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Everything you need to know about System Integration

In this article, we'll explain what system integration is, how it has traditionally been implemented, the obstacles it faces and how an integration platform with hybrid capabilities can assist businesses in developing and deploying integrations between their systems.

What is system integration?

To put it simply, system integration means connecting different systems or tools into a single, extensive system that functions as one. When it comes to software, system integration is often defined as the process of connecting disparate IT systems, services, and/or software to make them all operate together smoothly.

The purpose for doing this is to enable various tools to be used for different purposes since the tools are usually designed to fit only a few different purposes. In the past, the only way to achieve the same result was to build massive monolithic applications to cover all functionalities. This approach has been proven to be extremely complex and expensive – not to mention not being a good fit for any of the functionalities that the tool aims to have. 

System integration also connects the company to third parties like suppliers, consumers, and shareholders – each of whom has a distinct interest in the data generated by your organization. It means that suppliers can track raw material levels, buyers may keep track of completed goods inventories, and shareholders can see the company's status at a glance in real-time on a dashboard. All of these requirements may be easily met with the help of system integration from a reputable systems integrator.

Why do you need system integration?

As mentioned before, there isn't a single tool to cover all functions of your organization, meaning that these different functions will always have to adopt their own tools. The smooth integration between these tools is essential for seamless collaboration. In the digital transformation era, it could also be the single most important thing in making your organization work together as one.

The primary motivation for businesses to adopt system integration is to increase efficiency and improve the quality of their operations. The businesses need their multiple IT systems to "speak to each other," speeding up information flows and lowering operating expenses. However, system integration isn't just for connecting an organization's internal systems; it's also for connecting the organization's external partners.

B2B integration is the process of integrating, automating, and optimizing business operations that exist outside of a company's firewall. While these processes may differ significantly, they all have one thing in common: the integration of such external B2B processes provides the company with a long-term competitive edge. Real-time visibility, enhanced automation, inventory optimization, and improved customer satisfaction are examples of such gained benefits.

Businesses have realized that having robust software solutions is insufficient. They may have the most feature-rich software applications behind their firewall – or in the cloud – but they cannot successfully manage their end-to-end supply chain process without suitable B2B connection and accompanying capabilities.

While B2B Integration originated with major organizations demanding ways for receiving business information, it swiftly developed into the adoption of Electronic Data Interchange (EDI) standards – and then to other newer standards like XML, JSON, and others. Nowadays, it appears that every new application includes an API that allows it to be integrated with other applications. Still, the problem of actually integrating such APIs with other systems remains, and most businesses simply do not know how to do it.

The common challenges of system integration

ONEiO’s Integration 2020 report (available to download for free here) surveyed IT leaders and found that the 5 most common challenges of system integration are its cost, the time it takes, lack of experience, and the needed buy-in from management. Here are the most common barriers of integrating systems explained:

Cost of consulting and implementation

System integration is often treated as a project. When external system integrators approach you with an estimate for the cost of building an integration, it’s commonly structured to contain line items for several hours of research, more hours for consultation, and followed up with another batch of hours for actual development time. This easily amounts to over 50,000$ to complete a project and you’re paying half of it upfront without seeing any results.

How you can avoid these costly projects is to select a vendor whose tools are easier to use (requiring less expensive consultants) and select an integration service provider who can provide system integrations that don’t require ongoing consulting engagements.

The time it takes to build new integrations

System integrations require two types of knowledge to be successful; technical and business. If the system integration is developed by someone who does not have the necessary understanding of the technology involved, i.e. the standards and interfaces the systems can be communicated with and how to use the tools for building the integration, it can take time to build the integration. The correct level of business understanding is also a crucial determining factor for how long it will take to build an integration. If the tools being used require a more technically skilled user, this user may not have the level of business understanding. This leads to the need to translate requirements from business to technical requirements and adds to the time it takes to build integrations.

To reduce the time it takes to build new integrations, you can work with a modern integration automation platform. These platforms automate many of the operations required to build an integration. Pre-configured endpoints communicate with the APIs and tools so that the only thing you need to know is the URL and credentials to access your system. All that is left for you to configure is the business logic that is applied between the various systems.

Cost of tools and products

Most of the costs of integration projects arise from the need for hiring in-house integration expertise to manage the projects or hiring external consultants to assist. There is, however, a significant cost associated with the tools and products used to build the integrations. For iPaaS tools that cover everything from configuring and managing your APIs to master data management, you can end up with a big price tag. That type of upfront cost is immense for the value you are able to receive from the start.

When looking for the tools and products to use for your system integrations, see that you carefully estimate what your current needs are and whether you will really need all of the additional features the iPaaS providers have managed to include in their product.

