Why do Businesses need Data Integration?

Please note: This post originally appeared on Extol.com (EXTOL has been acquired by Cleo).

When we talk about data Integration with someone who is unfamiliar, the discussion often raises many questions.

Why does it matter? What are the benefits, and the risks? How much of a problem is this?

Here are some answers to those Integration questions.

First, let’s think about the meta-types of challenges that businesses face today. Two flavors emerge quickly; problems of the moment (tactical) and visions of where they want to go (strategic). Tactical problems include the day-to-day challenges of exchanging/sharing data, both internally between systems and externally with customers, suppliers and regulatory agencies. Strategic challenges require much more consideration and have deeper impact to the organization, such as replacing an ERP system (e.g. moving from a legacy app to SAP) or changing the business model to adopt and leverage a new approach (e.g. sending EDI data over AS2 versus a traditional VAN to lower costs, or web-enabling external information such as Shipment Status via Web Services to improve customer self-service).

Why we integrate is pretty straightforward. There has to be some advantage and cost-justification to undertake the project(s). External pressure from key customers has been a common driver that causes an organization to start Integration projects. B2Bi (Business to Business Integration) frequently begins with an EDI implementation. Companies soon realize that EDI can save them time and allow them to process more information, more reliably.

Once these benefits start to be realized, a champion usually rises up and connects the dots that the organization has islands of information that should be shared (or at least exposed). This event begins the exploration of A2A (Application Integration). Very quickly, an integration team begins to notice curious things about their corporate data; the various isolated islands of information all contain their own version of common data – there isn’t “One Version of the Truth” but rather several versions. This could be as simple as customer contact information where one system is updated (CRM), yet another system (Maintenance Agreements) might not know that a person has left the employment of a customer. Lets think a little deeper and imagine that when a change occurs in a CRM system (edit contact information), that event triggers a series of events to update all affected systems with the new information. It’s a pretty simple idea, but one that has been ignored as systems have evolved within the organization.

Fortunately, integration tools can now help us with these problems. Every company, that hasn’t embarked on integration, has these types of problems (external and internal)…don’t let anyone tell you otherwise. This is where integration can be leveraged to help the organization extend their business reach (B2B) and keep the internal data fresh and consistent (A2A).

Integration can also play the role of utility worker, especially in ERP migrations. The integration tools available today are perfectly suited to transform data from one format to another. Isn’t that what is really taking place during an ERP migration project? Data exists in the legacy system and needs to be moved into the new system, prior to cut-over. A team could sit and write tons of hand-coded programs to move the data, but it makes more sense to leverage a transformation tool to “map” the data.

Finally, a very strategic use of Integration is in exposing data so your company can interact with its business partners (e.g. customers, suppliers) in an automated way reducing processing costs and turnaround processing time. Not many CFOs would turn down ways to make the company easier to do business with, increasing processing capacity and, at the same time, lowering the cost of doing business. In business, the need to reduce cycle-time and improve data accuracy exists throughout all facets of the organization.

Did you figure out yet that we’re big on Integration? We have seen many companies plagued with these problems. Some realize it and some don’t. The good news is that it’s something we can fix with available tools and technology.

So…go forth; be the champion that identifies the issues that Integration would solve in your organization, find the tools to resolve the challenges and make it happen!