IT031 – SIA 1

INTRODUCTION TO
SYSTEM INTEGRATION
AND ARCHICTURETURE
Prepared by: Frederick Revilleza

IT031 - System Integration and Architecture 1

 Introduction
IT031 – SIA 1

• Many systems are built to easy, improve and transform

organizations.
• Some organizations have many departments which run
Prepared by: Frederick Revilleza

systems which are independent of each other.

• And systems built sometimes, may not have an abstract view
(architecture) which leads to failure of system interoperability.
• There is need to have architectural view of the system as a
priority to help in the design to avoid the likeliness of system
failure.
 Introduction
IT031 – SIA 1

• Besides after the system has been designed and developed in

consideration of the size of the organization, i.e. most especially
when the organization is large, need is required to integrate such
systems to ensure flexibility, speed, cost, standardization, data
Prepared by: Frederick Revilleza

integrity, reliability and robustness.

• This can help Information Technology(IT), energy and financial
services industry among others to have an easy-to-use integrated
system.
 System Integration
IT031 – SIA 1

• Systems Integration means that you allow a heterogeneous Information

System (IS) to communicate or integrate and share information (or data)
seamlessly with one another.
Prepared by: Frederick Revilleza

• Systems Integration is a key issue for an organization for its growth

• Management needs to pay close attention to this issue.

• Enterprise Resource Planning (ERP) Systems are a major kind of information

system allowing organizations to integrate different systems into one
organization-wide application with an integrated database management
system.
 Functional Silos
IT031 – SIA 1

Typically organizations are structured into

division and department based on functionality
of each division and department.
Prepared by: Frederick Revilleza

This organization structure tends to create ‘Silo

Thinking’, each department stands alone with
less or no interaction with other department
within the same organization.

Business processes, cut across these functional

silos. Where different activities in a process
require different skills, the process is likely to
involve several people and departments
 Functional Silos
IT031 – SIA 1

Silos are basically compartmentalized operating units isolated from

their environment.
• Horizontal Silos
Prepared by: Frederick Revilleza

• The POSDCORB ( Planning, Organizing, Staffing, Directing, Coordinating,

Reporting , and Budgeting) categorization by Luther Gulick led to set of
formation organization functions such as control management, supervision
and administration starting in late 1930s.
• Classification of organizations into departments like Accounting and Human
Resources, reflects the breaking of complex task into smaller manageable
tasks that could be assigned to a group of people who could then be held
responsible.
IT031 – SIA 1
Functional Model of Organization
(POSDCORB)

Organization
Prepared by: Frederick Revilleza

Planning Organizing Staffing Directing Coordinating Reporting Budgeting

 Functional Silos
IT031 – SIA 1

• Vertical Silos
• Organizations also divided roles in hierarchical layers from strategic planning
to management control and operation control.
• CEOs and Presidents plan long-term strategy, midlevel management focuses
Prepared by: Frederick Revilleza

on tactical issues and on the execution of organizational policy whereas the

lower-level management task is to focus on the day-to-day operations of the
company.
• As organizations get big and complex, they tend to break functions into
smaller units and assign staff the responsibility for these activities allowing
them to manage complexity as well as specialize in activities that enhance
productivity and efficiency.
 Functional Silos in Organization
IT031 – SIA 1

• Silo environment is inefficient, inaccurate

and expensive.
• Information is captured and re-entered
several times and is not available in real
time.
• Silo environments hamper enterprise
Prepared by: Frederick Revilleza

decision making, because key information

never makes it out of the different pockets of
the organization in time for decision maker.
• In Silo environment, only selective
employees from that department have
access to information, customers, partners,
and suppliers are dependent on there
• Example: UPS package
employees to provide them with answers.
tracking system.
 Hierarchical Model of Organization
IT031 – SIA 1

Strategic
Management
Prepared by: Frederick Revilleza

Tactical
Management
Functional Operations
 Functional Silos in Organization
IT031 – SIA 1

• In addition to serving the different management levels, IS also

supports major business functions, such as manufacturing, marketing,
accounting, finance, and HR.
Prepared by: Frederick Revilleza

• Each functional area has different information needs and report

requirements.