Lack of experience and expertise

System integrations require three sets of skills to be able to successfully complete a project. As it is a project, the first thing you would need is someone who is able to manage the project successfully. They will need to see the bigger picture and be able to handle any obstacles that may be faced during the project. Secondly, sufficient business understanding is needed to be able to say what truly is a necessary part of the project and what is the outcome you hope to achieve at the end. The third essential skill is the ability to understand the technical components related to integrating systems. Knowing what is possible through a systems API, especially when API documentation is not easy to decipher or there simply isn’t sufficient documentation, needs some prior experience or the capability to figure things out through trial and error. Finding people who have sufficient skills in all aspects is extremely difficult and these people are very sought after. While it may be difficult to attract this talent to your organization, there are ways to alleviate the demand for deep experience in all areas.

While project management skills are easiest to develop out of the three, it’s also possible to work with integration service providers like ONEiO, who provide you with a tried and tested framework for how to run and maintain your integrations. For technical skills, new integration platforms reduce the need to understand the underlying technologies and allow employees who understand the business context well to configure integrations on their own. The last skill, business understanding, is the one you cannot really outsource fully, but at least you can focus on finding the right people for your business instead of focusing on project management and integration development.

Buy-in from management

When a system integration project comes with a price tag in the tens of thousands, it’s harder to justify its cost vs. benefits and obtain the needed buy-in from management. As integrations are rarely an organization’s core business (unless you are an integration service provider), buy-in is challenging to obtain. Especially if the integrations are to be built for systems that are not business-critical for the organization, the benefits rarely outweigh the cost and resources required to successfully integrate your systems. By reducing the capital investment upfront and the ability to scale the cost according to your usage, you’re more likely to gain approval for a smaller upfront investment.

What are the types of system integration?

Various technical terms are used to describe different system integration methods: you may have heard of Horizontal integration, Vertical integration, Star integration, or Spaghetti integration before. However, these terms are pretty theoretical and bring little help to help you wrap your head around the topic.

Horizontal integration and vertical integration should not be confused with system integration (where you connect systems with one another). They are business strategies, not technology integrations. Horizontal integration is the practice of acquiring other businesses in the same value chain level, for example, Amazon purchasing another online retailer or Facebook buying Instagram to grow their business.

Vertical integration is the practice of acquiring another company or expanding organically at a different level of the value chain to own more of the total value produced. This includes acquiring suppliers and manufacturers – or setting up retail locations instead of being a distributor. A great example of vertical integration is Netflix. Netflix began as a streaming service but later realized that it would make perfect sense to start producing the content they wish to distribute.

Indeed, system integration is also part of businesses integrating with each other: it is actually one of the most common use cases for system integrations. By using system integration during mergers and acquisitions, your organization can further unify the practices of two organizations without the need to replace all of the systems in use.

In system integration, there are two different approaches; Point-to-point and Hub & Spoke.

Point-to-point integrations

Point-to-point describes a method where two systems or tools create a connection between themselves using the functionalities that the tools contain. The main characteristic of this is that the tools need to consider the functionalities – and more often, the lack of functionalities of the other system. This method is usually suitable for simple cases where there is no real need for profound intelligence in the data flow. When you have a lot of tools and too many point-to-point integrations, you end up in a complicated mess of spaghetti integration.

Because only two system components are involved, one could think that point-to-point integration (or point-to-point link) is not a genuine system integration. Even though it lacks the intricacy of "real" system integration, it does indeed integrate two systems to work together. Typically, this type of point-to-point integration handles one function and does not include any complicated business logic. These sorts of point-to-point connections are available as productized, "out of the box" integration modules for the most common IT systems in many cloud-based apps.

System integration - point to point integrations

Pros & cons of point-to-point integrations

The capacity of an IT team to swiftly develop a small-scale integrated system is one of the key advantages of point-to-point integration. However, the approach is difficult to scale, and managing all of the integrations becomes complex and heavy as the number of apps expands. For example, fifteen integrations are required in order to link six components. Consequently, if one of the systems is the central node in the integrations, the landscape starts to look like a star shape with lines connecting each of the systems. Once more lines connect each of the systems, the star shape suddenly turns into a messy diagram referred to as spaghetti integration.

When to utilize point-to-point integrations

This strategy is best for firms that don't have significant business logic and rely on a few software modules to operate. It's also a fitting choice for companies looking to connect to SaaS apps. However, you should be careful when choosing to do this, since when your business scales, you're much better off by changing to a hub & spoke approach and may need to reconsider how you integrate your tools.

