General

What is System integration

Radzivon Alkhovik
Low-code automation enthusiast, Latenode partner
May 16, 2024
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System integration, often known as IT integration or IT system integration, involves linking different technological systems and software applications to work together as a cohesive unit. The primary purpose of any integration is to simplify business processes. For instance, Tool Integration enables different tools to function collectively, resulting in greater efficiency within an organization.

Similarly, the primary goal of system integration is to streamline business operations. This leads to increased productivity and a consistent flow of information across various platforms. Beyond connectivity, system integration helps organizations stay current with the latest technological advancements. When systems function seamlessly and as expected, businesses can respond swiftly to market changes and customer needs, ultimately gaining a competitive advantage and driving market growth.

Today, we're going to explore the various aspects of system integration, including common integration types, integration methods, and the crucial role of system integrators.

Key Takeaways:
System integration helps companies maintain a competitive edge and adapt to market changes by leveraging new technologies. With various integration types available, choosing the right method is crucial. Data integration ensures timely and accurate information for informed decision-making. System integrators provide technical expertise and strategic guidance for successful implementation and achieving business goals. 

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The Role of System Integration

Here at Latenode, we’re big believers in using integration to streamline and automate business operations.

There are three main areas where system integration plays a significant role for businesses all over the world: productivity, communication, and accessibility.

Productivity

One of the biggest impacts of system integration is on productivity and efficiency.

A 2005 case study on a home electronics store showed that automating administrative tasks through system integration allowed employees to concentrate more on customers, improving the speed and quality of service as well as enhancing customer satisfaction.

Boosts in productivity and efficiency don’t just mean additional profits but also potential cost reductions.

When left unoptimized, operational costs can easily eat away at revenue. System integration can help with this by ensuring that resources are used optimally and that processes can run more smoothly without redundant tasks​.

Communication

Another area that system integration can improve is communication, both within and outside of the organization. 

Seamless interactions are essential for modern businesses that rely on timely and consistent data exchange to stay competitive. It’s absolutely crucial for processes like supply chain management, where the accurate and swift exchange of information can dictate the success of operations.

One example is Kuwait International Airport (KIA), where integrating systems helped streamline various operational processes, such as regular tasks like issuing identification cards and managing employee vacations.

The result is improved data management across different departments. It also improved information sharing between the airport and its numerous stakeholders, including airlines and service providers. 

Accessibility

The ability to make data more accessible and constantly updated is also a major impact of system integration. With system integration, organizations can maintain a consolidated view of their data, which is crucial for making informed decisions. 

It also helps avoid errors and inefficiencies that can arise from separate information systems that are not well-integrated or perhaps not integrated at all.

A 2022 case study featuring a manufacturing company revealed that implementing system integration that resulted in data being accessible to everyone in the company at all times allowed the production and maintenance departments to coordinate better. 

5 Common Integration Types

As mentioned above, system integration isn’t a one-size-fits-all arrangement. Knowing which type suits your organization best can help you tailor your strategy to meet specific operational goals.

Here are some of the most common types of system integrations that you can choose for your business.

Data Integration

Data integration involves combining data from different sources into a single comprehensive view. This type of system integration doesn’t just make data more accessible across various platforms – it also helps organizations improve their decision-making.

This makes it very useful for businesses that rely on accurate and timely data for their operations, such as businesses in the healthcare, manufacturing, and financial sectors.

Business-to-Business (B2B) Integration

B2B integration connects business processes across different companies. To say it simply, it connects businesses to other businesses, hence the name.

This integrated system enables all transactions to be automatic, reducing manual activities in the process. This results in an improvement in the speed and accuracy of business interactions between companies.

Legacy system integration

While Latenode believes in the value of modern tech infrastructure, we do think there’s still space for tradition in today’s space.

This is what legacy system integration is all about. It’s a type of IT integration that’s most useful for organizations looking to modernize but don’t want to disrupt existing business processes.

If you don’t know what legacy systems are, these are older tech that may no longer go well together with newer tech. Despite this, established businesses that believe in the old adage “don’t fix what’s not broken” may still be reluctant to implement major changes.

The best compromise is to integrate these legacy software with newer technologies. This allows companies to preserve valuable data and functionality without having to upgrade their IT infrastructure. A win-win.

Electronic Data Interchange (EDI)

EDI is the structured transmission of data between organizations. True to its name, everything’s done electronically. Think of e-invoices, e-contracts, e-orders, and so on.

With EDI, businesses can streamline and automate all their workflow related to electronic data. This doesn’t just enhance efficiency, but it also reduces human error, which accounts for up to 58% of data loss in SMEs and a whopping 95% of cybersecurity-related incidents.

Enterprise Application Integration (EAI)

EAI focuses on integrating enterprise-level applications, programs, and software across an organization.

