Importance of integration to companies

Organization exist to achieve some purposes or some adjectives. Some companies produce
products and deliver directly to customers. The others productions are used to create others
products or services to provide the manufacturers . Although they exist for many different
purposes and variety in the size and complexity or locate in different countries, they all use
processes and enterprise systems for their activities and to achieve their goals.(sgk)
Business process is the task or activities which produce desire outcomes. Every
process is triggered by some event like receiving customer order or recognizing
the need to increase inventory (SGK)
Business Process Integration (BPI) is the synchronization of a companys internal operations
with those of its other divisions and its trading partners by connecting disparate systems in
real-time. ( http://www.lansa.com/resources/jargonbuster.htm)
Importance of Business process integration to the information
Easier to evaluate the customers
When customers buy products from a company, all the data relating to them will be saved on
the company's master database about their name, the products they bought, the integrated
customer data help enterprise to evaluate which group of customers bring the most
profitable to the company, the buying trends of them, what they need from their products.
Therefore, they can analyse the customer data and perform a suitable marketing plan for
each market share.
Coca-Cola is a global corporation whose branches are located in every corner of the world.
According to statistic data in 2012 about the world's consumption of Coke products, some
745 servings of 8-fluid-ounce beverages were consumed per person in the Mexico
which ranked the first in the proportion of world Coca-Cola consumption. And the
next country is Chile with the result is 486.
( http://www.statista.com/statistics/271156/per-capita-consumption-of-softdrinks-of-the-coca-cola-company-by-country/) According to this database,
Coca-Cola can use it to evaluate the most valuable market share in the world and
then they can apply suitable strategies for each market to gain the maximum profit

Simplify the system

Business process integration also simplifies the structure of the system but make the
process works more efficiently with higher performance. Although each company code works
as an independent unit, their data could be used within company codes. For example CocaCola Singapore and Coca-Cola Thailand are two of Coca-Cola company codes, which have
separate financial statements. However Coca-Cola Thailand customers are Coca-Cola
Singapore customers because the customers information is saved in the database which
could be entered by any company code. Therefore it is very simple to manage the
customers data without duplicating the information which could cause errors in the revenue
in financial statements. So that, the more simple the system, the easier to manage it.

Reduce extra costs

One database for every company code could save a lot of cost relating to
maintenance, synchronization services.

Importance of Business process integration to the people

Increase productivity
With an integration system, data entry manually has been decreased. It also reduce the
human errors ricks and allow the staff to spend more time on customers focus then
administrative ones.
Quickly identify problems and solve them.
With Business Integrated Process, Identifying a problem is faster. For illustration, when
selling a product to a customer, the process starts from receiving customers purchase order
to create invoice and receive the payment. When a problem occurs for example, the wrong
quantity or wrong goods type, they can identify when the purchase order is received, the
content of it and when and who pick the product from warehouse. Therefore, they can
identify errors occurred from which plant, and who cause the problem.
Decision making
With the optimism of the system and updated information, administrators are able to give the
most accurate decision for the production plan to increase revenue and reduce cost. CocaCola has several type of plants so they can decide which factory produce raw materials and
which produce finish goods.
Importance of Business process integration to the software and hardware aspect
One software for entire business process helps the company easier to manage
and reduce the cost for maintenance. it also require less people to manage,
optimize for the entire business system.
We can see Business process integration is very important. With lack of
integration, many problems occur.
Enterprise systems are one of the most complex and powerful information
systems which are used today. The architecture, in other words, the structure of
it refers to the technical structure of the software, how people use it, and how it
interacts with the hardware. Enterprise resource planning systems are the
worlds largest and complex enterprise systems which focus on intra company
processes.

----------------In the following part, I aim to show the problem arises without Business process
integration and how ERP system address these integration issues.

ERP and solution for poor performance.

Enterprise has to buy raw materials from many vendors. Therefore, a huge
amount of input data of vendors as well as documents needs to be processes.
When a company is lack of integration, the data could be fragmented and if this
situation continues for a long period of time, the performance of the company
can be affected in a negative way.
Lets take a look at a case study of Sony Corporation, whose headquarter is
located in Mintao, Japan. Sony is a company which is a leading manufacturer of
electronics, videos, communications and video game consoles, with a slogan
Sony. Like no other. Sony corporation is the electronics business unit and the
parent company of the Sony group. At the beginning, due to lack of integration,
Sony faced many problems: Because of the silo culture which means their
departments or sectors doesnt share information with each other although they
belongs to the same company. So that, this model hindered the company from
accessing the product. Another factor is they were lack of coordination and
communication across divisions.
After studying deeply about their system and their requirement, there were a
few solutions which are chose base on top of Microsoft Commerce Server and
Microsoft SQL Server technologies. Microsoft Commerce Server contains
important parts which are used fro establishing and expanding the focus on the
online customers. It also allow for product catalog setup and personalization.
Besides, Microsoft SQL server permits extensive OLAP and data mining
functionality, thereby facilitating better decision making.
The new solution brought many benefits to Sony. They attracted more online
customers and create different experiences for customers which encourage them
to shop online more. It provided centralized management and reporting by
system administrators resulting in more active involvement and effective
monitoring. (http://www.slideshare.net/ParimalPatel/erp-case-study-on-sonycorporation?next_slideshow=1)

