Software Integration: Everything You Need to Know

Modern businesses increasingly rely on a wide range of software solutions for everything from payroll to inventory management, and internal communication to marketing. Without effective software integration these solutions won’t work together, leading to data siloes and other issues which damage productivity and the bottom line. 

Integration of software, therefore, is a critical consideration for companies—especially enterprises which may need to combine both legacy and cloud-based tools and processes. 

If your enterprise suffers from a disjointed tech stack and data siloes that mean your software doesn’t work well together, then read on. Our ultimate guide to software integration will help you understand your options and get your workflows back on track.   

What is software integration?

The term "software integration" describes the process of connecting individual software components so that they can operate as a larger whole. 

If different platforms in your business are unable to exchange data with one another, you may need to maintain several separate systems instead, which can reduce productivity. The result of integration is that applications are able to share a single database, and while careful coordination is necessary, the enhanced efficiency that follows proper implementation can be a huge boost to businesses.

Software integration vs system integration

As well as software integration, system integration is another similar and important term to understand if your goal is to achieve better-connected tools and more streamlined workflows in an enterprise. But what’s the difference between software integration and system integration?

As mentioned, software integration is the connection of two or more separate software solutions so that they can work together seamlessly. System integration, meanwhile, is more holistic. It involves the connection of all elements of a broad IT infrastructure (or system), including both software and hardware components. Software integration, therefore, can be seen as one element or subset of system integration. 

Types of software integration

You can categorize software integration according to how the software is integrated. Types of software integration in this vein include star integration, horizontal integration, vertical integration, and common data format integration. 

Star integration involves linking software subsystems with point-to-point connections to build a unified system.

Horizontal integration usually uses a single data field structure to integrate several similar applications. Although this is the easiest type of integration to deploy, it doesn’t offer much flexibility.

In a vertical integration, the production floor undergoes tight monitoring and coordination with advanced business processes, such as supply, quality control, and procurement.

Common data format integration, finally, uses a common data format to integrate data from separate systems. The data format can be shared languages that support communication between systems.

When might you need software integration?

In the modern business world, integrating software solutions seamlessly will be beneficial to most businesses—as we’ll see shortly. Software integration may be particularly necessary, however, for a business in the following situations:

• During a switch to a new database from a legacy system.
• For a data warehouse that requires an ETL (extract, transform, load) procedure for transferring data from the production system to the data storage system.
• To connect different databases or file-based systems.
• When process replication needs to occur across different systems to provide consistent business outcomes.

Businesses that rely on a number of different systems for basic tasks will likely benefit from software integration. Recording sales, tracking supplier data, and updating customer records are examples of such tasks, which often require specialized functionalities to be integrated into a unified system for efficient data gathering and analysis.

Benefits of software integration

Several factors affect how easy an integration will be, including disparities in language or other technical aspects (such as architecture). Because of this, integration can sometimes be a challenging and expensive process, and it normally requires the dedicated efforts of IT specialists. 

However, the potential software integration benefits will typically make this investment of money, time, and expertise worthwhile. Let’s take a look at some of the main ones:

Better streamlined workflows

Some business processes and workflows may need multiple software tools to complete. If those tools are entirely separate, it can add unnecessary time and hassle to tasks—requiring multiple inputs of information or app-hopping, for instance. With software integration, however, you can streamline those workflows and make them quicker and easier to complete.

More accurate and consistent data

We’ve mentioned data siloes a few times already. One of the many issues with those is that they can lead to inconsistent and inaccurate data across an enterprise. For instance, if an error occurs in data entry into one software tool. With software integration, data should flow seamlessly and automatically between tools—thus improving accuracy and consistency across the organization. 

Improved decision-making

In modern business, the best decisions are typically those based on data rather than intuition. The improved accuracy and consistency of data which software integration supports, therefore, enables better data-driven decision-making. That allows enterprises to make the right choices to ensure their continued survival and growth.  

Enhanced customer experience (CX)

Integrating software can also have a noticeable positive effect on the service and experience you offer customers. For instance, an enterprise might integrate customer relationship management (CRM), inventory management, and communication solutions. That would make it easier for them to keep customers up-to-date in real time on orders, deliveries, and similar.  

Cost savings

All of the above can then combine to mean cost-savings for an enterprise. More streamlined workflows can mean greater productivity. Improved customer experience, meanwhile, may mean greater customer loyalty and less need for outlay on marketing to replace clients who churn. It’s clear to see, therefore, why software integration is seen as increasingly vital by many organizations.

