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Connecting puzzle pieces represents value of integration - seeing the big picture

What is application integration?

Application integration, or enterprise application integration (EAI), is the process of connecting independently designed software applications so they work together. Businesses rely on application integration to increase efficiencies, automate workflows, and enhance interoperability between different departments and teams.

 

The key to realising these benefits is real-time, bidirectional communication and operational data flows between independent applications – be that on premise or, increasingly, across cloud applications as well. With interconnected processes and data exchanges, businesses can orchestrate a variety of functions across all infrastructures and applications, often within a single user interface or service.

Diagram of Application Integration

Application integration connects all areas of your business – applications, processes, data, and much more – to help drive better operations and business decisions.

Application integration plays a fundamental role in business transformation

Application integration is key to addressing business challenges and driving change in your organisation. It can help to:

  • Optimise and automate business processes. Deliver a personalised experience to customers and employees across multiple digital touchpoints.
  • Future-proof the IT landscape. Extend legacy systems to support new business models, unlocking the value of existing investments with an API-first approach.
  • Comply with e-government and regulatory requirements. Reduce compliance burdens and meet regulatory compliance requirements with digital strategies that provide efficient document registration and delivery to government agencies.
  • Power e-commerce. Achieve a holistic view of customer engagements across multiple touchpoints to deliver a superior online buying experience.
  • Enable an API economy. Unlock unique services and create new business models for a competitive advantage.
  • Connect business to business (B2B). Optimise collaboration with business partners and expand market reach.
  • Create meaningful customer insights. Get a 360-degree view of your business and customers. Leverage data from sources inside and outside of the organisation to anticipate customer needs and preferences, increase loyalty, and drive competitive advantage.

Top 5 benefits of application integration

Application integration provides important benefits to businesses, including:

  1. Information sharing: Create a single point of access across individual systems to save time searching for information. Users from different departments access updated data, helping to improve collaboration between individuals from multiple departments. 
  2. Agility and efficiency: Business processes are streamlined, increasing overall efficiency. Communication is easier, and work takes less time and effort with better functionality and control. Companies can respond quickly to changes in the market, minimising impact to the business from unexpected disruptions.
  3. Ease of use: Enterprise application integration provides a single, consistent access interface to multiple applications, eliminating the need for users to learn different software applications. 
  4. Reduced IT investment and costs: By connecting processes across all channels and applications, new and old software systems are easily integrated, reducing initial and ongoing software investments. 
  5. Business process optimisation: With access to near-real-time data from applications available via a single click, organisations can more easily leverage robotic process automation and other process optimisation technology to facilitate automated workflows.

The evolution of application integration

The need to integrate different applications first came to bear in the 1980s after companies began using technology to connect on-premise business applications. For example, early enterprise resource planning (ERP) systems were commonly integrated with accounting, human resources, distribution, and manufacturing systems, as well as other back-end systems. Integration between these applications took place at the data level (between databases), performed largely by data integration tools and technologies, versus at the application level. 

 

In the 1990s, cloud-based software-as-a-service (SaaS) applications arrived and it became increasingly clear that a different method of integration was needed to optimise communication between these newer cloud applications and existing on-premises applications. Application integration technologies quickly evolved to handle the communication and harmonisation in this new hybrid landscape.

 

By the turn of the century, application programming interfaces (APIs) arrived – and provided businesses with the ability to easily syndicate data over the Internet, extending beyond organisational silos, and use data from even more sources for deeper, richer insights.

 

Today, companies of all sizes and industries use application integration to connect processes and data exchanges as well as to drive efficiencies for the business: 

  • Delaware Consulting International CVBA is a global consulting firm operating in 12 countries. The firm integrates various cloud systems to keep the business moving forward and to ensure smooth operations. After building a digital integration hub, the firm’s business grew by 487%.
  • Endress+Hauser reduces total cost of operations using an always-up-to-date B2B cloud integration platform, with no downtime and instant access to new features as they become available. After implementing the platform, the company increased project speed by five times, reduced costs, and achieved digital net sales of €50M through its B2B cloud integration.