Hub & Spoke integrations

Hub & Spoke approach is designed to address the problems running multiple point-to-point integrations in parallel. The spaghetti situation makes it difficult to maintain, and even the smallest change can unexpectedly impact some other integrations. A hub or ESB (Enterprise Service Bus) is placed in between the tools to avoid this. However, the ESBs and iPaaS products often consist of really low-level components. The need for development/scripting/coding results again in a set of integrations with the same characteristics as a point-to-point integration.

System integration - hub and spoke integrations

Pros and cons of hub & spoke integrations

Compared to point to point, the hub and spoke approach offers several advantages, including increased scalability. There are improvements in terms of security and design simplicity, as each system has just one connection to the central hub. However, the hub's concentration might be a flaw in such a setup. The whole infrastructure then relies on a single integration engine, which can quickly become a bottleneck as the workload grows.

When to utilize hub & spoke integrations

In e-commerce, financial operations, and payment processing, the hub-and-spoke architecture is frequently used as they all work with high-volume transactions. It is a preferred design for highly regulated businesses with considerable security threats. The reliance on a single hub also suggests that if you maintain your own platform, you will need to have significant technical resources and expertise available to scale the infrastructure as your needs and volumes grow.

How to run a system integration project

In order to succeed, you must increase productivity and improve your workflow. System integration is a great way to accomplish these goals. On the other side, the development process may be lengthy and complex. A systems integrator, which can mean a corporation, or a collection of individuals, ensures that data flows smoothly between all components.

Read more: Preparing for a system integration project? Start here

What is an example of system integration?

Let's go through an example of system integration using the two mentioned types of integration to illustrate how you might end up with integration spaghetti by going point-to-point and how a hub & spoke approach could combat these issues.
When processing payroll, these types of systems may need an integration and can quickly lead to spaghetti if the integrations are chained from one place to another.

Time reporting

In many countries, employees are required to report their working time due to legal reasons. If time reporting is not mandatory, then at least a way to indicate when employees are on paid time off or absent due to illness is often necessary. There are several possible ways of collecting this information. Usually, a specialized time reporting tool provides employees with an intuitive way to enter this information, for managers to approve any absences and to be able to report on this information on the organizational level.

Payroll

In order to pay employees correctly, a lot of the information collected should be transferred over to a payroll system. The payroll systems are specifically tailored to cater to the needs of payroll professionals and take into account the various bases needed to calculate salaries. Payroll systems will need to know when an employee has been absent and for what reason. For monthly paid employees, this information needs to be made available at least once each month. For employees who are paid on an hourly basis, the frequency is usually shorter and the importance of up-to-date time reporting data grows.

Accounting

As payroll needs available cash for the employees' salaries, there is a need to connect the payroll information over to the accounting system used by an organization. To better forecast how to account for the cash, it can be useful to receive future-looking information from the time reporting system before it is taken to the payroll system. Thus, you would need two integrations connecting your time reporting system and the payroll system to your accounting system.

ERP

Often the core system in a business, the enterprise resource planning system needs to connect to most of the other systems used in the organization to perform successfully. You may end up with integration from each of the systems to the ERP system. Many ERP systems are monoliths that handle many of the functions, but they are not the best of the breed. There is a need for other tools and an integration to the ERP. This is where the star pattern starts to form. The ERP system is in the middle, and the supplemental systems are integrated into it.

In these examples, each of these systems will also need an integration to one another. Then, add additional systems for handling banking, an HR system, a recruiting tool, a proper BI or reporting tool, and suddenly, you have built up a spiderweb, or spaghetti, of integrations between all of the systems. When you integrate these systems using a hub-and-spoke approach, only one integration is built towards the integration platform. The integration platform will then handle the routing between the systems and store the business logic for when and how the information needs to be moved between the systems.

IT

In IT services, there are also several systems in place to handle the monitoring of devices, keeping records of what devices/configurations of those devices exist, how incidents are raised for certain events found in monitoring, and ultimately how that information flows to a PSA system. This way, the end customer can be invoiced for the services provided. There are applications that can handle many of these functions, but then again, the problem of whether each function works the best way for your business persists.

Monitoring

A monitoring tool is used to detect whether either applications, servers and devices are performing as they should. They are often installed as small pieces of software on the monitored devices. The various tools are pinged periodically to obtain information about the device's latest status. It’s a vital part of knowing when things are going wrong or about to go wrong. The sooner any events that require action are relayed towards the right people that can fix them, the shorter the time it takes to repair those issues.

