What is system integration?
System integration is the connection of different software systems, applications and hardware components as a unified system. It's similar to joining puzzle pieces, each representing a unique software component that performs a specific function in a business.
Integrating systems can be a game-changer for small businesses. Streamlining operational processes and promoting efficient data exchange can significantly increase productivity and boost bottom-line results.
Common types of integration systems
Choosing the correct type of integration for your business is crucial. There's no one-size-fits-all solution, but all integrations aim to boost operational efficiency and quality. Unlike manual data sharing, automatic data sync between systems saves time and enhances communication within and beyond your company.
The following are some of the most common types of integrated systems.
Data integration
Combines data from different sources for smoother system access, enhancing information accessibility and consistency. Centralising data simplifies retrieval and processing, increasing operational efficiency and data management.
Business-to-Business integration
Automates data transfer between trading partners, facilitating real-time and accurate data exchange. While it can present particular challenges, it significantly streamlines communication and accelerates business transactions.
Legacy system integration
Links outdated but crucial systems with modern infrastructure to extend the system’s capabilities. Although complex, it minimises the risk of an obsolete system and facilitates smooth business operations.
Electronic Data Interchange (EDI)
Enables system-to-system exchange of business documents electronically, reducing reliance on paper transactions. It enhances operational efficiency and improves data accuracy by saving time and reducing the potential for manual keystroke errors.
Enterprise Application Integration (EAI)
Connects various applications for both internal and external users, streamlining communication and improving security. Removing the need for manual data transfer and frequent platform-switching enhances operational efficiency and simplifies system management.
Systems integration methods
Horizontal integration
This method involves creating a unique subsystem that serves as an intermediary, managing the communication between different software systems. Think of it as a postmaster, delivering messages (data) from one software system to another.
Vertical integration
In contrast, vertical integration builds on the foundation of creating "silos" or subsystems, where each subsystem handles specific tasks. It's akin to an assembly line, where each worker (software system) contributes to creating the finished product.
Star integration
Star integration creates direct connections between subsystems, enhancing functionality but escalating management complexity. The increase in integrations directly correlates with the number of systems involved. A single system modification can impact multiple connections, leading to its nickname, "Spaghetti Integration.”
Point-to-point integration
Point-to-point integration, involving only two system components, provides integration between two systems without the complexity of complete system integration. These integrations usually handle a single function without complex business logic and are often available as pre-packaged modules in cloud-based applications.
System integration testing
System integration testing checks for the smooth operation of interconnected software. The aim is to verify successful data transfer and task completion.
There are several ways to test integrated systems. Big Bang integration testing combines and tests all system components as one entity. This method usually occurs following the completion of all modules but before system-level testing begins.
In contrast, incremental integration — including top-down, bottom-up, and sandwich testing — assesses components individually or in smaller batches. Since all teams can work simultaneously, it's ideal for delivering software quickly.
The benefits and challenges of system integration
Systems integration provides several benefits to small businesses, including:
Faster operations and cost savings via automation
Better decisions due to data-driven insights
Enhanced security with central system control.
For example, a small healthcare clinic could integrate its patient management system, electronic health records software and billing system. This integration would result in real-time updates to patient records, efficient tracking of health trends and simplified billing processes, ultimately enhancing efficiency and patient care.
Despite these benefits, system integration can pose challenges, especially for small businesses with limited resources. Obstacles may include:
Implementation complexity and duration
Potential system incompatibility and software failures
Possible security vulnerabilities from interconnected systems
Unforeseen costs from maintenance, updates and hardware or software upgrades.
However, the advantages of system integration far outweigh these disadvantages, and the risks are manageable.
Phased implementation, compatibility checks, cybersecurity measures and comprehensive budgeting can help address these issues. System integration becomes a valuable investment for small businesses as a result.
The 4 steps to effective system integration
1. Identifying business needs
Start by determining your objectives for system integration. Evaluate your current business workflows, identify areas that could be more efficient and define the specific results you want to see from the integration.
2. Choosing the right integration approach
Next, select an integration approach that matches your business needs and resources. When deciding, consider the complexity of the systems you want to integrate, the available resources, and the data access and control level you want to achieve.
3. Implementing and testing
After selecting the most suitable integration approach, it's time to implement the plan. Implement the system, then conduct comprehensive integration testing. This step is crucial to confirm that the systems interact correctly and that the data flow between the integrated components is accurate and reliable.
4. Monitoring and maintaining
The last step involves regularly checking the performance of your integrated system. Consistent monitoring helps identify potential issues early on and allows for timely adjustments that cater to evolving business needs. This proactive maintenance strategy ensures the seamless functioning of the integrated system.
MYOB: a business management platform
Rather than worrying about how to connect your tech stack, consider the benefits of an integrated business management platform.
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Disclaimer: Information provided in this article is of a general nature and does not consider your personal situation. It does not constitute legal, financial, or other professional advice and should not be relied upon as a statement of law, policy or advice. You should consider whether this information is appropriate to your needs and, if necessary, seek independent advice. This information is only accurate at the time of publication. Although every effort has been made to verify the accuracy of the information contained on this webpage, MYOB disclaims, to the extent permitted by law, all liability for the information contained on this webpage or any loss or damage suffered by any person directly or indirectly through relying on this information.