Course: ISYS6536-Enterprise System

Effective Period : December 2019

Systems Integration

Session 2
 Acknowledgement

These slides have been adapted from:

Enterprise Systems for Management

second edition (2014)
Luvai F. Motiwalla; Jeff Thompson
Pearson Education Limited, England
ISBN: 978-1-29202-348-9

Chapter 2
 Learning Outcome
Student will able to :
• LO 1: Explain basic concept of enterprise system for
management
• LO 2: Explain basic concept of system integration
• LO 3: Analyse case study in enterprise systems
 Learning Objectives
After studying this chapter, student will able to
:
• Understand the impact of organizational structure on
information systems.
• Find out about the types of functional silos in
organizations.
• Learn about the evolution of information systems
technology generations and architectures and its
influence on silo environment.
• Know what systems integration is and why it is important
for organizations.
• Understand the role of Enterprise Resource Planning
(ERP) systems in systems integration.
 Preview

• Systems integration means that you allow a

heterogeneous (hodgepodge) IS to communicate
or integrate and share information (or data)
seamlessly with one another.
• ERP systems are a major kind of enterprise
information system allowing organizations to
integrate different systems into one
organization-wide application with an integrated
database management system.
 Functional Silos

Functional Silos
• An individual business function that tends to act as a stand-
alone function, often formulating its own strategies and
work plans in parallel with other business functions.
This expression is used when describing an organization
whose functions tend to be less communicative and
collaborative.
Companies with functional silos may have greater difficulty
in creating strong, competitive products because they may
fail to recognize the benefit of cross-functional teaming

http://www.technology-training.co.uk/functionalsilo.php
 Functional Silos

Silos are basically compartmentalized operating units isolated from their

environment.

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.

Figure 2-1 Functional Model of Organization (POSDCORB)

 Preview

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 Figure 2-2 Hierarchical Model of Organization
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.
 Business Process and
Silos
• The problem of functional silos gave birth to business process
re-engineering (BPR).
• The cross-functional business process can involve people and
resources from various functional departments working
together, sharing information at any level of the organization.
• The cross-
functional
organizational
structure breaks
the functional silos
by opening up the
informational
flows from one
department to
another.
https://www.pinterest.ca/pin/371265563011055535/
 Figure 2-3
Matrix Structure of Organization

https://www.pinterest.ca/pin/371265563011055535/
 IS Architectures

• Rapid advances in computer and networking technologies

and changing organizational dynamics, drive the emergence
of new information system models.
• Web-based systems today use a distributed architecture
which allows the sharing of applications and data resources
between the client and the server computers.
• In this configuration,
personal computers are
connected via a network
to a Web server that
provides a window to an
application and database
server, which could be a
mainframe or another http://spmarchitecture.c
type of computer. om/information-
architecture-
definition/information-
system-architecture-
wiki-16475/
 Figure 2-5
Information Systems Architectures
Figure 2-6 Information Systems as
Categorized by Functional and
Hierarchical Models
 Systems 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.
 Steps in Integrating
Systems
Step 1 Resource categorization Instituting IT support for an integrated systems
environment is necessary to avoid support and
maintenance problems with the integrated system.
Step 2 Compliance and Develop a single sign-on policy because all employees
standards and external partners will need access to an integrated
system from anywhere, anytime.
Step 3 Legacy systems support Develop a policy in support of older legacy applications.
Step 4 Middleware tools Middleware tools are essential for integration in the
short term if existing applications must be used by the
organization.
Step 5 Authentication and Single sign-on policy for application and data access
authorization because all employees and external partners will need
policies access to an integrated system from anywhere,
anytime.
Step 6 Centralized IT services The IT staff needs to be able to support all applications
and support and platforms with a centralized IT help desk support.
Step 7 Back-up, recovery, and A good back-up and recovery system is essential if
security there is a system failure or a major disaster.
Step 8 Hardware and software Develop organization standards and policy on
standardization acquisition of new hardware and software which is
aligned with organization IT strategy.
 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)
 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.
 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.
 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.
 Implications for
Management
• Silos do not work.
– Most organizations lose out in the long-term when information is not
shared in real time across the functional boundaries within the
company.
• System integration has many hidden benefits.
– Allows decision making to be cascaded to all departments
– Allows employees at lower-levels to make better decisions while
interacting with clients or partners.
• System integration has many challenges.
– Replacing old hardware and software
– Working with IT consultants
– Human challenges, such as impact on IT staff, department heads losing
control of data, and rumors of layoffs
• Systems integration raises many new ethical issues.
– Possibility of some employees exploiting information for personal
advantage and illegal access of information.
• Remedies can consist of:
– Develop policies on ethical usage of information.
– Install proper security software and hardware (like firewalls).
– Allocate resources for training and education on accessing information.
 Summary

• Functional silos categorize an organization’s tasks and activities

into groups to improve efficiency and responsibility of work in
the organization.
• Silos can improve productivity, but they often lead employees to
achieve departmental goals rather than overall organizational
goals.
• IS over the years have been divided horizontally by functions
and vertically by hierarchical levels.
• IS architecture has evolved from centralized mainframe
architecture to personal computers with distributed or client–
server architecture.
• In order for systems integration to be successful, organizations
have to focus both on the human or logical level and on the
physical or systems level.
• ERP systems thus make the process of systems
integration easier, but they are expensive and often require
organizations to start from scratch.
• System integration involves the whole organization, requiring
top-management support and resources for a long-term period.
Continued to session 3

Thank you