• Each functional area in organization also has multiple levels of

management, each requiring different levels of analysis and details of
information.
IT031 – SIA 1
Business Processes and Information
Systems
• Business process is a group of activities or tasks that are coordinated for
achieving a business goal (e.g. ordering supplies, targeting customer, designing new
products, etc.).
• Business processes refer to the manner in which
Prepared by: Frederick Revilleza

• Work is organized, coordinated, and focused to produce a valuable product or

service
• Is a concrete workflows of material, information and knowledge (set of activities).
• Ways in which organizations coordinate work, information and knowledge and the
ways in which management chooses to coordinate work.
• Every business can be seen as a collection of business processes.
• Many business processes are tied to a specific functional area. For example, sales and
marketing area function would be responsible for identifying customers, and human
resource's function would be responsible for hiring employees.
IT031 – SIA 1
Business Processes and Information
Systems
• Other business processes cross many different functional areas and
require coordination across departments. For example, fulfilling
customer order: First sales department would receive a sales order.
The order will pass first to accounting to ensure the customer can pay
for the order. Then, production department pull the product from
inventory and finally product needs to be shipped.
Prepared by: Frederick Revilleza

• Can you provide another example

Fulfilling a customer order involves a complex set of steps that requires the close
coordination of the sales, accounting, and manufacturing functions.
 Prepared by: Frederick Revilleza IT031 – SIA 1

Matrix Structure of Organization

14
 Business Process and Silos
IT031 – SIA 1

• The problem of functional silos gave birth to business process re-engineering (BPR).
• Organizations are re-oriented their management towards improving the efficiency and effectiveness
by focusing on business processes such as selling products, product development, order processing,
etc.
Prepared by: Frederick Revilleza

• Business process provides an alternative view of grouping people and resources focusing on an
organization’s activity, which involves interactions between sales , warehousing and accounting
functional areas, as the work progresses from initial sales order to collection of payment from the
client.
• The cross-functional business process can involve people and resources from various functional
departments working together, sharing information at any level of the organization.
• Business process has moved management thinking away from a functional department to business
process.
• This organizational evolution from functional silos to business processes and to even customer
centric approaches has had a big impact on the evolution of information systems.
15
 Information Systems in Organizations
IT031 – SIA 1

• Information Systems are a critical component of a successful

organization today.
• Information Systems play a major role in primary and secondary
activities of an organization’s value chain.
Prepared by: Frederick Revilleza

• The evolution of IS suggests that its role has generally been to support
evolving information needs of the organization,
• Information Systems provide a high level of computer automation to
support business functions such as: Accounting, Finance, Marketing,
Customer Service, Human Resource Management, Operations,
Manufacturing.
IT031 – SIA 1
Evolution of Information Systems in
Organizations
• As business changes and expands, the results is sometimes lead to a wide variety of
Information Systems and computer architectures creating heterogeneous independent
nonintegrated systems (silos).
• These systems lack control and configurations, so they become breeding ground for
Prepared by: Frederick Revilleza

inconsistency, inaccurate and incompatible data and ultimately lead to mismanagement.

• A silo information system is inefficient, inaccurate, and expensive. These systems can not
share data therefore require users to access multiple systems to integrate the data
manually.
• Silos systems focus on individual tasks or functions or both, rather than on process or
team. This make it very difficult for organization to be customer-centric because data can
not be assimilated from different functional areas to address customer needs.

17
IT031 – SIA 1
Evolution of Information Systems in
Organizations
• Organizations have been designed around functions for long time (e.g., sales,
manufacturing, and HR). These functions are important as they provide a structure by
which an organization functions runs smoothly.
• The system creates bottlenecks for everyone and information is not available
in real-time.
Prepared by: Frederick Revilleza

• The evolution of IS suggests that its role has generally been to support evolving
information needs of the organization.

18
 Prepared by: Frederick Revilleza IT031 – SIA 1 Information Systems Evolution Chart

19
 Information Systems Architectures
IT031 – SIA 1

• Three major types of information systems

architecture have been commonly used in
organizations: Centralized, Decentralized
and Distributed systems architecture.
• Centralized approach utilizing the
mainframe computer (the central
Prepared by: Frederick Revilleza

computer) to host all application system

and data resources of the organizations.
• With decentralized approach, each user
had a personal computer.
• Distributed architecture allows sharing of
applications and data resources between
the end user and the server
computers(centralized)

20
IT031 – SIA 1
IS as Categorized by Functional and
Hierarchical Models
Prepared by: Frederick Revilleza

21
IT031 – SIA 1
IS as Categorized by Functional and
Hierarchical Models
• Above system infrastructure (e.g. operating systems, databases and
networking) the lowest level of IS pyramid which consists of:

• Office Automation System (OAS): support the activities of employees

Prepared by: Frederick Revilleza

• Transaction Processing System (TPS): record detailed information in all the

major functional areas.
IT031 – SIA 1
IS as Categorized by Functional and
Hierarchical Models
• They support the organization's operations and record every transaction,
whether it is a sale, a purchase, or a payment. They are often categorized
by the functional areas in the organization (sales, purchasing, shipping,
etc.)
Prepared by: Frederick Revilleza

• Management Information System (MIS): reporting systems that categorize

and organize information as required by the midlevel managers. These
report can be sales by product for a quarterly period.
• Decision Support Systems (DSS): are analytical systems that use
mathematical equations to process data from TPS to assistant managers in
conducting what-if analysis, identifying trends and in generally assisting in
making data driven decisions. (e.g. go-seeking, pivot tables, etc using
spreadsheet or more sophisticated such as OLAP software).
IT031 – SIA 1
IS as Categorized by Functional and
Hierarchical Models
• Expert System also assist managers in their decision making using
qualitative analysis that captures problem solving to identify
solutions.
• Executive Support System (ESS): provide visual dashboard of
Prepared by: Frederick Revilleza

strategic information to top level management in real time (snapshot

of the organization performance). These system are categorized for each functional area of the
organization.
 Prepared by: Frederick Revilleza IT031 – SIA 1

visual dashboard of strategic information

25
 Systems Integration
IT031 – SIA 1

Integrated systems allow companies to accomplish something that has

provide most to date: the linking of demand and supply side functions
in a way that enables a quick and flexible response to changes.
Logical (human level) Integration
• Develop information systems that allow organizations to share data
Prepared by: Frederick Revilleza

with all of its stakeholders based on need and authorization. It means

allowing access to a shared data resources by people from different
functional areas of the organization.
• Management needs to change organizational structures, processes,
and employee roles and responsibilities.

26
 Systems Integration
IT031 – SIA 1

Physical (technical level) integration

• Provide seamless connectivity between heterogeneous systems.
• Business process reengineering involves changing the mindset of the employees
in the organization, encouraging and enabling them to do their tasks in a new
way.
Prepared by: Frederick Revilleza

• Shifting the focus of employees from achieving the departmental goals to

organizational goals is an essential task for management.
• It also requires a changes in traditional hierarchical management structures that
are purely functionally oriented.
• Teamwork is an essential component if organizations want to break functional
silos and have workers from all levels of management collaborate on solving
organizational problems.

27
 Steps in Integrating Systems
IT031 – SIA 1

Silos Functional Organizational structure and

organizations business processes

Step 1 Resource Take an inventory of the various hardware and software

categorization resources focusing on vendors, operating systems platforms,
IS architectures used in these resources.

Step 2 Compliance and Check whether the database and other technologies used in
Prepared by: Frederick Revilleza

standards various applications are such supporting standards as

JDBC/ODBC compliance for database.

Step 3 Legacy systems Develop a policy in support of older legacy applications.

support

Step 4 Middleware tools Middleware tools are essential for integration in the short
term if existing applications must be used by the
organization.

28
 Steps in Integrating Systems (Cont’d)
IT031 – SIA 1

Step 5 Authentication and Single sign-on policy for application and data access
authorization because all employees and external partners will need access
policies to an integrated system from anywhere, anytime.

Step 6 Centralized IT services The IT staff needs to be able to support all applications and
and support platforms with a centralized IT help desk support.
Prepared by: Frederick Revilleza

Step 7 Back-up, recovery, and A good back-up and recovery system is essential if there is a
security system failure or a major disaster.

Step 8 Hardware and software Develop organization standards and policy on acquisition of
standardization new hardware and software which is aligned with organization
IT strategy.

29
IT031 – SIA 1
Benefits and Limitations of Systems
Integration
Benefits Limitations
Increased Revenue and Growth High Initial Set-up Costs
Prepared by: Frederick Revilleza

Leveling the Competitive Environment Power and Interdepartmental Conflicts (due to the
sharing of information)

Enhanced Information Visibility Long-term and Intangible ROI (Usually several

years)

Increased Standardization Creativity Limitations (Restricts Creativity and

Independence)

30
 ERP and Systems Integration
IT031 – SIA 1

• Enterprise Resource Planning (ERP) systems: are integrated, multi-

module application software packages designed to serve and support
several business functions across an organization.
• ERP system is a strategic tool that helps the organization improve its
Prepared by: Frederick Revilleza

organization and management by integrating business processes and

helping to optimize the allocation of available resources

31
 ERP and Systems Integration
IT031 – SIA 1

• ERP systems are typically commercial software packages that

facilitate collection and integration of information related to
various areas of an organization including finance,
Prepared by: Frederick Revilleza

accounting, HR, customer services, etc.