Read more about monitoring: Better alternative for LogicMonitor ServiceNow integration

CMDB

A CMDB, or configuration management database, contains information about the various hardware and software assets an organization uses. The CMDB is closely linked to monitoring. Ideally, these two systems should be integrated to be able to determine what devices the organization needs to be monitoring and how a certain configuration of that device affects its status. CMDB integrations can be used to populate this data from multiple different sources in order to maintain it as the single source of truth for all device configurations in an organization.

Ticketing

When the system used for monitoring detects that a device is not responding or a configuration needs to be adjusted, work items must be created in a ticketing system. A ticketing system or a more full-fledged ITSM tool allows for an organization to keep track of their work, who is performing the work, handle any approvals related to requests and maintain documentation related to how the work needs to be performed.

Integrations can be built between different ITSM or ticketing tools as these work items are often transferred between teams to be worked on, who may be working with systems that are better suited for their needs. Tickets can also go over organizational boundaries when parts of the work are being outsourced to another vendor. Conversely, if you are a service provider for IT services and you have multiple customers, an integration can help you to resolve work items without having to work with multiple ITSM tools or having to force your customers to utilize your tools.

PSA

A professional services automation (PSA) system can be described as the ERP system for professional services. A PSA system allows service providers to track their work regarding how many resources are used and forecast future resource needs. The tracked work can also be automatically invoiced and is often integrated with invoicing and accounting systems.

Similar to the example with systems used mainly in the administrative or HR function, connecting all of these systems to each other is the only way to operate a process end-to-end in a fully automated manner. If you were to connect each of these systems point to point, you end up with a similar spaghetti of integrations. The only sufficient solution is to use a hub in the middle of all of these systems and connect each of the systems to that one hub.

What is a system integrator?

A system integrator (SI) is a person or a company that assists clients in bridging disparate computer subsystems from various manufacturers and ensuring that they work together properly and efficiently. System integrators are responsible for designing, regulating, testing, and, in many cases, managing the infrastructure operations.

If you want to save both time and effort, using the services of system integrators may be the best fit for you. Instead of searching for vendors on your own, you can delegate the job to experts who already have the necessary contacts and know-how to handle system integration in your specific situation. The most beneficial aspect of using a system integrator is the knowledge and resources they provide – something clients often lack on an internal level.

As an integration service provider, ONEiO offers integration services directly and through its partners to either fully manage integrations from start to finish or assist in the configuration of integrations using the ONEiO Integration Automation Platform.

The advantage of ONEiO is that by working on its platform, you will not lock yourself into costly integration projects but actually reduce the time it takes to set up the integrations and the ability to configure and improve integrations on your own.

System integration with ONEiO

Here at ONEiO, we address the complexity of architecting, configuring, and operating integrations knowing that it takes a lot of expertise to fulfill the needs of the whole organization.  We are a cloud-native integration service provider that offers a 100% integration success guarantee. We can offer integrations as a turn-key solution, or you can decide to operate our cloud-native Integration Automation Platform on your own. Our customers have a choice in the approach they want to take. And along their journey with us, they always have the choice to do it themselves or allow us to help them get them going.

Read more about how we help you succeed: Our way to your success

System integration with ONEiO

ONEiO's Integration Automation Platform is designed to work on a hub-and-spoke basis. Your systems are connected to ONEiO as endpoints and can be utilized in all of the integrations between systems. Routing rules control the business logic between the systems handling the various conditions and transformations needed for the integration. 

Benefits of integrating your systems with ONEiO

Increase your productivity

Integrated systems enable centralized control of routine procedures, improving overall workflow efficiency. Employees can access all apps and data they require from a single entry point, allowing a corporation to complete more work in less time. With ONEiO you will also be able to increase your productivity in terms of the time it takes to configure integrations. Many standard integrations can be configured using our rule robot in a few clicks, and reusing previously built integrations is easy. You will not need any capital expenditure to ensure your integrations are running as we ensure the platform scales while also being monitored around the clock.

Make decisions quicker

Data is no longer dispersed across many siloed storage systems. You don't need to manually download and export data to the centralized repository to do analytics. Instead, you can derive relevant business insights from a comprehensive view of all data to make better choices faster. The decision to integrate systems can also be made quicker. ONEiO's pricing model allows you to create low-volume integrations using the message quota included in your plan. For high-volume situations, ONEiO offers flat-rate integrations to remove any guesswork from estimating the total cost of your integrations.

Save money

System integration is often less expensive than replacing all disconnected pieces with a new integrated system or platform. Not to mention the difficult task of putting new infrastructure and monitoring in place. When integrating with ONEiO, there are no infrastructure costs to consider; it's all maintained by us and is part of your subscription. Our competitive and transparent pricing and the included support ensure that there are no hidden costs involved.

Done with the spaghetti monster? Book a quick assessment call with us today!