What is System Integration?

System Integration is essential for both business-to-business communication and internal cooperation within a company. But what does System Integration mean and why is it the basis of business innovation?

By the term System Integration we mean the process of connecting different subsystems, also called components, into one larger system to make everything work in unison. From an IT architecture perspective, System Integration is the process of linking various IT software and services with the aim of creating cohesion in work process management.

The benefits of System Integration

Those who choose to use a systems integration approach aim to improve the efficiency, productivity, and quality of their processes. To achieve this, it is necessary to have the various IT systems talk to each other in the background, so as to avoid the time and effort spent manually sharing information with other departments, including top management. Through IS, the organization will experience increased speed of information flow and reduced operational costs.

In addition to improving internal processes through communication, System Integration connects the organization with third parties, each of which has specific interests: we are talking about suppliers, customers, and shareholders. With IS, suppliers keep track of raw material availability, customers of finished goods inventories, and shareholders focus on the company’s position in real time through a dedicated dashboard.

Types of System Integration

1. Point to point

This first type of integration connects only two system components and for some cannot be defined as true System Integration. In any case, despite the limited complexity of the functions that can be performed, these two systems connect to work synergistically. Many cloud-based applications offer this as an “out of the box” integration module for common IT systems.

2. Vertical

Vertical integration involves integrating system components (subsystems) by creating functional “silos,” starting from the basic function upward.

This leads to a “silo”-like structure: the bottom is the most basic function, and the rest gradually becomes more complex.

Vertical integration is simple but inflexible; should one wish to add a new feature, it would be necessary to insert another “silo.” Take the example of the POS, which tracks orders and records transactions. Another software takes care of generating invoices. The system is tightly integrated to serve a specific, defined business function, keeping data in one location without coordinating with other silos.

3. Star

Star integration is a system in which each subsystem is connected with other subsystems using point-to-point connections. In other words, a larger set of simple connections come together to create a star connection. The greater the number of connected subsystems, the greater the starting points and thus the intermediate lines.

This allows for more functionality, but as the number of integrated systems increases, so does the number of integrations, and managing integrations becomes very challenging.

4. Horizontal

In horizontal integration, a separate subsystem is used as a common interface layer between all subsystems. The number of connections required for system integration is reduced because the subsystems are not interconnected directly; they are connected indirectly through the main system. The advantage of this method is also that each subsystem can be modified or even replaced without having to rethink the interfaces of other systems.

Who to turn to in order to start a System Integration process?

To refine one’s processes for digital transformation, System Integration is critical for its ability to create synergies, simplify systems and improve internal and external business communication. If you would like to receive more information, please contact the F1 Consulting & Services team.

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