Enterprise Resource Planning System Integration

Functional silos and their evolution

Functional silos are defined as individual business functions or departments in a bigger organization. They operate as impartial units whose strategies and work plans run parallel to the bigger business functions (Jørgensen, Remmen, and Mellado 713). Functional silos evolved as organizational development and diversification increased to the extent of making centralization of authority and goals very difficult. Further, when organizations expanded into different departments that run diverse activities, it became important to have department-specific goals, which allowed the organization to use unique methods and approaches that differed from those of other departments to achieve the desired results. Such departments nowadays operate independently from other subdivisions or the main organization to meet their specific goals and targets.

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Centralized, decentralized, and distributed IT architectures

Centralized systems are databases that are located, stored, and maintained on single servers, mainframes, and supercomputers. All data, software, and resources are served on a single server. They are accessed remotely via dumb terminal computers. The decentralized systems are based on multiple computers where each computer has its information and software needed (Oz 13). In decentralized systems, each computer has control over what takes place on its system, although such systems have the disadvantage of inhibiting real-time cooperation. The distributed IT architecture refers to a system that combines the properties of centralized and decentralized structures. In this case, while computers have their software and tools, they also have the capability of accessing and sharing data from a centralized network location (Coronel, Morris, and Rob 32). From the discussion above, the distributed IT architecture is preferable for ERP since it combines the properties of both centralized and decentralized systems, which allow the flexibility of sharing and independence, thus ensuring high levels of integrity and quality of work delivery.

Horizontal and vertical levels of systems

Horizontal Level Systems

  • Book-keeping
  • Human resources
  • Promotion
  • MIS
  • Production

Vertical Levels of Systems

  • Premeditated operations
  • Strategic administration
  • Practical Management

Steps involved in systems integration

The following are five steps that are involved in the process of system integration:

  1. Standards and conformity: determination of the set of standards are required for database support
  2. Resource arrangement: This process involves the identification of the required software and hardware, as well as seeking technology complaint vendors
  3. Legacy systems support: This step requires one to develop support for older systems.
  4. Middleware equipment: This step comprises short-term solutions for solving the problem in the databases to manage legacy systems
  5. Confirmation and approval guidelines: This step provides the platform where users of a system can create accounts to access it. It also provides an opportunity for users to protect and hide sensitive information in the system

The role of ERP systems in systems integration

ERP structures are important in system integration process as they allow organizations to focus on business processes and practices as opposed to focusing on system functions alone (Oz 9). ERP also provides an opportunity for business departments to work independently while retaining important linkages with others, thus effectively removing the need for functional silos. The use of ERP ensures that companies eliminate the need for legacy systems while at the same time promoting elasticity and reliability (Laudon and Laudon 53).

The world of business is marked by various organizations that have had to adopt new operation strategies to maximize their profitability. An example of a company that broke the functional silos to integrated systems is General Motors. There were various challenges that the company faced in physical and logical integration processes. For instance, ensuring that the management of various departments could be streamlined to share information openly with others was a major challenge. Secondly, ensuring that the systems were working to support the integration was another major issue. Lastly, the company faced many ethical issues concerning the use of the integrated systems because of its electronic transactions among other issues. From these challenges, other organizations can learn from General Motors, especially when it comes to issues that they can encounter in the process of adopting physical and logical system integration strategies.

Why functional silos are not appropriate for today’s organization

Functional silos promote autonomy and independence of business units under the same organization (Turban 22). Such an approach encourages the separation of business units from the core business units, thus leading to separate goals and strategies that are not influenced by the core organization. However, in today’s business world, such approaches are counterproductive since the strategies and goals of individual units are important towards the achievement of the overall organizational goals (Coronel, Morris, and Rob 68). Therefore, it is important to have in place systems that promote cooperation between various departments while ensuring that the goals and strategies of each department are aligned with the overall organizational goals, vision, and mission. The age of technology requires decisions to be made fast and accurately while considering all organizational factors and impacts of such decisions. Functional silos inhibit this process due to their independence and lack of connection with other areas of the organization (Jørgensen, Remmen, and Mellado 718). As such, functional silos are not appropriate for today’s business environment.

System integration challenges faced by UPS

Following the acquisition of more than 30 companies, the high number of separate business entities that the company had made it difficult for system integration to be successful. The lack of integration between the various systems, which had 14 mainframes, 2755 midrange computers, 6200 servers, and more than 260000 Personal computers made the process of integrations even more difficult and challenging (Motiwalla and Thompson 124).

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Systems integration solutions at UPS

To solve the problems faced by UPS in the system integration process, it is important to reduce the number of decentralized systems that are in place at the organization. The organization chose to establish consolidated data centers that allowed data from all its subsidiaries to be centralized for ease of access and management (Motiwalla and Thompson 126). The focus on the business objectives, as opposed to technology, allowed the challenges that the organization faced to be solved.

Advantages of systems integration for UPS customers

The system integration at UPS is highly advantageous to customers. Firstly, the system allows customers to track their packages around the globe with ease through a single web-based system (Jørgensen, Remmen, and Mellado 715). Such an approach is highly beneficial since it allows customers to get real-time information on the status of their packages without necessarily enquiring directly from customer care representatives at the organization. It also offers convenience to customers since they can access the status of their packages wherever they are, thus saving time and money.

Works Cited

Coronel, Carlos, Steven Morris, and Peter Rob. Database systems: design, implementation, and management, Boston, MA: Cengage Learning, 2009. Print.

Jørgensen, Tine, Arne Remmen, and Dolores Mellado. “Integrated management systems–three different levels of integration.” Journal of cleaner production 14.8(2006): 713-722. Print.

Laudon, Ken, and Jane Laudon. Management Information Systems: International Edition, New York, NY: Pearson Higher Education, 2009. Print.

Motiwalla, Luvai, and Jeffrey Thompson. Enterprise systems for management, Upper Saddle River, NJ: Pearson Education, 2012. Print.

Oz, Effy. Management information systems, Boston, MA: Cengage Learning, 2008. Print.

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Turban, Efraim. Decision support and business intelligence systems, Delhi, India: Pearson Education India, 2007. Print.

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