Finding Success in Data Integration

Your car phone rings. An important customer needs his or her shipments rerouted from one plant to another.

In your briefcase is a computer linked to your corporate database by cellular radio. You order the system to redirect the shipments; the system confirms the order and displays projected delivery times. It asks if you want the overseas shipment sent by international courier and quotes the additional cost. You discuss this with your customer, who agrees and asks you to fax a confirmation of the new shipment quantities, times and locations.

With today’s information technology, this scenario is perfectly plausible. What makes it seem fantastic is not the technology but the integration of marketing, sales, distribution and cost-control information. For an increasing number of companies, such complete business integration represents technology’s most important and promising role for the future.

Business integration recognizes the interdependence between disparate business functions and uses information technology to link them. Integration can have a direct--and profound--impact on a company’s competitive position.

That impact will continue to grow as information becomes even more important to business. At DuPont, for instance, the flow of raw data is increasing at the phenomenal rate of 30% annually. By facilitating and broadening the movement of important information across the enterprise, companies can speed decision making.

How does a company construct an effective system? A look at successfully integrated enterprises suggests three common characteristics.

* First, a willingness to distribute business functions. Centralized operations are still needed today for large processing needs. However, the rapid drop in computer costs, together with the arrival of distributed processing technology, has allowed companies to increase the number of decentralized sales offices.

* Second, the ability to store and process a wider range of information--not just numbers and texts but images and voice data. Storing images electronically, for instance, can result in significant savings by reducing some of the costs of managing paper documents. And customer service is improved when a company is able to quickly retrieve documents, photographs and drawings.

* Third, ease of communication across boundaries. Such leading firms as General Electric and DuPont are extending networks around the world, linking their operations in dozens of countries. The most aggressive companies are also crossing external boundaries, integrating portions of their own systems with those of their customers and suppliers.

Levi Strauss & Co. has simplified ordering, stocking, receiving and invoicing by deploying LeviLink, its merchandising and inventory system. More than 3,500 of the company’s customers use some aspect of the system, which pre-tickets merchandise for customers, generates electronic packing slips that arrive before shipments and tracks sales to create reorders.

At the end of this decade, aggressive companies will have integrated their information systems. Some conservative companies will have been absorbed or gone out of business. Just before they turn off the lights, they will shut off the last computer and disconnect the last telephone line.