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48 Chapter 2 • Systems Integration

Benefits of System Integration
If done right, systems integration can produce tremendous benefits as shown in Table 2-2. Some
of the key benefits of systems integration are as follows:
1. Increased Revenue and Growth. In general, one of the biggest benefits is reduction in
inventory and personnel costs due to integrated systems. For example, Uvex Sports, Inc., a
sports gear company, saw sales grow from $1.2 million to $5.2 million without additional
costs and with the addition of only two extra employees. 10
2. Leveling the Competitive Environment. Systems integration can make a small company
behave like a big player because, with the help of integrated business-to-business (B2B)
software, many of them can now compete with big companies to get orders from giant
retailers like Walmart, Target, and others because they can provide the same level of
service with enterprise systems.
3. Enhanced Information Visibility. The increased availability of information enables
managers and employees to make informed decisions in a timely manner. For example,
customer service representatives of American Express can now make credit approval
decisions on the spot while talking with their customers due to better access to customer
credit profiles.
4. Increased Standardization. A side benefit of integration is that it forces organizations to
standardize on their hardware, software, and IT policy. This may initially cost some
money, but in the long run companies easily recoup those costs.

Limitations of System Integration
Systems integration does have its drawbacks, as shown in Table 2-2. These are as follows:

1. High Initial Setup Costs. The initial implementation of integrated systems is high in terms
of both hardware and software costs and human costs due to the re-engineering of business
processes. Although these cannot be avoided, their negative influence on the implementa-
tion can be minimized by a long-term resource allocation plan and commitment from top
management.
2. Power and Interdepartmental Conflicts. Systems integration often involves sharing of
information across department and interdepartmental teams. This often creates power
conflicts among the functional departments if they have not bought into the integration.
Educating employees with a good change management strategy that communicates the
long-term benefits from systems integration can minimize these conflicts.

TABLE 2-2 Benefits and Limitations of Systems Integration
Benefits of System Integration Limitations of Systems Integration

Increased revenue and growth High initial setup costs
Leveling the competitive environment Power and interdepartmental conflicts
Enhanced information visibility Long-term and intangible ROIs
Increased standardization Creativity limitations

10 Kempfer, L. (September 12, 2005). Integration Improves Throughput. Materials Handling Management.