Different software integration solutions

By now, you know what software integration is and the benefits it could offer your business. The next logical step is to try to learn how to go about it. There are a range of software integration solutions to choose from. The following are five of the most common:

1. Point-to-point integration
2. Native integrations
3. Enterprise service bus (EBS) middleware
4. integration Platform as a Service (iPaaS)
5. APIzation 

1. Point-to-point integration

Point-to-point integration is when an enterprise leverages in-house resources to create custom code which can connect key software solutions. This means that the integrations are purpose-built to meet the business’s needs. However, creating such integrations is generally time-consuming and requires high-level expertise.  

2. Native integrations

Many software providers do offer their own “native” integrations with other popular tools and solutions. These are typically “plug-and-play”, and so are easier and cheaper to deploy. However, you’re reliant on integrations existing between the precise solutions you do use. You also need the provider to be diligent when it comes to maintenance and upgrades.  

3. Enterprise service bus (ESB) middleware

ESB middleware acts as a kind of middleman between two software solutions. It provides centralized infrastructure that each solution connects to, and then acts as a “communication bus”; sending data between the solutions. 

Middleware was once among the most popular methods of connecting software solutions, however it does have a couple of notable weaknesses. It adds an extra layer of complexity to any system, thus increasing the possibility of something going wrong. What’s more, it represents a single point of failure, meaning that if something does go wrong with the middleware, all your integrations fail.

4. integration Platform as a Service (iPaaS)

integration Platform as a Service (iPaaS) is the name for a cloud-based solution that provides a centralized platform for integrating applications and allowing data flow between them. Working with an iPaaS vendor can provide businesses with pre-built connections to popular software. Those vendors are also experienced at ensuring security and data protection. 

Such integration solutions, however, can be complex to use and also often only allow one-way integration. That means you can transfer information from one app to the next but not back the other way.

If you need two-way integration, a built-in solution is a better solution to synchronize separate databases. This way if you make a change in one app, you'll automatically see it reflected in the other. 

5. APIzation

APIzation is the use of application programming interfaces (APIs) to connect separate software solutions and applications seamlessly. It’s especially beneficial if you need to connect legacy systems with more modern, cloud-based assets. 

If you work with a specialist like OpenLegacy, you can make better use of the invaluable information in legacy assets, while also enabling innovation and future-proofing your enterprise.

Building a software integration strategy: Initial considerations

Despite its importance, the software integration process can be a minefield. Make sure to evaluate the following considerations to ensure a successful integration of your software.

Applications to integrate

Although large enterprises often develop software in-house, many are increasingly switching to SaaS (Software as a Service) models, as this approach allows them to easily manage specific operational processes. Thanks to the scalability of cloud-based services, most small businesses are now starting out with SaaS solutions, too.

Despite the rise of SaaS, in-house software is more often in need of integration. Engineers may be required to assist with the architecture for in-house software integration, However, there are also plenty of pre-built alternatives available to accommodate your enterprise integration requirements.

Identifying which applications you plan to integrate will help you choose the best solution for your business. 

Type of data to consolidate

Data comes in many different forms, including, but not limited to, text, figures, graphics, and audio. Before any integration can be set up, the data fields that will be merged or shared between apps must be determined.

However, when different apps classify and label data differently, this aspect of integration can become tricky. To overcome this obstacle, you should create a common data model or map. This explains data labels across systems by specifying how information from one application should be mapped to the corresponding fields in another app. 

For example, if app A labels a customer's address as the "billing address," while app B categorizes it as the "shipping address", the data map will link the "billing address" and "shipping address" fields together. Data can then be accurately and consistently shared across all integrated systems.

Software integration best practices: How to choose the best software integration option for you

Choosing your software integration becomes much easier when you’ve nailed down the two principal considerations mentioned above. It should still not be taken lightly, however, as your ultimate choice can make all the difference. 

With that in mind, here’s our simple six-point guide on how to implement software integration successfully:

1. Know what your business needs
2. Decide on an integration method
3. Consider scalability
4. Factor in security
5. Check peer reviews
6. Compare on-premises, cloud-based, and hybrid integration

Know what your business needs

It’s important to determine your business needs before looking at software integration solutions. Every business has different requirements when integrating systems, and the best solutions will marry adaptability and robust functionality to these unique needs.

Integrating systems and data requires identifying the data fields and procedures that need to be involved. This information can be used to compare the various integration techniques and choose the best one for your business.

Decide on an integration method

Integration solutions that are both user-friendly and effective improve your team's efficiency and your organization’s operations. A tool that has advanced functionality but is difficult and confusing to use, is not a good solution. 

