What Are the 3 Types of System Integration?
System integration is core to any small, medium, to large business. Even small businesses operate with multiple sources of data – such as paper invoices, retail reciepts, payslip documents, and tax compliance information. Larger businesses often utilise several different types of software to cover their business needs, some outdated legacy systems that may not communicate with modern software.
Different systems require different integration methods – a one size fits all solution just isn’t available. Your business functions best with customised integration software – the right tool for the job.
So, what are the three types of system integration, and which one will best serve your business?
What is system integration?
System integration is the compiling and connecting of data from multiple systems to provide a central point for all the data relevant to running your business. Simply put, it’s bringing everything from back-end software, inventory management, human resources, CRM systems, or even to business-to-business communications all together in one place so a business can run more efficiently.
Good systems integration can elevate your data flow, make your work significantly more efficient, and open the door to better software in your business, such as combining legacy and modern software. Data integration can make communication more efficient internally and externally; it reduces operating costs, allows you to provide better service for your customers or clients, and enables you to make better decisions with advanced business insights.
Enterprise application integration (EAI)
One form of system integration is through enterprise applications – a type of horizontal integration that allows disconnected services to communicate. With an enterprise service bus, different systems such as payroll, accounts payable/receivable, supply chain management software, or many other applications can all be accessed from a central point with a single user interface.
EAI is often used to provide integration solutions to medium or large businesses with multiple degrees of customised software. Rather than manually managing different data sources, EAI allows a business to boost productivity by operating its core business functions from a common user interface layer.
Enterprise application integration software is generally built in two ways; a central hub and spoke model (also called star integration) where each program is connected to every other system in the enterprise or a central hub where specialised software collects data from other systems and organises it in a single location.
Data integration (DI)
Data integration, simply put, is a system integration process where information from multiple sources is compiled together. By compiling data from multiple sources and formats in a single location with a common data format, it becomes a lot more useful, and a business can achieve much more.
Useful insights from better data sharing can reduce operational costs, increase day-to-day operation efficiency, find redundancies, take advantage of interactive reporting, and make better business decisions.
Electronic document interchange (EDI)
For many businesses, especially small or medium-sized, paper or electronic documents are core to their operations. Where data communications can be managed with system integration methods like EAI, they may not service paper and electronic documents as easily. To facilitate communication between businesses, such as invoices, reports, and other communications, an electronic document exchange is used.
Electronic data exchange is generally a back-end software that allows systems to communicate through PDFs or other file types, providing security and efficiency in communication. Legacy systems and more modern systems can be used together, allowing businesses that run on different software to communicate.
Finding the right system integrator
As much as systems integration is often a huge advantage for businesses, not every type will suit every business.
There are some pitfalls to be aware of, such as;
High initial cost: While costs are generally reduced over a long period, the cost to implement system integration is often steep with new software and cloud migration.
Higher security vulnerabilities: Stockpiling data in a single location creates a more attractive target for bad actors, and can cause a large security concern. While data is less useful when it isn’t compiled, it is often safer.
Complicated maintenance: Regardless of your system integration method, maintaining and updating your software is at least slightly more complicated when integration software is used. This can require more work for IT staff, or outsourcing of some maintenance duties.
These concerns should always be considered when deciding on system integrators, but the benefits to your business can easily outweigh the additional responsibilities.
To find the right integration project for your business, talk to Digitize and see what we can do for you.