't new. Organizations have known this for the last decade. Many organizations have tried to find solutions, but the work involved is sometimes a huge challenge because integration is an unnatural act for most large organizations.
Throughout the years, businesses have been better at local operations optimization than at integrating them for the company's prosperity, and for customers' satisfaction. The status quo is a strong force that repels integration. The larger the organization, the stronger the status quo.
Systems Integration Benefits
Systems integration won't give you a fix-all to all of the problems your organization faces. However, your organization stands a much better chance at being able to address these problems when your systems are integrated than if they weren't integrated.
For example, manufacturers can integrate their ERP with systems that track work time, workplace accidents involving materials, sick-leave documentation, and the status of a machine's components.
All of this could help you to get the most productivity out of your employees while keeping them safe and costs down. You can learn where to assign or reallocate resources so that you're focusing on the most dollar productive activities.
With an effective systems integration strategy your organization will become more scalable, gain the ability to recognize and respond to opportunities and threats more quickly, address shifts in the market, and correct supply chain disruptions. Streamlining your systems will make your business more profitable and smoother.
Tips For Successful Integration
Here are three tips for a successful systems integration:
1. Get the Right People On Board Sometimes the largest siloes are built because of an organization's culture, not their information architecture.
For a systems integration project to be successful, an organization will need to get the right people on board and have champions in the business that can advocate for the benefits of systems integration.
2. Focus on Quick Wins Integration projects are wide-ranging, complex, and often require months of focus. Before your organization invest a significant amount of money and time in a project, get a quick win that will validate and demonstrate value.
A project has a greater chance of success if you can break it down into a series of small steps.
3. Justify the Costs Regardless of whether you're trying to integrate internal or external systems, integration can be expensive, but the project shouldn't be considered costs because of the benefits. While, external systems integration will require you to justify the cost of further support and technical issues, a lot can still be gained.
A lot of organizations are quick to see IT as an expenses rather than a direct-investment, like marketing, that can impact the bottom line. Estimate your benefits, then determine if the benefits are greater than the cost. If so, investments should be made.
When your systems are integrated, you'll be able to receive real-time data to improve your business processes. This could be beneficial for businesses in the retail industry. They could make specific offers based on a customer's location.
Integration is becoming a must-have for every organization, regardless of size and industry. But integration comes unnatural for most organizations. For years, a majority of organizations have built siloes and optimized at the local level.
However, businesses that can integrate their systems will be able to improve their performance, increase capacity, and discover unique opportunities that only appear when you look across business functions.
You can make your next project a success by making sure to get the right people on board, focus on quick wins, and justifying the costs.
If you need help integrating your systems, get in touch with us today.