Integration can be the key to a more efficient operation and can help you to know your customers better. But companies should have a clear business objective before jumping on the bandwagon, writes Cathy Hayward
What's the difference between a high street bank and on-line book retailer Amazon.co.uk? Log on to Amazon and it recognises you as the customer who likes DVD action thrillers, blew 40 [pounds sterling] on Tomb Raider for the Playstation 2 you pre-ordered last Christmas and 20 [pounds sterling] on a gardening book giftwrapped to the US for Mothers' Day. It knows your billing and delivery addresses, as well as your credit card details, and has this information to hand the minute you log on. And it uses that knowledge proactively, suggesting items you might like to buy based on your purchasing history.
But write to your bank -- where your mortgage, current and savings accounts and ISA are held -- to tell them you have moved house, and it is more than likely that a statement or two will still find their way to your old address.
Consumers complain constantly about how little companies with which they have regular dealings seem to know about them. Whether you are pestered by the double-glazing firm which replaced the windows in your secondfloor flat calling to offer a discount on a conservatory, or your electricity company of 15 years offering you cheap gas when you live in a non-mains gas area, everyone knows of companies where the right hand has the knowledge, but the left hand runs the business.
Why does this happen? It's usually down to a bewildering combination of software applications and systems which don't talk to each other. Your front-end system might be excellent at taking customer orders, but if it is not relaying information to back-end systems, deliveries are late or don't arrive at all. And if a customer has multiple accounts with, for example, abank, their change of address might be entered in one system, but not another.
"When e-commerce came along, a lot of people jumped on the bandwagon and bought fancy front-end systems," says Paul Brennan vice-president of software firm Actional Europe. "But most of these weren't integrated with other systems and that's where they fell down. You lose customers if your goods aren't going out on time," -- something Waterstones, Toys `R' Us and music retailer CDzone found when orders placed in time for Christmas delivery last year failed to arrive.
A recent on-line shopping report, commissioned by web design and marketing consultancy Dial Intern, revealed that four out of 20 of the UK's most popular websites failed to respond to customer queries, let alone process orders and deliver them.
If businesses want to keep customers, they have to overcome these technical problems. Tom Bamber, principal consultant in financial services at KPMG, sees the rise of customer relationship management (CRM) as increasing the need for integration. "To have robust, accurate CRM capability, software systems must be integrated," he says.
But it's not just CRM that is increasing the popularity of software integration. The dramatic increase in mergers and acquisitions over the past five years has resulted in many different types of systems and applications in one organisation. The long-term objective of a merged company might be to convert to one application but, in the short term, the systems need to be integrated and work together, explains Ralph Simpson, product manager, Europe, Middle East and Africa, at e-business...