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Chapter 2 • Systems Integration 51

robust ERP system in place. More discussion on this topic will follow later in the book, but
suffice it to say that ERP systems provide a foundation for other advanced enterprise-level
applications (e.g., customer relationship management, supply chain management, e-Business,
and sales force automation).
Organizations can similarly achieve better fluidity with the help of ERP. By embedding the
best business practices and technology standards (e.g., Web-based architectures, integrated
systems platform, and distributed system access), ERP systems enable organizations to form
quick alliances and partnerships with relative ease. Such companies as Amazon, Inc., can easily
form and break alliances with other businesses (e.g., Toys R’ Us, Walmart, and KBToys) to sell
their products through Amazon’s e-commerce Web site. This fluidity has helped Amazon to
survive the dot-com bust by scaling its products and services with minimal costs. This would not
have been feasible without an integrated system. ERP systems process the transactions for an
e-commerce system, allowing it to scale without major bottlenecks in order fulfillment, customer
service, and account administration.

IMPLICATIONS FOR MANAGEMENT
12
According to Robert Tucker, author of the book Driving Growth through Innovation, one of the
reasons that innovation has not become embedded as a key driver of growth and profitability in
many organizations is that it has been limited by functional and divisional “silos” within compa-
nies. In other words, the responsibility for innovation has been limited to the R&D department, a
special innovation SWAT team, or a senior-level strategic planning group. He points out that this
is the way the innovation movement started out (i.e., with pockets of supporters in different
departments), but it succeeded in gaining enough support that it is today a core operating value of
the full organization in most successful companies. Thus, functional silos can have many
unintended consequences that can harm an organization’s growth and long-term competitive
position in the industry. Some implications for management based on the above comment follow.
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. In today’s globally
competitive environment, organizations have to compete both on lower cost and by providing
better customer service, through alliances and partnerships with competition, and from taking
other agile strategies to survive. Silos will prevent organizations to take advantage of supply chain
management and B2B e-commerce activity to introduce efficiencies in production and procure-
ment. Along those lines information that is not accessible to customer service representatives
when they are interacting with customers can spoil the relationships with the clients and have a
negative impact on future sales. Integrated systems are a critical and basic foundation for such
other information systems as customer resource management or sales force automation systems.
System integration has many hidden benefits. Management needs to understand the tangi-
ble and the intangible benefits of integrated systems. In addition to the immediate benefits of shar-
ing organization-wide information, systems integration allows decision making to be cascaded to
all employees in the organization. This can help the competitive position as employees at lower
levels can make better decisions while interacting with clients or partners. This may make the

12 Tucker, R. (2002). Driving Growth Through Innovation: How Leading Firms are Transforming Their Futures. San
Francisco, CA: Berrett-Koehler.