How does application integration work?

Application integration maintains synchronisation between applications when an event or data changes. It is different from data integration in that it shares data versus storing it. Instead, application integration directly links multiple applications at the functional level, supporting the creation of dynamic and highly adaptable applications and services. 

 

The amount of data and time required is modest, as application integration deals primarily with the connection of applications at the workflow level.

 

Application integration can be cloud-based such as an SaaS CRM application, reside on-premise behind a firewall such as a traditional ERP system, or it can be deployed in a hybrid environment, where cloud applications are hosted on private servers. 

 

The following components help link applications harmoniously:

  1. Application programming interfaces (APIs): APIs are procedures and rules that define how different pieces of software interact, allowing applications to communicate with each other. APIs tap into the specified data structure to help developers quickly access the functionality of other applications. 
  2. Event-driven actions: An event-driven action occurs when a trigger – an event – kicks off a procedure or set of actions. The following are examples of event-driven actions: the invoicing and billing of a customer after an order is submitted, or managing an opportunity-to-order workflow from an ERP system to a CRM system. 
  3. Data mapping: The mapping of data in one system to another defines how the data will be exchanged, making it easier to export, group, or analyse later. For example, a customer enters information into a contact form within one application. The data is then mapped to corresponding fields in adjacent applications.

Common application integration challenges

When done properly, enterprise application integration can help organisations become more responsive and agile. However, it can also be a complex undertaking. 

 

With careful planning and the right tools, application integration can help businesses thrive in a competitive environment. Some of the common challenges organisations encounter when implementing application integration projects include:

  • Lack of executive support or strategy: Timely decisions at the executive level and a detailed strategy are imperative to the success of an application integration initiative.
  • Poor communication and lack of collaboration: Execution may be thwarted due to internal politics and ineffective communication. Create a strong plan to build consensus and support change management at the start of the project. 
  • Inadequate tools: Without the proper tools to implement and support the rollout, the overall project may fail. Implement tools that support a flexible and scalable implementation.
  • Misguided strategy: Many organisations view EAI as a product when, in actuality, it is an architecture. Align on this strategy at the start of the implementation to ensure everyone is on the same page.  
  • Limited focus: Although the biggest investment of time will be in the implementation of the integration workflows, don’t overlook the importance of security performance and monitoring. 
  • Workforce deficiencies: Before the project kicks off, ensure adequate resources and skill sets are in place to support the project. Supplementing existing resources may be required.  

 

To succeed, an organisation will need a robust EAI strategy, an executive sponsor, and the expertise and skills to guide, build, and execute the strategy, supported by a comprehensive set of application integration tools.

Explore SAP Application Integration

See how you can drive efficiencies, automate workflows, and enhance processes. 

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Frequently asked questions

One example of application integration is an e-commerce use case where the front-end business processes (client interactions, online sales) must integrate with back-end processes like inventory management and fulfilment. The company relies on application integration to automate these workflows, ensuring data from each interaction flows seamlessly across all applications.

Process integration is the sharing of events, data, and transactions between business processes that span multiple applications across different departments in an organisation –typically in real time. It is also used to extend processes beyond an organisation to a customer or a partner.

 

In many cases, events or transactions are used to trigger a process, such as a sales transaction triggering the process to set up an account in a billing system.

API management is the process of distributing and controlling APIs that connect applications and data. It allows organisations to publish, supervise, and secure API activity to support developers and applications. The process enforces usage policy, controls access, monitors performance, publishes documentation, and monetizes access. 

 

Companies use API management to democratize secure access to data and services. Businesses can share digital assets and processes, and developer communities can access assets with ease via new channels, devices, and user interfaces. 

IPaaS is a managed service in the cloud that supports application integration for cloud-to-cloud, hybrid, and on-premise-to-on-premise scenarios. The process helps businesses deliver digital solutions faster, accelerating time to market. It reduces dependencies on IT, enhances developer productivity, and provides a unified customer experience. 

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