Unlike simple data integration, EAI is not just about integrating data – it’s actually about integrating the entire business process to streamline workflows, improve operational efficiency, and support real-time information sharing. 

For instance, a hospital might use separate software for patient records, appointment scheduling, and billing. With EAI, these programs can be automated to react to ‘triggers’ set by the other. This means that every time a patient schedules an appointment, their information in the patient records software and the billing software will also be automatically updated.

It’s a very efficient way to run a business that requires plenty of data and information on a regular basis.

Why Data Integration is Important

Speaking of data, one of the most common types of system integration is data integration. It may just be a subset, but it’s an important type all on its own.

Data integration merges data from various sources into a single, unified program. You can imagine it as putting together pieces of a puzzle from different puzzle boxes to form a complete picture.

This type of integrated system allows a single source of truth, which is crucial for consistency across different departments. Key players can then make informed decisions that can significantly affect the company.

For example, let’s consider a retail company that collects sales data from online transactions, in-store purchases, and third-party vendors. Data integration allows the company to take one look at its data and immediately understand overall sales trends, check inventory, and view updated customer preferences.

Another example would be combining marketing data from different platforms into just one software, something that we do here at Latenode. With our marketing automation tools, you can take a look at all the relevant data in one place, making the process of creating your marketing strategies much smoother and faster.

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Benefits of Data Integration

  • With all the data in one place, decision-makers have a full view of business operations, leading to smarter, data-driven choices.
  • Data integration reduces or even eliminates the need to gather data from multiple sources manually. This minimizes errors and frees up time that can be leveraged on other important tasks.
  • Having consistent data across various channels allows businesses to react quickly to real-time information, meaning they can adjust their strategies as market conditions change.

Ultimately, data integration isn’t just about handling data efficiently – it's also about transforming data into an asset that provides strategic value and competitive advantage.

Types of Integration Methods: Pros and Cons

If integration types are the categories of systems being integrated, integration methods are the architectural approaches used to accomplish the integration. Let’s discuss the most common ways to integrate systems below.

Point-to-Point Integration

Best for: Small businesses with fewer integration needs

Point-to-point is a method where each program or application is integrated with the next one that it needs to communicate with.

It’s basically a system-to-system integration where each one is directly connected to the other.

This IT systems integration method is a straightforward setup and doesn’t need any intermediaries. That said, it does grow exponentially with each new addition, making it hard to manage and scale once it gets to a certain point.

Pros:

  • Easy to implement
  • Simple connections

Cons:

  • Not scale-friendly
  • Can be hard to maintain past a certain point

Vertical Integration

Best for: Industry-specific businesses with specialized processes

Vertical integration is a method of integration that involves aligning various aspects or components to ensure that each one can function together. 

With this way of integrating systems, you’ll be controlling and coordinating an entire stack of technologies, from foundational hardware up through the application levels. 

Although this technically reduces each layer’s flexibility, it does make it easier to implement big changes across the entire program and manage them afterward. 

Pros:

  • Provides greater control over one unit
  • Makes it easy to manage and implement changes

Cons:

  • Each layer becomes less flexible
  • Can be costly to implement

Horizontal Integration

Best for: Large corporations with diverse departments

Horizontal integration connects different departments within an organization.

Unlike the vertical approach to software systems integration, which only deals with one area, this method connects platforms across different areas.

This approach enables different parts of the business to share resources and information more effectively, leading to increased collaboration and efficiency. 

Pros: 

  • Highly scalable
  • Improves interactions across different business areas

Cons:

  • Can be complex to implement due to wider coverage

Star Integration

Best for: Organizations with manageable connection points

The star integration method, also known as the hub-and-spoke method, connects each program or application to a central hub, which then manages communication with all other integrating systems. 

This setup ensures that updates or changes in one department are instantly accessible to all others through the central hub.

Take an airline reservation program, for example. The central hub could be the primary database that stores flight and passenger information. Meanwhile, the tips could be the different booking platforms and check-in counters that interact with this database to update and retrieve information.

Of course, the biggest downside to this integration method is that one mistake in the central hub can lead to the downfall of the entire thing. So, it’s really important to find a system integrator that knows what they’re doing. (hint: check Latenode to reduce your risks!)

Pros: 

  • Centralized management
  • Easier error handling

Cons:

  • Single point of failure
  • Complex central node management

Enterprise Service Bus (ESB)

Best for: Large or complex businesses that need to integrate multiple heterogeneous systems and applications

An Enterprise Service Bus (ESB) is a system integration approach similar to the star model in that it also has a central hub to manage communication and services between different applications.

Where it differs is the complexity of its features. ESBs use industry-standard protocols, making them more flexible and scalable compared to the simpler star approach. 