Cost structure too high and uncompetitive performance with invisibility

of info
For a system without consistency, the cost that enterprise has to pay to maintain
it is not a small amount at all. In another hand, we can see that is a waste
investment with low performance.
We can see how Mal-Bar, Inc (MBI) got successful result from Implementation.
Mar-Bal was founded by Jim Balogh and it is located in Chagrin Falls Ohio. MarBal is a compounder and molder of the thermoset composite products. Since
1970, Mal-Bal has designed and produced high quality materials and
components. This company also invested in electrical, transportation, industrial
marketplaces from four facilities in North America.
A few years ago, MBI experienced a big problem due to the customized (AS400Based) ERP software which was out dated. MBI couldnt complete necessary
tasks in manufacturing and it was very difficult for them to compete with other
companies in the rapidly changed speed economy. After each year, the cost to
operate the old system was higher due to the fact that it needed a special
support to maintain as well as to update it. Furthermore, the old system also

lacked of necessary services like the automatic transmission of advanced

shipping notices and e- invoices, which are very crucial to the business activities.
The outdated structure also could be seen in the inventory control. They had
to manually scan inventory from the shop floor which consumed a lot of time and
the errors occurred was unavoidable. Due to this inconvenience and unreliable
system, a full physical inventory had to be performed once a month because the
inventory was invisibility. All the staffs had to manually check the inventory
levels and that task wasted a lot valuable time for the production. Another
difficulty MBI had to face was managing the consigned inventory by the old
system was very difficult because it did not follow or keep track of which material
was on hand at the customer site and there were no method to add or reduce
vendor managed inventory based on shipments and consumption.
And again, this old ERP system provided poorIy the number of reporting tools as
well as unable to have the forecast function. Most month-end activities required
at least two weeks to finish. There were also occurred many bugs in the internal
system communication which resulting in poor customer service because sales
person on the road could not access important order status information and the
resuIt was it took a lot of time to response to the customers.
MBI had two options: continue using the outdated system or investing in a new
ERP system. Finally, MBI decided to find a new supplier who could give an
optimal solution for their situation which could process more transactions for a
shorter time while still aIIow MBI continue to sale without expanding staff for
data management.
EnterpriseIQ was installed at the headquater of MBI in Ohio and then
implemented at MBIs four facilities. Following the implementation, MBI started to
see positive resuIts.
Through IQMS robust and native EDI module, MBI is now can connect to its
clients demand planning system. With a real time process system, orders from
their customers are automatically sync into EnterpriseIQ. Therefore, the time to
process these orders is shortened. Outbound EDI functionality embedded with a
new feature of auto invoicing in EnterpriseIQ can allow their staffs to transmit
more than 100 invoices within a couple of minutes. MBI has reduced an average
amount of invoice aging due to the rapidly in resolving the price or quantity
discrepancies rather than discovered weeks later.
With a new IQMS Warehouse Management System ( WMS), MBl now has ability
to track the movement or the change of the inventory from the smallest part to
every box within their plants. With the assistance of barcode labelling and
scanning technology, their staffs will no longer have to manually classify the
inventory items every month. This technique saved plenty of time for the labor.
In addition, MBI optimized business activity monitoring system, the lQAlert could
check any problem occurred that need to be investigated such as negative
inventory. The visibility of the new system have improved with real-time plant
floor production calculating and have ability to access remotely.
(http://www.iqms.com/company/mar-bal/index.html)
ERP system can solve invisible information.

Without an integrated system, the company has to face a hard situation: the lack
of readily available information. Therefore, this situation will have a negative
impacts on the relation between customers and the suppliers. For illustration, we
can take a look at Monaco Telecoms situation before and after applying ERP
solutions.
( http://www.bettererpsystems.com/benl/docs/cases/monacotelecom.pdf)
Monaco Telecom is the main telecommunication provider in Monaco, which was
founded in 1997 by Monacos Government. This company is part of Cable &
Wireless group and the global leader in providing telecom services for small to
medium size economies. This company integrated telecom companies in 33
countries around the world.
In 2006, Monaco Telecom took part in an extensive corporate reorganization in
order to improve the performance and to expand their products and their market
share. The company started to invested in its internal system in 2007 to improve
its service. As a part of Monaco Telecoms reorganization, the efforts they focus
more on the administrative than the value-driven. However, they still used the
legacy finance system. The negative aspect of this system was it had lack of
integration functions but many manual control interfaces and processes.
Therefore, that system was very complex, rigid and low performance. They also
gave some in-house built solutions but the limited impacts were still there
because all the important processes were manually controlled.
The finance and purchasing teams realized that the legacy system was outdated
and unsatisfactory and it was the main reason which caused the lack of readily
available information, reporting and analysis for operational divisions. It also
caused directly to the relationship between the company and their customers
They needed a flexible ERP system which could be elastic enough to fit all the
needs of every department in the group. They also needs to easily consolidate all
the data from these multiple entities.
Due to the low performance of the legacy system which they used to operate
there business processes, Monaco Telecom decided to re-organize their system
structure by replacing an outdated legacy financial tool by a new integrated ERP
system which is more flexible and very easy to use. With all these requirements,
Monaco Telecom chose Avanade as their integration partner. They used Microsoft
Dynamics AX with Avanades help. It was considered as the best value
proposition. Included in the solution were Retail Pro in order to manage sales in
the companys retail outlets, and ReQ Logic, which is used to manage the
purchasing approval cycle on the corporate Intranet.
The visibly positive effect of Microsoft Dynamic AX was the international easily
and rapidly deployed. Comparing to others ERP products on the market, this
solution has its own advantage due to the flexibility to fit the companys specific
demands while other products were heavier and the functions were not as
flexible as Dynamic AX.
Today, with the new ERP system, Monaco Telecom has a successfully business in
a highly competitive international Telco marketplace. This new ERP solution can

help the company to put place in the foundation of an integrated finance

function which can support them through the future of the company.