Instead, make sure to choose an integration method that can be easily implemented and is aligned with your overarching business objectives.

Consider scalability

Scalability is another crucial factor to consider. You should choose an integration solution that can evolve with your business and adapt to changing demands. This will make a huge difference if you need to expand operations, so scalability is especially vital for startups. 

There are plenty of great scalable software integration tools out there; there’s no reason to settle for one that can't keep up with your business growth.

Factor in security

One of your primary concerns when selecting the best integration solution for your company should be its level of security. Products with little thought for security measures can endanger your valuable data. 

Prioritize an integration software tool that meets all relevant security and industry standards. Intruder warnings and real-time reporting are two fundamental data security functions that integration software should provide.

Check peer reviews

One of the most reliable methods for determining the quality of a product or service is to learn what other people think about it. Before implementing software integration solutions, read customer reviews and take into account what other users think before committing to a system. 

Is the general consensus good? If the answer is “yes”, then you’re probably looking at software that will deliver the promised results.

Compare on-premises, cloud-based, and hybrid integration

You'll need to make a choice between a data integration system hosted in the cloud and one hosted locally. Remember that different integration strategies can work well in different contexts.

As the name implies, cloud-based data integration occurs in a cloud environment. This sort of solution can benefit businesses that already have cloud-based IT infrastructure. 

In contrast, "on-premises data integration" refers to the process of integrating an organization's systems locally. 

Hybrid integration is a middle-ground solution. It balances the challenges of breaking reliance on legacy systems with new integration needs.

Software integration examples and case studies

Enterprises can employ software integrations in many areas of operations, for many purposes, and to connect a variety of solutions. Some of the most popular software integration examples include:

• Linking a business website to popular social networks, like Facebook or Twitter, so visitors can easily share content from your website.
• Connecting your accounting system and eCommerce platforms so customer orders can be processed immediately.
• Automating the sending of marketing emails to new leads when they sign up for your service by integrating your CRM (customer relationship management) system with email marketing platforms.
• Linking Google Analytics with WordPress to monitor site traffic without having to leave WordPress.

Sometimes, however, software integration can be more complex and deliver far more notable results—particularly when it comes to exposing legacy systems. 

The Citibanamex case study

Founded in 1884, Citibanamex provides a great software integration case study of how—when done properly—it can effectively connect legacy and more modern services. With 40,000 employees and millions of customers, the bank handles roughly 40% of transactions made in Mexico. 

The dynamic Mexican consumer banking market was the primary driver of Citibanamex's digital transformation. The main goal was to provide a consistent, personalized user experience across all channels, including the branch network.

The bank chose an unusual KPI to study: its app store rating. This was rated two out of five when the bank began its digital transformation project. Citibanamex knew it needed new products to improve the digital user experience.

The challenge

Citibanamex believed they could achieve digital transformation by using their proven technology backbone and adding new services and applications with a flexible, agile approach. 

In-house tools, ESBs, mainframe gateways, middleware, routers, dispatchers, and messaging queues grew in complexity as modernization progressed. Each system handled the backend legacy platform differently, making legacy application integrations harder after each "integration" project.

The solution

Realizing the issues it was facing, Citibanamex asked OpenLegacy to expose its core banking applications, including Checking and Debit Accounts, Account Opening, Payments, Consumer Credit (Personal, Autos, and Mortgage), and Investments. 

OpenLegacy's mainframe connector, COBOL parser, and automated API generator created a working prototype. This resulted in the exposure of six real-world mainframe business flows as APIs. 

This solution is directly connected to the mainframe environment, invoking transactions, analyzing back-end code, automatically generating APIs, and processing both input and output. 

OpenLegacy's new APIs were tested and deployed in the bank's environment to ensure they worked and met internal integration standards as well as the bank's requirements.

The result

As Citibanamex made mobile app improvements, including developing a new user interface and digital payment features, the results were clear. The bank's agile digital development increased the mobile app's rating from two to 4.5. 

The bank's OpenLegacy implementation improved speed-to-market, customer experience, cost savings, agility, and innovation far beyond the targeted KPI.

Facilitate scalability with software integration

Software integration allows businesses to integrate new data sources, systems, and processes without affecting existing operations. 

With an integration solution from OpenLegacy, you can unify your business processes and data, improving scalability and resource management. 

In addition to providing extensive capabilities that enable the integration of various systems and data types, OpenLegacy's API integration platform is flexible enough to align with your underlying infrastructure in order to support your growth and legacy modernization efforts.