An Introduction to

System Integration

University of Sialkot

Instructor ： Mohsin Ali

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INTRODUCTION 01
Functional Silos
Horizontal Silos TABLE OF CONTENTS
Vertical Silos
Business Process and Silos System
Integration 02
Evolution of IS in
Organization
Logical Integration
Physical Integration
ERP and System Integration 03
IS Architecture
Logical vs Physical SI ERPs Role in Physical Integration
IS Functionalization ERPs Role in Logical Integration
Steps in SI
Benefits of SI
Limitations of SI
What is Silos???
 A tower or a pit on a farm used to store grain. An underground
chamber in which guided missile is kept ready for firing.
A system process, department, etc. that operates is isolation
from others. “It’s Vital that team members step out of their
Silos silos and start working together”

Isolate (one system, process, department, etc.) from others.

“most companies have expensive IT systems they have
developed over the years, but they are soiled.”

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What is Functional Silos???
 Functional silos in a business are teams of employees,
grouped by function, that all operate separately from each
other, without cross-collaboration. Silos are basically
compartmentalized operating units isolated from their
environment".

Functional
Silos A term used within business process re-engineering (BPR) to
denote areas within an organization where managers occupy
a privileged position in terms of resources and influence, and
where they use this for their own, self-interested,
functionally-oriented motives rather than for the wider
benefit of the business. BPR recommends the removal of a
function-focused approach and its replacement with a
process-focused approach, thereby destroying the functional
silos and encouraging cross-functional integration.

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What is Horizontal Silos???
 Horizontal Silos
 The POSDCORB (Planning, Organizing, Staffing, Directing, Coordinating,
Reporting and Budgeting) categorization by Luther Gulick led to a set of
formal organization functions such as control, management, supervision,
and administration starting in late 1930s.
 Classification of organizations into departments like Accounting and
Human Resources, reflects the breaking of complex tasks into smaller
manageable tasks that could be assigned to a group of people who could
then be held responsible.

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Functional Model of Organization
(POSDCORB)

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What is Vertical Silos???
 Vertical Silos

 Organizations also divided roles in hierarchical layers from strategic

planning to management control and operation control.
 CEOs and Presidents plan long-term strategy, midlevel management
focuses on tactical issues and on the execution of organizational policy
whereas the lower-level management task is to focus on the day-to-day
operations of the company.
 As organizations get big and complex they tend to break functions into
smaller units and assign staff the responsibility for these activities allowing
them to manage complexity as well as specialize in activities that enhance
productivity and efficiency

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Hierarchical Model of Organization

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Evolution of IS in Organization
 Evolution of IS in Organization

1. Introduction to the Role of Information Systems (IS)

 Start by stating that information systems have always played a crucial role in
supporting business activities and enhancing worker efficiency.
 Information systems help automate tasks, streamline operations, and allow
businesses to function more effectively.

2. The Need for Change as Businesses Grow

 As businesses expand and evolve, their needs also change.
 To keep up with these changes, information systems must adapt and evolve too.
 Over time, the result is often a wide variety of information systems and different
computer architectures within the organization.

3. Problem: Heterogeneous Systems

 These systems may not work together; they become heterogeneous or non-
integrated systems.
 This creates bottlenecks—which slow down processes—and interferes with
productivity.
 Since these systems lack control and coordination, they become prone to issues
like inconsistent, inaccurate, and incompatible data.
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 Evolution of IS in Organization
4. Silo Systems
 These independent systems grouped by different functions or departments are
called silos.
 The key issue with silo systems is that they cannot share data. They only serve
individual tasks or departments (e.g., sales, HR, or shipping).
 As a result, users must manually integrate data from different systems, increasing
the risk of errors and data inconsistencies.

5. Problem with Functional Silos

 Organizations often design their structure around functions (departments), and
employees are rewarded based on functional performance.
 However, the problem is that customers receive value not from individual
departments, but through cross-functional processes that require collaboration
across departments.
6. Modern Performance Metrics
Modern organizations now recognize this problem and reward employees based on
multiple performance areas:
 Personal performance.
 Business unit performance (how well their department performs).
 Corporate-level performance (how well the organization as a whole performs).
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 Evolution of IS in Organization

7. Balance Between Functional Management and Process Delivery

 Functional management (managing individual departments efficiently).
 Process delivery (ensuring that processes, which cross departments, work
smoothly to deliver value to customers).
 It’s important to note that organizations have been designed around functions for
a long time for good reason. Functions like sales, manufacturing, HR, and
warehousing provide essential structure.
8. When Functional Performance is Over-Emphasized
 When organizations focus only on functional performance, they tend to create
silos.
 This can lead to optimizing outcomes for a single department, but it may come at
the expense of the end-to-end process.
 Focusing too much on functional silos while ignoring cross-departmental processes
can harm the organization’s overall performance.
9. The Inefficiency of Silo Information Systems
 In today’s organizations, silo systems create several problems:
 They are inefficient, meaning they slow down business operations.
 They are inaccurate, leading to errors because data is re-entered multiple
times.
 They are expensive, requiring more time, money, and effort to manage.
 These systems hamper enterprise decision-making because critical information 16
IS Architecture
 IS Architecture

 Information System (IS) Architectures refer to how an organization's

information systems are structured and how they are configured to meet
the organization's information needs.
 Organizations can choose from different system architectures, and these
choices depend on their specific business requirements.
 The technology used in IS architectures is evolving due to rapid advances
in computer and networking technologies.
 Due to the constant improvement in technologies and changes in how
businesses operate, new information system models are continuously
being developed.
 Today, many businesses use Web-based models, which are flexible and
allow companies to meet the demands of their customers.
 As business models change, the IS architecture must also evolve to meet
new challenges and opportunities.

