Every company uses stand-alone systems that do not integrate to any other system in their business. There are really good reasons for this and not every application needs to be fully integrated. However, in most cases there are several (if not dozens) of business applications that are utilized as stand-alone systems that should be integrated with other applications because they are dependent on data in those systems or the other systems are reliant on data from the other application which must be manually entered or manually uploaded. Any manual process is prone to human error and will not be completely reliable or up-to-date. This may be acceptable in some scenarios but is generally not a good business practice.
The first step to understand how much of a problem you may have is to take an inventory of every business application used in every department in your business or organization. Next, spend some time to ask employees how they use the software and where they get the data. Ask them if they have to re-key data or how often they need to upload data or export data from the systems. Ask them which systems they wish were integrated? Next, dig in and ask how much time is spent on duplicate data entry and the upload or export processes. Quantify this by documenting how often these processes occur.
For example, an export of orders from an EDI system may only take 5 minutes to complete and 5 more minutes to upload the orders into an ERP accounting system but if this happens two-times per day – every business day – you’re looking at an investment upwards of 80 man-hours per year if everything goes as planned and there are no errors or issues that need to be resolved. A very low burdened salary rate of $20 per hour shows that this process alone is costing a $2,500. What if this process could be integrated and automated for even double that cost at $5,000? You’d have a much more reliable process and you’d recoup your investment in just two years? Now consider the impact if you identify 10 different systems that have similar data issues – that’s $25,000 in wasted labor and inefficiencies that are preventing you from growing and providing better services to your customers, vendors, and internal employees.
What you’re going to find is that you have a lot more stand-alone software than you knew about. One more test is to review every major system on your list and write down how many of them have a record for a system user or an employee (most do). You’re likely to find that you’re maintaining employee and user information and security in dozens of applications. When employees leave the company you’re wasting a lot of time making changes to multiple systems to ensure that the user or employee records are updated not to mention adding new users or employees for that person’s replacement.
The more disparate systems you have – the less efficient you are, the more errors you’ll experience, and the more problems you’ll have internally with employees and departments and externally with customers and vendors. Take stock of what you own and the various system dependencies. In the end you may be better off moving to a stronger accounting or business application that has more features inside the box or at least has more integrated third-party applications available than the software you’re using today. You can also consider custom integration to bridge the gap in some circumstances.