Application Integrations and the Integration Platform
In the digital age, it could be said that the idiom “sharing is caring” is a ruling principle, since one of the most effective ways for businesses to accelerate digital transformation is application integration. Why should businesses waste resources on developing their own solutions to solve business problems, when they can simply implement software applications that already solve these problems effectively?
However, finding the right software applications to automate business processes is one part of the challenge. A greater part of the challenge is getting these diverse applications to work together and exchange data seamlessly. This is why application integration is one of the most crucial elements of business growth in the digital age. Yet, an even greater challenge is finding the right solution or platform for application integration.
To explore application integration and the need for an integration platform within the context of these challenges, this blog will explore:
- What is application integration?
- What software applications should businesses integrate?
- What are the different types of application integration solutions?
- The business benefits of using an integration platform for application integration
What is application integration?
Application integration refers to connecting different enterprise applications and SaaS (Software as a Service) solutions, across on-premises and cloud environments, in order to enable the exchange of data and services. By enabling diverse applications to work together, application integration significantly improves process automation, reduces the risk of human error, and most importantly - helps businesses scale their operations rapidly while minimizing cost.
What kind of software applications do businesses need to integrate?
In the past decade, there’s been an explosion of new cloud apps and SaaS solutions being implemented across business departments en masse, to digitalize and automate all kinds of business processes. There are cloud apps and SaaS solutions that every business process and department can integrate, in order to optimize data sharing and process automation across the Value Chain of an organization.
From Operations, Logistics, Marketing, Sales, Customer service, Procurement, HR, and all other departments, there's a plethora of software applications that businesses implement to automate processes:
- ERP (Enterprise Resource Planning) systems like SAP, Microsoft Dynamics 365, or Exact Globe help track and manage inbound and outbound logistics, as well as human resource management.
- E-commerce platforms like Adobe Commerce (formerly Magento), Big Commerce, and Shopify enable businesses to build web shops to digitally sell and market their products.
- PIM (Product Information Management) systems like Akeneo and Pimcore help centralize, store, enrich, and update product information.
- CRM (Customer Relationship Management) systems like Salesforce and Hubspot help track customer data, improve customer support, and automate marketing initiatives at every business touch-point.
- EDI (Electronic Data Interchange) enables the paperless exchange of B2B information for procurement or sales in a standard electronic format, ensuring data accuracy and faster transactions.
- Channel Marketing Software like ChannelEngine and Channable help simplify the process of managing and optimizing e-commerce product listings across multiple channels like Amazon, Alibaba, and Bol.com.
There is also WMS (Warehouse Management System) software that helps automate outbound logistics, AI solutions like OpenAI being leveraged for e-commerce, BI (Business Intelligence), and many more systems that businesses can connect with to accelerate digital growth.
It is estimated, organizations with 1,000+ employees use 150+ SaaS applications and those with fewer than 50 employees use an average of 16 SaaS solutions. Less than 30% of these apps are integrated.
Why should businesses integrate the applications they use?
Another popular idiom that comes into play here is the one that states: “United we stand, divided we fall”. Implementing software applications in a disconnected and scattered manner across business departments leads to data silos and fragmentation, process inefficiencies, increased risk of data breaches, difficulties in collaboration, data duplications, and data entry errors.
Application integrations help bridge these gaps by establishing seamless communication channels between different applications. By doing so, organizations can eliminate manual data entry, reduce errors, and gain a holistic view of their operations. For example, integrating an e-commerce platform with a PIM system will help enrich product information, enhance product content management, and streamline catalog updates for a business’s webshop.
However, this leads to a greater challenge which involves answering the following question - what is the best solution for businesses to integrate their applications?
What are the different types of application integration solutions?
Over the past few decades, businesses have integrated applications using various methods and solutions. Here are some of the most common approaches for application integration:
- Point-to-Point integrations:
This is a traditional approach that involves building one-to-one connections between applications with custom code. While this method can be effective for connecting a small number of applications, it lacks scalability and adding new applications can lead to IT spaghetti problems and data silos. Above all, this method is expensive, time-consuming, can only be managed by senior developers and coding experts, and often lacks process automation capabilities.
Read a cost-optimization comparison on point-to-point custom code integrations.
- Traditional middleware integration:
This involves implementing on-premises or cloud-based integration software as a middle layer between applications, to facilitate data exchange and collaboration of services. This is a more scalable solution for application integration, it provides a centralized hub for managing and monitoring data flows, and it enables businesses to integrate on-premise systems with multiple applications in a scalable way. However, traditional middleware platforms like ESB (Enterprise Service Bus) solutions that require the installation of on-premises hardware, were built to first integrate on-premises systems, applications, and data sources, and then facilitated cloud app and SaaS integrations later.
Read more about the different types of middleware integration solutions.
- The integration Platform as a Service (iPaaS):
An iPaaS solution is either a no-code or low-code, “As-a-Service” cloud-based platform for application integration. As an API-based middleware solution, the iPaaS helps seamlessly integrate multiple systems, SaaS, cloud apps, or data sources. It encompasses broader integration capabilities beyond just SaaS applications, including on-premises systems, databases, APIs, and IoT devices. It enables businesses to create, monitor, and manage all their software application integrations and data flows from one user-friendly web interface without custom code. Rather it provides either click-and-configure options or drag-and-drop tools to develop, orchestrate and modify integrations. Centralizing data from all connected applications on a dedicated cloud space, an iPaaS facilitates real-time data exchange and synchronization. The iPaaS also provides flexible data transformation features and the ability to build complex workflows to automate business processes across all connected systems
Read more about how an integration platform (iPaaS) helps automate application integrations.
The business benefits of an integration platform for application integration
The iPaaS (integration Platform as a Service) is a next-gen API-driven solution that is developed to integrate multiple SaaS, cloud apps, and data sources, and to orchestrate unlimited data flows (depending on the iPaaS vendor). Certain iPaaS solutions like Alumio also provide hybrid integration capabilities and special connectors or plugins to integrate cloud applications with popular on-premises systems such as SAP ECC.
As a comprehensive solution for managing applications, the iPaaS also helps improve Time to Market with integrations, lowers ownership and operational cost, and helps increase ROI through a number of integration benefits:
- Full integration visibility
All data flows of integrated applications are made visible and accessible on a user-friendly interface, preventing black box issues and enabling easy configurations.
- Real-time data exchange
Ensure data is synchronized and processed in real-time, flexibly transform data, and utilize data mapping and routing to reduce duplication and improve accuracy.
- Business process automation
Reduce manual work and data entry by integrating applications to automate processes like product optimization, hiring, billing & invoicing, inventory management, marketing, customer support, and more.
- Automated error detection
Robust monitoring and logging system helps swiftly detect and notify integration errors and API conflicts in real-time, saving cost and time on troubleshooting.
- Privacy compliance
Centralize all your data and connected applications on one secure, cloud space, get full data control, and comply with key privacy legislations like GDPR, SOC2, CCPA, FERPA, HIPAA, and more.
Apart from seamlessly connecting multiple applications, an integration platform can help orchestrate seamless omnichannel e-commerce integrations. It can also help connect and streamline data exchange across the Value Chain of manufacturing and supply chain businesses.
In conclusion, whether you're aiming to automate business processes, enhance customer experiences, or enable data-driven decision-making, application integrations and integration platforms are key to unlocking new possibilities in the digital era.
Want to learn how an integration platform takes application integration to the next level? Read the case study on how Verfwinkel.nl, a leading paint and supplies retailer in the Netherlands used the Alumio integration platform to seamlessly integrate four applications (ERP, E-commerce, PIM, and WMS) and automate workflows across the connected systems.