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 Distributed Architecture
Distributed Architecture: A key feature of today’s IS is the distributed architecture,
which enables the sharing of applications and data resources between different
machines (client and server computers).
Centralized Architecture: All the data and applications are stored in one central
location (like a server).
Decentralized Architecture: Each user or department has control over their own
data and applications.
Network Connectivity: In this architecture, personal computers (PCs) are
connected through a network to a Web server.
The Web server acts as a gateway to access applications and data stored on
application and database servers (which could be a mainframe or another type of
server).
 Features of Distributed Architecture:
 Shared Resources: The server typically stores applications and data that are
used across the organization, whereas PCs may store data and applications that
are specific to a user and don’t need sharing.
 Real-Time Data Updates: One of the primary benefits of distributed
architectures is the ability to update and share data in real time.
 Data Consistency: Because data is shared and updated in real time, there is
minimal duplication of effort and better data consistency across the organization.
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IS Functionalization
 IS Functionalization
 Information Systems (IS) are used not only to support different
management levels but also to aid major business functions such as
manufacturing, marketing, accounting, finance, and HR.
 Each functional area (department) has different information needs and
report requirements based on their role in the organization.
 An HR Information System (HRIS) provides data on employee payroll and
benefits.
 A Manufacturing IS provides reports on production schedules and
inventory.

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IS Categorized by functional and Hierarchical
Models

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What is System Integration???
 System integration is the process of combining different
subsystems or components into a single, larger system that
System functions cohesively. The goal of system integration is to
Integration ensure that all of the individual subsystems work together
seamlessly, allowing the larger system to operate efficiently
and effectively.

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 System Integration

 Logical
Develop information systems that allow organizations to share data with all
of its stakeholders based on need and authorization.
Management needs to change organizational structures, processes, and
employee roles and responsibilities.

 Physical
Provide seamless connectivity between heterogeneous systems.
Business process reengineering involves changing the mindset of the
employees in the organization, encouraging and enabling them to do their
tasks in a new way.

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 Steps in Integrating Systems
Step 1 Resource Instituting IT support for an integrated
categorization systems environment is necessary to
avoid support and maintenance problems
with the integrated system.

Step 2 Compliance Develop a single sign-on policy because

and standards all employees and external partners will
need access to an integrated system from
anywhere, anytime.

Step 3 Legacy systems Develop a policy in support of older

support legacy applications.

Step 4 Middleware Middleware tools are essential for

Tools integration in the short term—if existing
applications must be used by the
organization.
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 Steps in Integrating Systems

Step 5 Authentication Single sign-on policy for application and

and data access because all employees and
authorization external partners will need access to an
policies integrated system from anywhere,
anytime.
Step 6 Centralized IT The IT staff needs to be able to support
services and all applications and platforms with a
support centralized IT help desk support.
Step 7 Back-up, A good back-up and recovery system is
recovery, and essential if there is a system failure or a
security major disaster.
Step 8 Hardware and Develop organization standards and
software policy on acquisition of new hardware
standardization and software which is aligned with
organization IT strategy.
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 Benefits and Limitations of Systems
Integration
Benefits Limitations
Increased Revenue and Growth High Initial Set-up Costs

Leveling the Competitive Power and Interdepartmental

Environment Conflicts (due to the sharing of
information)
Enhanced Information Visibility Long-term and Intangible ROI
(Usually several years)

Increased Standardization Creativity Limitations (Restricts

Creativity and Independence)

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 ERP and Systems Integration
 Enterprise Resource Planning (ERP) systems are integrated, multi-module
application software packages designed to serve and support several
business functions across an organization.

 ERP systems are typically commercial software packages that facilitate

collection and integration of information related to various areas of an
organization.

 ERP systems enable the organization to standardize and improve its

business processes to implement best practices for its industry.

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 ERP’s Role in Logical Integration

 ERP systems require organizations to focus on business process rather

than on functions.

 ERP systems come with built-in processes for a wide variety of common
business functions.

 An ERP system implements best practices via specific built-in steps for
processing a customer order in terms of:
 order entry.
 routing through departments.
 communication of output to various parties.

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 ERP’s Role in Physical Integration

 Before installing the ERP system, an organization may have to upgrade or

install middleware or get rid of their legacy system’s hardware and
software.
 Integration is also required at the Data level, Client level, and at the
Application level.
 A good ERP implementation improves operational efficiency with better
business processes that focuses on organizational goals rather than on
individual departmental goals.
 Improved efficiency with a paperless flow and electronic data interchange
(EDI) or business-to-business (B2B) commerce environment with partners.

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Thank
You
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