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Is Poor System Integration Hurting Your Bottom Line?

By Avetta Marketing
August 29, 2022
6 minutes
Is Poor System Integration Hurting Your Bottom Line?

Every organization runs on multiple business systems to function, many with hundreds of individual applications that aren’t integrated. Syncing all those systems is a challenge, but not doing so can be extremely costly.

According to one recent report, 57% of IT decision-makers lose up to $500,000 of revenue each year due to poor system integrations. In fact, 4% of those lose up to $1 million annually. One report found that nearly 90% of organizations currently have a data backlog that prevents them from keeping up with the integrations they require.

Not every system needs to be integrated, but when your core business solutions don’t talk to each other, huge risks and inefficiencies emerge, especially when it comes to your supply chain.

In this blog, learn why this issue is so important and how to tackle this common technology challenge.

Risks of Skipping Supply Chain System Integration

When key supply chain data is scattered among siloes, it can lead to risks that include:

  • Slow, manual processes that extend time-to-market
  • Inaccurate decisions leading to excess inventory, shortages, and other issues
  • Misalignment on key updates (e.g., promised vs. actual lead times)
  • Hindered risk management efforts
  • Increased instances of human error
  • Decreased customer loyalty and trust due to lack of transparency
  • An inability to scale as your company grows
  • Loss of orders and revenue
  • Longer onboarding times for new supply chain partners

Together, these issues lead to one overarching problem: Lower supply chain value.

Without a complete, unified picture of how your supply chain is performing, your business could experience inefficiencies that increase redundancies, slow down decision-making, and impede teamwork.

Benefits of Integrated Application Architecture

While the journey toward full system integration can be demanding, companies that pursue this alignment can enjoy many benefits.

Streamlined, Automated Data Management

With integration, data retrieval and processing aren’t only easier across all subsystems, they’re more accurate and fluid.

When employees have a single system for accessing supply chain data, they can work faster and collaborate more easily. One platform also gives executives visibility into every aspect of their supply chain, so they can make more informed decisions and prevent issues before they occur.

Improved Performance Quality

If chasms exist between your organization’s key departments, productivity can’t help but suffer. Often, this occurs when data in one subsystem changes but those updates fail to translate to other systems.

In turn, those other systems can only catch up when employees manually enter the new information into their data stores. These repetitive actions are time-consuming and leave a wide margin for human error.

Real-Time Data Accessibility

Decision-makers require access to real-time data updates. Without them, they’re forced to work off inaccurate or outdated information that could steer them in the wrong direction, potentially carrying serious consequences for your supply chain.

For instance, when examining supplier data, companies may have one system that tracks purchase orders, a few systems that track various risk data, and other applications at play. Many stakeholders don’t take the time or have the training to log into multiple systems to make a decision, increasing the possibility of making a poor business move, such as approving a supplier PO because the individual didn’t also see critical risk data in another system. Getting all relevant data into one system ensures oversights don’t occur.

Stronger Reporting and Compliance

When business data is more accessible, it’s easier for organizations to stay compliant with industry-specific reporting requirements.

Take ESG and the rise of eco-conscious investing. Traceability has become a chief concern among manufacturers, who are asked to disclose certain information about the origins of their offerings.

Many companies lack the ability to track their commitments to the ESG sector due to bad data. According to one survey, 98% of global, institutional investors try to take ESG and sustainability data into account before making a business investment; however, 83% acknowledge a lack of data as their chief obstacle to effectively conducting these assessments.

It can be difficult to mine through tomes of information to understand the full impact of operational activities, especially with different reporting standards and metrics. Systems integration simplifies this process, so all insights are available in one place.

Cost Conservation

Systems integration reduces or eliminates the need for routine data entry while decreasing administrative and data storage costs.

Integration also helps companies make better use of the resources they already have at their disposal, rather than underutilizing key tools because they aren’t properly integrated or accessible.

The Key to Effective System Integration

The easiest way to effectively integrate your key business systems is by starting with the right partners and vendors. Don’t commit to purchasing a new system without a plan for how to integrate it into your organization’s other critical applications.

Ask about integration options for your existing systems, whether via two-way APIs that your IT team can take advantage of, or pre-built connections to easily link applications. Make sure the integration is a step in implementing your new system, so data flows seamlessly from the start.

You never have to worry about system integrations when you partner with Avetta. Avetta offers a comprehensive view of your supply chain risk all in one spot and we also know the importance of integrating a supply chain risk management platform with other business systems, such as procurement platforms, ERPs, and more.

For example, if you use Coupa to manage your supplier procurement, you can easily integrate Avetta risk data into that platform for easy centralization of all relevant supplier data.

Interested in learning more? Request a demo today and discover how Avetta can work seamlessly with your existing business platforms to meet your company’s needs.

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