SAP’s roadmap for integration is a great way for them to communicate their plans. I can see how they are responding to customers’ needs in this area. And it made me think about integration through the years. Integration has always been a central issue and challenge in working with administrative IT systems.
The first IT systems were built to address specific purposes, without much concern for interoperability. For example, you had an HR system separate from Payroll and separate from Benefits. And then there were General Ledger systems, Purchasing systems and AP systems. The business processes then aren’t much different from today – we still recruit, hire, benefit, pay, move, and separate employees. Those processes cut across all the specific systems, and those systems weren’t necessarily built to work together. We had interfaces between systems that ran periodically and people who built, managed and reconciled them. The processes had extra complexity to work across those disparate systems. Automating processes had some benefits for sure, but it came at the cost of some complexity for the business to manage the integration. It was great, until it wasn’t.
Then integrated systems came along – SAP probably the most popular among them. Now HR, Payroll, Benefits and so on all shared the same data model, database and programming environment. We could have a more unified process because of that integration. We didn’t need as much effort to monitor and reconcile interfaces but integrating all those business processes took a lot of effort. If HR wanted to make a change in their data or processes, it had to be coordinated with Payroll, Benefits and the rest of the HR domain. A change for one component could ripple through the whole system and create additional work. The complexity of integration moved from interfaces to the shared data models and processes. But it was great, until it wasn’t.
After a while, we decided that cloud systems were better, so we built those. They sort of resembled the first IT systems – built on their own data model for a specific purpose. In the HR space, Recruiting systems led the way. Then HR administration systems followed – with their own data models, mostly, separate from Recruiting. And then training systems and so on. Being in a multi-tenant cloud system was great, and the new user experiences were nice, but integrating the cloud systems together could be painful. We called them interfaces before, now we call them integrations. Different data models and different processes create complexity. It was like the early 90’s all over again. We have people who specialize in integrations, who monitor integrations, and who reconcile systems. And it’s been great, generally, but now we want more.
Why should customers have to spend a lot of time and effort to stitch together the SAP systems they use? I think SAP has heard that and we are now seeing a renewed focus on integration. I like that. Customers have been putting a lot of effort into integrating SAP’s systems, so it’s good now that SAP is going to deliver more of that. What’s really happening though is that the complexity of managing the different data models and processes among systems is being resolved with additional technology from SAP. And the technology is complicated. And it will likely still require customer resources to implement, manage, or transition to. I’m sure it’s going to be great.
I’m fortunate to have worked with IT systems in these different phases of change. There was always complexity to manage among different business functions and the key was to reduce the business process complexity as much as possible so that the end result was simpler to manage while still meeting all the business needs. It was true in the early 90’s and it’s true today. It was difficult then, and it’s difficult now.