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2017-05-31

Are You in Danger of Being Stranded on Islands of Automation?

Are You in Danger of Being Stranded on Islands of Automation? (Part II)

Islands of Automation is a growing Information Technology (IT) problem and it occurs because of a haphazard approach towards IT infrastructure and planning. It is a direct result of complex & unconnected setup of applications, systems and databases and due to lack of interdepartmental coordination, where isolated business systems fail to support existing & new business requirements. This problem is relevant to medium to large businesses with diverse IT setup due to rapid growth requiring multiple new applications and systems or due to mergers and acquisitions. To prepare a full-fledged and continuous integration strategy, organizations must categorize their scattered technologies & processes and analyze their distinct integration problems & needs.

Enterprises face a lot of operational challenges when there is growth in their IT system capabilities and they don’t have a systematic way to maneuver and manage them. Organizations trying to restructure their IT infrastructure, which have operated since ages with disparate systems in their facilities, face treacherously difficult challenges while managing existing business workloads spread across many platforms. Seamless exchange of data becomes a self-contained problem which requires a long range and comprehensive integration solution. Islands of Automation occur when applications and systems that contain critical business data do not synchronize with other systems causing data consistency issues between systems-of-record and it is unclear what is the single source of truth.

Here are some scenarios where Islands of Automation causes increase in batch cycle time, material losses, delays, diminishing profits, compliance errors, and increased operational & R&D cost.

HRMS Systems Integration: A wide variety of users utilize the Human Resource Management Systems (HRMS) including HR administrators, managers, supervisors and even senior C-level executives. Problems emerge when IT teams fail to integrate this HR data for getting analytical insights on personnel costs, payroll information, resource utilization, hiring plans, talent management, skills alignment, performance analysis, appraisals and feedback, compensation tracking, training needs, succession planning, etc.

Disconnect between CRM & ERP Systems: The ERP and CRM system disconnect is a business obstacle as well as an evergreen challenge for IT teams. Finance, accounting and operations teams prefer a robust and proven ERP system to run their business while sales and marketing teams usually prefer a separate intuitive, easy and mobile friendly CRM application. Different CRM and ERP systems are on different versions and have different upgrade cycles causing continuous integration between them to be a challenge. With specific connections in ERP and CRM systems it becomes difficult to integrate them with a cloud, mobility, and new data types. With badly coupled systems, supporting data transformation and data conversion becomes extremely brittle. Symptoms of Islands of Automation in this case show up when there are data problems and mismatches in customer profiles, contact data, shipping information, order details, pricing, discounts, order information, order history, delivery dates, invoice reconciliation, receivables tracking, returns, and refunds management etc.

Order Entry & Processing: Business users develop data silos when they use one system for placing customer orders and another system for processing shipments. If the shipping address is entered incorrectly, then the products can be shipped to wrong address. This leads to unsatisfied customer experience and penalties from shipping company as well.

Website and Order Fulfillment: Companies deploy different kinds of eCommerce systems and web-based systems for simplifying order taking and fulfillment operations. However, they lose efficiency due to poor handling of data for order fulfillment. The users end up entering the data manually and inaccurately into order processing systems because of lack of integration between website, ecommerce systems and ERP applications.

Cloud and On-premise Applications: Due to numerous advantages, organizations are increasingly signing up to use cloud-based applications. But organizations are less sure that how these new technologies will work together with existing legacy on-premises applications. Because of different technology frameworks, business users face problems in data sharing, security, and integration.

Ad-hoc Processes for Customer Data Onboarding: Onboarding new customers, partners or stakeholders with ad-hoc processes is intensely challenging. Data onboarding is typically knowledge intensive, and the negative impacts can be catastrophic if it is undermined. With ad-hoc processes, enterprises face huge difficulties in moving the processes as per the customers requirement. These operational inefficiencies lead to cost overheads, regulatory compliance violations, decreased customer satisfaction and monetary penalties.

Disjointed Procure-to-pay Processes: Purchase-to-pay process involves a series of diverse steps and multiple operations. This process grows exponentially as a business expands. Hence, mushrooming business IT systems for approving requisitions, purchase order issuance, price quote review, purchase approval and payables management pose impending business challenges. Multiple and disjointed procure to pay processes are not only time and resource intensive but also lack transparency. All this leads to authorization errors, lack of communication, documentation errors and delays in procurement.

Inefficient Order-to-Cash Process: Order-to-Cash involves receiving and fulfilling customer requests for goods or services. It usually follows the end of sales cycle, when an order has been received from the customer. The process spans customer provisioning, product or service delivery, sending invoices, and receiving payment (cash). Lack of integration with customers as well as internal applications in Order-to-Cash processes results into delayed revenue, delayed service, and unhappy customers.

IT-driven reporting and dashboards: Business users are heavily dependent on IT staff to aggregate data from multiple locations, generate reports for analysis, and decision making. This results into delays and inefficient use of IT resources and is driven by lack of integration between systems of record. In a competitive environment, organizations must find easy ways to streamline the enterprise-wide electronic data interchange process.

Multiple Copies of Same Information: Most applications don’t provide a simple way to leverage the knowledge residing inside the business applications. A key symptom of “Islands of Automation” is that the same business data resides in multiple applications and databases and it soon becomes impossible to keep all versions of the data to be updated and current. This results in inconsistencies and mistakes that are expensive for business. The drug discovery process is a good example in this regard which can get possibly delayed when research teams fail to exchange the research data with regulatory authorities.

To find out whether your organization has islands of automation, identify these above-mentioned scenarios where organizational data has limitations related to access and quality. Identifying these areas will help you to identify weak links and determine opportunities for optimization. In our next blog, we will take a closer look at how to integrate “Islands of Automation”.