Integration: Vertical, Horizontal, Systems, Technology, and Business Process are a handful of examples of the different applications of the term ‘integration’. One could argue there are special aspects of every industry that require their own definitions—let’s step away from the marketing-speak and get the applied meaning.
According to Merriam-Webster, integration occurs when separate people or things are brought together, like the integration of students from all of the district’s elementary schools at the new middle school, or the integration of snowboarding on all ski slopes.
What does Integration Really Mean to Your Company?
We like to think integration appeared in our business life when technology became prevalent—surprise—it’s been around a long time. It dates back to the 1630’ when integration meant making a whole by bringing something, anything together. But we’re going to keep focused on how it applies to business. Sadly in application, there is not always a positive result and to add insult to injury, a whole lot of cost.
To us, integration means bringing a set of disparate business elements together for the expressed purpose of improving process and reducing complexities to increase efficiency and effectiveness. Let’s point out just a few examples facing age-restricted retail businesses right now:
- Honor system Age Verification for website entry
- Manual ID checks for entry and purchase
- Verbal Age Verification on phone for delivery orders
- Online orders that require manual entry into inventory or POS systems
- Inventory systems not providing actual product availability to online ordering systems
These represent a good range of disparate business elements, each doing their job, but not as well as they could if brought together properly.
Now we’ve got a handle on what integration means, the assumptions in the definition, and some examples, we can cover what it does in real-world terms.
How does it help?
Integration provides the capability for different processes to communicate seamlessly with each other—safely and securely.
Using an example from above as context, integration of e-commerce, inventory, and POS systems immediately remove manual entry requirements of order receipt to fulfillment. If executed properly, it enables near-real-time product availability back to the e-com site, resulting in both front and back of house productivity gains, and let’s not forget—a much better customer experience! And this is only one level of integration on the path to improved efficiency and margins, there are still more—accounting, payments, age and ID verification, privacy protection, and delivery chain of custody remain largely disparate.
Lessons from the Trenches
The human dynamics to experience everything first hand—I’ll figure it out myself—is mirrored in the business world. Few young industries take the opportunity to learn from the trail blazers who usually pay a heavy toll years, often decades, earlier.
Integration is a lot like high-end sound systems—great sound, visually elegant and a confusing mass of wires that are kept hidden. Those wires, those connections, are the critical part of the system. So what happens if one of the wires becomes unplugged somewhere? Sadly, most folks lose track of what goes where. The great sound components and visual elegance no longer matter, it sounds like shit or worse, won’t work. You fall prey to the glam and sizzle, and it bit you later…hard!
When not pursued strategically, integration efforts often lead to a fragile solution at best, total system failure at worst. We can look quite recently to see examples of large firms suffering these kinds of failures. A little known reality is that consumer facing banking technology is the epitome of a high-end sound system that looks good and works, but behind the scenes it is held together with bailing wire…it’s a complex bundle of wires, connections, and systems from many different sources. Having spent more than 2 decades in the financial tech industry trenches, I know first hand the pitfalls caused by demand to deliver an elegant, easy to use experience based on tactics alone. Teams scrambling to make it work, avoid penalties, and keep it running at any cost. Not the picture of cost effective, safe, seacure, and efficient systems.
Integration in a Multichannel World
Businesses have little choice. They must provide a quality product at a reasonable cost, that is easy and convenient for consumers to acquire. If you’re not, rest assured others are.
Contending with a system outage or failure is costly in time, equipment, productivity, and the largest cost impacts you will face—your reputation, brand and your customer’s experience. In many cases, the cause of these events boils down to a single point of failure, usually a botched or fragile or inappropriate integration.
Drawing from the experiences of established, heavily regulated industries offers a roadmap to navigate these risks. Use established standards that are proven and trusted to reduce if not eliminate the regulatory boomerang experiences we all know too well.