In an e-commerce business, for instance, an ESB could handle transactions between its inventory, the online sales portal, and the customer relationship management program.

In other words, using open standards makes it much easier to add, update, or even change services without extensive modifications to existing systems if any.

Pros:

  • Easy to scale as business grows
  • Supports multiple communication protocols

Cons:

  • Complex initial setup
  • Can be a bottleneck if not managed properly

Common Data Format

Best for: ​​Organizations looking to simplify communication between different software

As its name implies, the common data format method standardizes the data format across different software to secure compatibility and ease of data exchange.

A fantastic example can be found in the healthcare sector. Different programs used by healthcare providers tend to result in a variety of formats. This includes electronic health records, billing software, and appointment scheduling tools. 

By adopting a common data format, such as HL7, all these programs can communicate effectively. This guarantees that patient records are consistent and accessible across different platforms without the need for constant–and potentially complicated–data conversion.

Pros:

  • Allows seamless data sharing across different software
  • Reduces the need for multiple data converters

Cons: 

  • May restrict the flexibility of specialized formats meant for specific applications
  • Requires ongoing maintenance

How System Integrators Help With System Integration

System integrators (SI) are individuals or agencies that can greatly benefit your company’s integration process, from the initial planning stages through to the full implementation and training phases. 

The job of SIs often involves managing projects, designing solutions, and offering ongoing support – all of which are key elements for tackling the challenges of integrating systems and maintaining a smooth-running tech environment within a company.

From start to finish, an SI’s key tasks include:

  • Mapping out business processes
  • integrating applications through various methods like APIs
  • Overseeing system integration development
  • Configuring systems to work together smoothly
  • Verifying that new systems are working correctly once deployed
  • Providing essential training to employees and team members
  • Staying on top of maintenance and future updates

Because of this, SIs need to not only have the technical proficiency to work with multiple software applications and platforms but also have the problem-solving skills needed to identify and fix potential problems down the road.

Most importantly, the best system integrators allow businesses to apply the best practices in system integration. This helps businesses have a smoother, more effective integrating system process and also avoid common pitfalls such as data silos and bottlenecks​.

Latenode, for instance, offers a flexible and powerful way to integrate your systems and improve your business operations right at this instant – even if you have no knowledge of coding whatsoever.

With Latenode, users have the ability to use a simple drag-and-drop visual canvas and AI-supported JavaScript nodes. You can integrate with any service that has an API, incorporate over 1.2 million NPM packages, and even include capabilities for automating web interactions.

Not only is this service more cost-effective than implementing system integration from scratch, but it also offers users more control over their automation and workflows thanks to the ability to write custom code and use extensive libraries.

Conclusion

Throughout this article, we’ve explored the different types of integrations and methods that you can use for your business, as well as the pivotal role that system integrators play in this process.

At this point, the benefits of effective system integration should be clear and impactful. 

By enabling seamless interaction between separate systems, organizations can achieve improved operational efficiency, reduced costs, enhanced data accessibility, and better decision-making processes. 

In a world where businesses must adapt in order to thrive, system integration is an absolute necessity. Whether you’re looking to streamline existing processes, lower your costs, or enhance your technological capabilities, Latenode has something for you.

Explore how you can transform your business today with Latenode’s quick and easy system integration process!

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FAQ

What Is System Integration?

The simplest system integration meaning is basically a combination of different IT systems, software, and functions into a unified program that works like a single unit.

What Is an Integrated System?

The basic integrated systems definition or integrated systems meaning is a system that combines different components or technologies that work together as a whole, allowing seamless interaction and data exchange between them.

What Is the Main Purpose of System Integration?

The main purpose of systems integrations is to connect different technological software and programs in a way that leads to enhanced efficiency and functionality within an organization.

Is system integration Important?

Yes, system integration is important in optimizing business processes. More and more businesses today are becoming increasingly reliant on different tools and software. If you want to be able to keep up with the market, you need to be able to adapt to this fast-paced landscape.

What Makes System Integration Difficult?

System integrations can be challenging due to the need to combine diverse technologies, each with unique specifications, protocols, and data formats, into a single functioning unit.

What Should We Consider in System Integration?

There are many things to consider when integrating systems, including the compatibility of technologies, long-term scalability, data security, and the potential impact on existing workflows.

What Challenges Are Encountered in System Integration and Why?

Challenges encountered in system integration can include compatibility issues, data silos, and varying architectures. These arise because different software or programs often use incompatible data formats and technologies developed independently.

Do We Need a System Integrator?

System integrators are highly recommended to businesses that don’t have the technical capabilities or even time to integrate complex programs. With a system integrator like Latenode, you can ensure seamless integrations, minimizing risks and saving time and resources.

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