• ERP systems enable the organization to standardize and
improve its business processes to implement best practices
for its industry.

32
 ERP’s Role in Logical Integration
IT031 – SIA 1

• ERP systems require organizations to focus on business process rather

than on functions.
Prepared by: Frederick Revilleza

• ERP systems come with built-in processes for a wide variety of

common business functions.

33
 ERP’s Role in Logical Integration
IT031 – SIA 1

• An ERP system implements best practices via specific

built-in steps for processing a customer order in terms
of:
• order entry.
Prepared by: Frederick Revilleza

• routing through departments.

• communication of output to various parties.
• Example: Dell computers: Receive an order – divide the order by
major components and transmit to various units, partners and/or
suppliers-

34
 ERP’s Role in Physical Integration
IT031 – SIA 1

• Before installing the ERP system, an organization may have to

upgrade or install middleware or get rid of their legacy
system’s hardware and software.
Prepared by: Frederick Revilleza

• Integration is also required at the Data level (one database),

Client level (standardizing on all client platforms), and at the
Application level (common user interface design, back-end
access and back-up recovery plan).

35
 ERP’s Role in Physical Integration
IT031 – SIA 1

• A good ERP implementation improves operational efficiency

with better business processes that focuses on organizational
goals rather than on individual departmental goals.
Prepared by: Frederick Revilleza

• Improved efficiency with a paperless flow and electronic data

interchange (EDI) or business-to-business (B2B) commerce
environment with partners.

36
 Implications for Management
IT031 – SIA 1

• Silos do not work.

• Most organizations lose out in the long-term when information is not shared
in real time across the functional boundaries within the company.
• In today’s globally competitive environment, organizations have to compete
Prepared by: Frederick Revilleza

both on lower cost, and by providing better customer services through

alliances and partnerships with competitions.

• System integration has many hidden benefits.

• Allows decision making to be cascaded to all departments

37
 Implications for Management
IT031 – SIA 1

• Allows employees at lower-levels to make better decisions while interacting

with clients or partners.

• System integration has many challenges.

Prepared by: Frederick Revilleza

• Replacing old hardware and software

• Working with IT consultants in developing middleware
• Human challenges, such as impact on IT staff, department heads losing
control of data, and rumors of layoffs

38
 Implications for Management (Cont’d)
IT031 – SIA 1

• Systems integration raises many new ethical issues.

• Possibility of some employees exploiting information for personal advantage
and illegal access of information.
Prepared by: Frederick Revilleza

• Remedies can consist of:

• Develop policies on ethical usage of information.
• Install proper security software and hardware (like firewalls).
• Allocate resources for training and education on accessing information.

39
 Summary
IT031 – SIA 1

• Functional silos categorize an organization’s tasks and activities into

groups to improve efficiency and responsibility of work in the
organization.

• Silos can improve productivity, but they often lead employees to

Prepared by: Frederick Revilleza

achieve departmental goals rather than overall organizational goals.

• IS over the years have been divided horizontally by functions and

vertically by hierarchical levels.

• IS architecture has evolved from centralized mainframe architecture

to personal computers with distributed or client–server architecture.
40
 Summary (Cont’d)
IT031 – SIA 1

• In order for systems integration to be successful, organizations have to

focus both on the human or logical level and on the physical or systems
level.

• ERP systems thus make the process of systems

Prepared by: Frederick Revilleza

integration easier, but they are expensive and often require organizations
to start from scratch.

• System integration involves the whole organization, requiring top-

management support and resources for a long-term period. Management
must be ready to face the human and ethical challenges in a systems
integration project.
41
 Review Questions
IT031 – SIA 1

1. What are functional silos and how did they

evolve in organizations?
2. What is the relationship between organizational
functional silos and IS functional silos?
Prepared by: Frederick Revilleza

3. Compare and contrast centralized,

decentralized, and distributed IT architectures.
Which do you think is most appropriate for ERP
and why?
42