The famous quote, “No man is an island,” by the English writer John Donne, is particularly pertinent to the current IT landscape. In today’s increasingly connected business environment, no system operates in isolation. For a system to function effectively, it must rely on others. A company’s ability to focus on the big picture and collaborate seamlessly with stakeholders is necessary for global competitiveness. Holistic integration in IT is about more than linking individual systems – it’s about creating seamless connections between people, processes and technologies.
In this blog, we’ll explore the concept of holistic integration in IT with an emphasis on the logistics industry. We’ll start by examining the current situation in many companies, including the challenges posed by siloed structures. Then, we’ll look into the holistic integration approach and discuss its benefits.
Silos in the IT landscape – the current situation in many companies
Jeanne Ross and her colleagues1 define a siloed structure as a set of separate, non-integrated business processes. Common examples of silos include planning, procurement, delivery, storage and scheduling. Each related IT application is designed to handle a specific process, typically without considering the bigger picture. This siloed approach hinders seamless end-to-end processes, leading to several challenges for businesses.
- Inefficient processes based on redundant work and manual data transfer
- Lack of visibility and transparency, caused by the fragmentation of data across different systems and the absence of real-time information, makes decision-making challenging
- Customer experience is unsatisfactory due to inconsistent communication, delayed service and a lack of information about availability, orders and deliveries
- Isolated security measures pose risks to data security and compliance, leading to inconsistency and inadequate risk management
- A prevailing culture of isolation impedes collaboration and knowledge sharing, creating a resistance to change.
Consequently, increased costs occur.
A siloed structure, regardless of the level (infrastructure, application or process), makes it challenging for an IT department to align with the company’s long-term strategy and goals (strategic fit). Holistic integration not only addresses this challenge but also offers numerous other advantages.
What exactly is holistic integration?
The principle comes from the idea of holism, a theory focused on wholeness. It suggests that systems and their properties should be viewed as a unified whole, rather than just a collection of individual parts. According to this approach, you can’t fully understand a system by looking only at how its parts interact (bottom-up). Instead, the meaning and function of each part depend on its role and context within the entire system (top-down).
This approach places emphasis on understanding the interconnections and dependencies between different elements and how these relationships impact the entire system.
The holistic integration approach is comprised of the following key elements:
- Comprehensive view: As previously stated, holistic integration entails examining the entire system rather than concentrating on discrete components, in contrast to a reductionist methodology.
- Interactions: Each element in a system can have a different impact, relationship and dependency on other parts of the system. In order to achieve comprehensive integration, it is essential to consider these complex dynamics.
- Emergence: The system as a whole displays characteristics and behaviors that cannot be directly attributed to its constituent parts. Emergence arises from the interactions and dynamics of the overall system.
- Targeted changes: Holistic integration involves managing targeted alterations. This requires a deep understanding of system dynamics and the capacity to anticipate the influence of these modifications on the entire system.
- Adaptability: Holistic integration is a key enabler of flexible systems that can adapt to changing requirements. This is important in scenarios with complex and dynamic requirements, such as in the context of compliance requirements, rapidly evolving regulations or seasonal fluctuations.
Advantages of holistic integration in the logistics industry
Many aspects of holistic integration offer advantages to companies across all industries. What makes holistic integration a valuable approach for logistics?
Logistics companies utilize a wide range of internal systems to provide tailored services to their external partners. Common systems include warehouse management systems (WMS) for the optimization of internal warehouse operations, transport management systems (TMS) for the optimization of transport processes, enterprise resource planning systems (ERP) for demand-oriented deployment planning, business intelligence systems (BI) for key figure-driven business processes, and many more.
By adopting a holistic integration approach, it is possible to orchestrate all these systems and effortlessly manage the following core tasks in logistics networks:
- Efficient supply chain management through automated business processes
- Support and management of trading partner onboarding with the use of self-services
- Synchronous business processes through API integration and API management
- Agile process design according to individual customer specifications or for ad hoc requirements during ongoing operations
- Improved operational reliability for increased availability and easier scaling
- Connecting business applications with intralogistics
- Providing data to the entire internal organization and external partners
- Secure and legally compliant transfer of business-critical and confidential data in any format and size
- Digitalization of incoming and outgoing invoices according to industry standards and global regulations
- Business monitoring for status transparency in time-critical B2B/EDI processes
A variety of key advantages result from holistic integration in logistics, including:
- Significant time and cost savings
- Synchronous and secure communication
- Increased transparency
- Reliable fulfillment of regulatory requirements
- Improved data quality
- Increased supply chain efficiency
It is clear that a holistic integration approach requires a robust technological foundation that enables seamless connectivity between all individual processes and systems, allowing for uninterrupted and real-time data flows.
A real-world example from the logistics industry
To sum up, we will examine the practical application of holistic integration in logistics with the following scenario: A globally operating company sources raw materials from a number of suppliers, processes them in various production facilities and ships the final products to distributors and customers worldwide.
The company’s supply chain is complex, spanning multiple continents with a multitude of players, each using different systems and processes. Poor integration leads to information silos, delays and inefficient processes, which ultimately result in production downtime, overstock or stockouts, and dissatisfied customers.
The company applies a holistic integration strategy to connect all stakeholders and IT systems, thereby forming an uninterrupted, transparent supply chain. This integration encompasses:
- System integration: The integration of ERP, WMS and TMS systems, as well as other specialized software solutions, into a central platform streamlines operations and enhances efficiency.
- Data integration: The consolidation of all relevant data streams (e.g., inventory data, production status, delivery times, weather forecasts, demand forecasts) in a data warehouse or cloud solution creates a central data source.
- Process integration: The harmonization and standardization of processes across different locations and actors ensures consistent workflows.
- Real-time monitoring: Deployment of IIoT sensors and tracking technologies enables real-time monitoring of asset location and condition.
By adopting a holistic integration approach, the company has established a fully transparent supply chain, enabling the early identification and proactive resolution of potential issues. This has led to a minimum of bottlenecks and delays, increased efficiency and an optimized supply chain, resulting in reduced costs and enhanced customer satisfaction.
A comprehensive integration platform is the foundation for a holistic approach to IT integration
The SEEBURGER BIS Platform and our solutions for ecosystem integration facilitate the comprehensive integration of systems and services in logistics. By unifying API, B2B/EDI, EAI/A2A, IIoT, and MFT in a single, cloud-based integration platform, logistics processes with customers, suppliers and partners can be implemented by any user.
Source: https://blog.seeburger.com/holistic-integration-in-it-from-silos-to-synergies-in-the-logistics-industry/