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Chapter 2 • Systems Integration 53

and vertically by hierarchical levels. This provided organizations with a single plat-
led to the development of hodgepodge form for integrating all of their functional
systems that could not share data across the systems. Organizations can simultaneously
various functional areas when organizations conduct both logical-level and physical-
moved from silos to cross-functional teams level integration because ERP systems
focusing on business processes. This led to come embedded with the best practices in
the major shift toward integrated systems. business process for common functions
•Global competition and business process from accounting to warehousing. ERP sys-
re-engineering led to the drive of integrated tems thus make the process of systems inte-
systems since the late 1980s. In order for gration easier, but they are expensive and
systems integration to be successful, organ- often require organizations to start from
izations have to focus both on the human or scratch.
logical level and on the physical or systems •Management should not take the task of
level. Focusing only on technical integration systems integration lightly or leave it for the
can lead to failure with high costs and em- IT staff. System integration involves and
ployee-user frustration. Systems integration impacts the whole organization, requiring
should be done in conjunction with business top-management support and resources for a
process re-engineering. There are lots of tan- long term. Human- or logical-level integra-
gible and long-term benefits as well as short- tion is necessary for the physical-level sys-
term drawbacks for integrating systems. tems integration to work. Management must
•ERP systems have played a crucial role be ready to face the human and ethical chal-
in systems integration because they have lenges in a systems integration project.

Exercises

1. Locate a company that you know and contact the materialized after their systems integration
IT manager and HR manager. implementations.
a. Find out what logical and physical integration c. Ask them for a few ethical or security viola-
issues were faced by this organization when tion examples that may have occurred in
they broke the functional silos and moved to their organization. Also, how were they
integrated systems. handled?
b. Show the list of benefits and limitations
mentioned in this chapter and find out which

Review Questions

1. What are functional silos, and how did they evolve 5. What is logical integration and how is it different
in organizations? from physical integration?
2. What is the relationship between organizational 6. Describe at least five steps involved in systems
functional silos and IS functional silos? integration.
3. Compare and contrast centralized, decentralized, 7. What are the key benefits and limitations of systems
and distributed IT architectures. Which do you integration?
think is most appropriate for ERP and why? 8. What is the role of ERP systems in systems
4. List the horizontal and vertical levels of systems integration?
that exist in organizations. 9. Summarize the role of management in systems
integration.