System integration can resolve modern business challenges by placing a variety of information subsystems into a unified application mesh; it can make a supply chain more efficient, operations smoother, and enable faster vendor communication. If you want to sharpen your competitive advantage, you need system integration.
In 2020, integration solutions have become invaluable business investments, with the system integration market expected to go from $234 billion in 2015 to $530 billion by 2025.
System integration can help fix these issues by placing a variety of information subsystems into a unified application mesh; it can make a supply chain more efficient, operations smoother, and enable faster vendor communication.
For your business to reap the full benefits of system integration, you must select the right type for the use cases that you expect to encounter. System integration approaches are defined by how their subsystems communicate with each other. In particular, there are three that cover most of the common implementations.
1. Vertical Integration
The vertical integration method ties together the systems necessary to serve a more comprehensive set of processes within that vertical. In this context, the term ‘vertical’ is an industry or department, for instance: accounting, payroll or marketing.
Vertical integration creates silos of functionality, relevant to a chosen vertical, which are formed by the composition of unrelated subsystems. These unrelated subsystems might have previously operated as stand-alone tools that served a specific function (and generated data) but did not share information optimally. After integrating, these tools can quickly share, update, and maintain critical data. Vertical integration leverages these separate subsystems to serve their part of a complete process within a vertical.
This concept meets the needs of the industry or department well but generally does not expand beyond that vertical, because the implementation of vertical integration is focused on the specific tools required to serve that vertical. The simplest way to explain this is when a marketing department implements its own marketing automation system. In many cases, the solution works for their campaigns very well. However, due to the data and functionality operating as a separate environment from the rest of the business (most likely a cloud-based service), the ability for that unified system to share information with other systems (outside of the marketing communications use case) is not simple. This is where the term ‘silo’ comes into play since the system is tightly integrated to serve a specific and narrowly defined business function.
Hence, with many different departments in an organisation, the vertical approach may improve one department, but provide no future advantage to the overall efficiencies of the business. Vertical integrations are often found being implemented outside of IT department oversight (otherwise known as Shadow IT), due to an immediate requirement needing to be met (or due to lack of budget to implement a holistic solution).
Vertical integrations have their advantages, as they can be cheap and fast to implement, leading to quick improvements in operational functions and costs. The main disadvantage is lack of scalability because new, cross-departmental functions (between verticals) often cannot be created without considerable effort. Weighing up the options, we only recommend using this type of integration if the need for ‘time to market’ outweighs future scalability.
Horizontal integration is a concept that facilitates communication across the subsystems of any vertical. It is more of a holistic approach to integration, as it is intended for reuse of components (reuse of both the services and the data generated by them).
Using an ESB (enterprise service bus) has been the common approach to horizontal integrations for decades now, with most ESBs allowing you to handle message exchanges, the transformation of data types, common data formats (CDF) and various cleansing (data washing) processes together. You can extend the functionality by implementing electronic data exchange/interchange (EDI), CDF and application connectors for data integration across multiple systems and verticals. The various methods for which new connectors can be built (to on-premise or SaaS systems) fits nicely with the ever-growing SaaS landscape.
The modern generation of horizontal integration tools are called iPaaS, and they commonly integrate using APIs and event-based triggers (webhooks). The horizontal integration approach is much more focused on making processes and data more easily accessible by any system (whether that be for internal department or external parties), which is where it clearly differentiates from the vertical integration approach.
An advantage of a horizontal integration approach is that it’s a general focus (as opposed to a purpose-built solution) is useful if your business is looking for an incremental approach to system integration, which is better when you do not have all the requirements immediately.
The main disadvantage of horizontal integration is that it requires a greater level of analysis and design up-front to ensure future flexibility.
Horizontal integration is the approach that most businesses should be aiming for when considering their integration needs, as it aligns with the concepts of agility and transformation. It is what most people think of when attempting to implement ‘future proof’. However, due to the time and costs associated with ‘future proofing’ an integration, many integration projects that start out with the intention of being horizontal, end up being something more fit for immediate purpose (such as star integrations).
Star integration, sometimes called ‘spaghetti integration’, is characterised by the point-to-point nature of its implementation. The points connect the necessary subsystems, resembling a star. This is great for technology teams who need the ability to design and test many different solutions independently of each other but can be a poor choice if your business and requirements are evolving. Here is why:
Star integration can be both the simplest and the most complicated way to integrate. Each point of integration within this approach is generally made in isolation of (and with little regard for) any other point. The time needed for a simple star integration will be quick, as it is designed and built for a purpose (in other words, the fastest route between two systems is a straight line).
However, the more systems that are added, the harder it becomes to manage and, because reuse is not a key objective, it will take longer and longer as the points on the star increase. The problems that frequently occur with a star integration as it grows are:
In summary, star integration may be the preferred choice if you require:
Star integrations can be necessary because no other method matches this level of autonomy (such as when each department is responsible for managing their own integrations). However, the increased flexibility of each integration point comes at the cost of decreased oversight, decreased component reuse and an inability to pivot if transformation becomes necessary.
The goal of any successful systems integration project should revolve around optimising workflows, with increased productivity or capability. Side benefits such as reduced operational costs and faster information transactions may also align with your business goals too. However, it is important to first understand what your stakeholders want to achieve - what is their definition of success? There is no point focusing on delivering a fast solution if it is not relevant to the business. So, the first thing you must do is establish the business' direction. You need to understand the strategy of the business for the next three to five years. This will influence the flexibility and agility you put into your integration approach.
The first three questions you need to ask is:
The above question will not only identify possible key issues, but it will also (hopefully) identify those people who really understand the business rules that are required to govern information flows between systems.
The final question worth asking is:
They may not know the answer to that last question immediately. However, keeping that question in mind will allow you to assess each need or requirement put forward. The point behind this question is simple: sometimes the loudest voice in the room isn’t necessarily the most important voice of the business.
On many occasions, we’ve found that hours can be wasted on a particular problem that, if resolved, benefits no one but the person raising it and doesn’t actually address business strategy or operational improvement. In this situation, it needs to be put back to the business stakeholders to ask this last question against each potential integration point identified and agree or disagree as to its validity.
Once you have got answers to the questions above (and it generally does take more than one conversation with each stakeholder), then you should be able to overlay the requirements with the three integration methods listed here. If you have collected enough information, it usually becomes obvious as to which method is most appropriate.
Hopefully, this information gives you a good starting point on your integration journey. Predicting the future is very hard, so flexibility can go a long way in the systems integration process. A scalable, adaptable set of integrations can be key to successful technology infrastructure.
With over twenty years of experience and knowledge in various technologies, languages and platforms, we can help you choose the right system integration type for your business. No matter your tech needs - product information, marketing content, e-commerce or B2B data - we can evaluate your landscape and develop the simple or complex integrations that you need.
To learn more about our capabilities and our solutions, please visit our Integration Services page and get in touch.