Modern organizations function through a combination of systems, apps, and tools in a complex interconnected platform. Just think about the systems companies use to run day to day operations CRMs, ERPs, human resource platforms, project management tools, business analytics tools, and industry-specific software. These tools all play a vital role in the success of an organization. If these systems do not perform well together, the result will be wasted time, duplicated work, unreliable data, and unhappy teams.

As organizations scale, they often add new tools to their tech stack. Sales teams may have their tools, while finance, operations, and customer service will have theirs. Unless these systems are integrated, employees waste valuable time switching back and forth between multiple platforms, and manually entering information, all trying to ensure that information is consistent across systems. At an organizational level this leads to data silos that impact visibility and limit decision-making capabilities.

This is why enterprise system integration is now a strategic investment — as opposed to being a simple technical upgrade. Connecting your systems into an individual seamless ecosystem presents opportunities for unlock’ing significant value’. Integration increases productivity, provides better decision-making, creates collaboration, and positively affects costs across the organization.

What ROI Looks Like in System Integration

Return on Investment (ROI) for system integration is simply comparing the money you spend – whether it be on integration tools, development, training, etc. – to what kind of measurable value it returns to your business.

These values are a result of both direct and indirect benefits. Direct benefits are things like hours saved, labor costs reduced and fewer errors. Indirect benefits are equally valuable. For example, faster time to market, increased customer loyalty, and more capability to successfully scale.

Many companies see integration as a technical necessity. However, companies who look at it strategically see it as a growth mechanism that pays for itself over and over again.

Top Ways that System Integration Delivers ROI

1. Time-saving efficiencies and productivity

Manual processes kill productivity. Without integration, teams spend precious time doing things like copying information between systems, trying to find missing information and making corrections due to conflicting records.

With an integrative approach, information moves automatically. An order placed on your e-commerce site can automatically update your inventory system, create a shipping request and send a receipt to finance – all automated with no manual intervention.

The time adds up quickly. Employees will have time to focus on the meaningful work at hand, serving customers or developing new products rather than operational busy work.

2. Improved Data Quality and Insights

Data is only as good as the quality and accessibility of that information. The further personalization, the more the data can become disconnected, leading to stale and/or duplicate information that obscures the view of what’s happening across your business.

Integration enables you to connect data across silos, allowing a single source of truth. Data provides leadership teams with powerful real-time, trustworthy insights for making your next best decision. Marketing can have direct visibility into the most up-to-date customer information, sales can see orders being tracked immediately, and finance can run forecasts that are based on accurate data.

Fewer errors mean you will also have fewer expensive mistakes, ultimately saving costs while protecting your brand reputation.

3. Cost Savings Across Depts.

Efficient workflows support cost savings in a multitude of ways. Automation offers labor savings by removing the manual work without increasing wages related to overtime. With fewer iterations related to system errors you will have fewer instances of wasted time correcting problems and answering customer complaints.

Automated and integrated processes can also lower IT related maintenance and costs. Rather than managing multiple, disconnected platforms your IT function only has to maintain a monthly process for a set number of times a year, in the confines of a single ecosystem structure. You’re continuing processes associated with only (presumably easy maintenance), now only one process (less effort overall with fewer changes/revisions). You are also more secure.

4. Accelerated reaction time to changes in the market

The business arena is evolving rapidly today. The demands of consumers are shifting and changing, new technology is developed, and marketing conditions flip overnight.

But integrated systems allow you to be more agile and respond quickly. When your systems pass data seamlessly, it becomes easier to install a new cloud-based tool or launch a new service or program. You can quickly experiment with new initiatives, scale up and down quickly without major impacts and adjust quicker than your competitors on disjointed and outdated systems.

5. Better Customer Experience

At the end of the day, your customers truly feel the benefit of having their connected systems, or the burden of having disconnected systems.

When all your systems are integrated to share data, customers receive quicker service and more personalized experiences. Support teams are able to see entire customer histories in seconds, sales people can check inventory and see order details in real time, and marketing teams can respond to marketing campaigns based on customers’ real-time behavior.

All this builds trust and keeps customers coming back, ultimately building predictable long-term revenue.

Measuring the ROI of System Integration

So how do you translate the value of integration into numbers?

Here are some typical ways organizations measure the impact:

• Time Savings: Put a rough estimate of hours saved by getting rid of manual data entry and repetitive tasks — then just multiply by hours paid.
• Error Reduction: Measure the costs related to errors (incorrect orders, duplicate shipments, etc.) and estimate the cost savings from reducing incorrect data.
• IT Cost Savings: Compare the costs of maintaining as many standalone systems, with the costs of maintaining a fully-integrated system.
• Revenue Gains: Specifically calculate revenue gains with increases in time-to-market, customer retention, and additional upsell opportunities.
• Compliance Savings: If subject to regulated compliance, integration has the added benefit of enhanced compliance due to keeping data consistent and secure and the mitigation of exposure to costly fines.

At the end of things when you tally it all up, the total ROI of a proper integration strategy can easily be a multiple of what you would have spent upfront.

Maximizing Your ROI

Getting the best return from system integration is not automatic, and your success will depend on good planning, adequate tools, and effective execution. Here are several key steps to maximize your return:

1. Establish Clear Goals and KPIs
Define what success looks like. Is it 40% less manual effort? 50% fewer order errors? Setting clear goals that can be measured will help keep your project on track.

2. Determine the Right Integration Approach
Common integration options include APIs, ESBs (Enterprise Service Bus), and iPaaS (Integration Platform as a Service). A modern, API-first or iPaaS approach will give you the flexibility and scalability that rapidly growing organizations require.

3. Maintain Security and Compliance
Just because you are integrating does not mean you should lose sight of your data’s security. Consider encrypted data transmission, and secure authentication, and maintain governance across all of your systems, to ensure you are complying with regulations and auditing efficiently.

4. Gain Buy-In from Your Teams
Integration affects the way people work. Getting buy-in from all of the key stakeholders is important early on. Communicate the changes to all affected teams thoroughly and in advance, and involving them in some way will greatly help to facilitate their acceptance. Providing adequate training will also set you up for success from project initiation.

5. Monitor and Optimize Continuously
Integration is not “set it and forget it.” You need to monitor data flows continuously, fix them quickly if something is not working, and continue to find ways to enhance and build on your connected eco-system.

Real-World Example

Imagine a retail business, which uses separate systems for online sales, inventory management, and customer support. If they could integrate all of those systems, then stock levels could automatically sync on the system after someone purchases a product, the warehouse would be updated in real-time, and the customer would receive ‘in the moment’ updates on their delivery.

Overall, this would decrease delays in fulfillment times, decrease costs in operations, as well as create a better customer experience which leads to repeat purchases and value over the lifetime of the customer.

Conclusion

For today’s organizations, system integration is a lot more than a technical upgrade; it is also a smart investment that realizes real business value. Once we connect our tools, teams, and data together and create one connected ecosystem, we can save money by freeing up resources and eliminating expensive inefficiencies. We can also remain nimble and adapt to our chaotic world.

If you plan, budget, and approach system integration the right way, the ROI for system integration will pay for itself over and over again – it will provide better performance, level of customer happiness, and ultimately growth.