Enterprise integration: Issues and methods

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Enterprise integration:Issues and methodsH. Noori & F. MavaddatPublished online: 15 Nov 2010.

To cite this article: H. Noori & F. Mavaddat (1998) Enterprise integration:Issues and methods, International Journal of Production Research, 36:8,2083-2097, DOI: 10.1080/002075498192788

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int. j. prod. res., 1998, vol. 36, no. 8, 2083± 2097

Enterprise integration: issues and methods

H. NOORI² * and F. MAVADDAT³

The necessity of maintaining lean operations and becoming an agile enterprise’ ,in which the speed and ¯ exibility at which a company functions matches that ofits technology, is widely accepted. Information technology is providing the meansfor companies to integrate better their internal and external activities. This levelof integration is achieved through enterprisewide systems’ that re¯ ect the currentoperations and processes of the business and allow decision-makers to digestinformation more rapidly and accurately, and with more ¯ exibility. The objectiveof this paper is to review some of the current literature concerning enterpriseintegration and to identify and discuss the main issues that need to be consideredbefore attempting to establish enterprise-wide integration.

1. Introduction

The necessity of maintaining lean operations and becoming an agile manufac-turing enterprise’ in which the speed and ¯ exibility at which a company functionsmatches that of its technology, is widely accepted (Goldman and Nagel 1993). Intoday’s market, companies are expected to deliver new products and services moree� ciently. While it is obvious that agility should be a corporate goal, it is lessobvious what organizational and technological requirements are necessary to achieveit, and how the process can be implemented.

Successful companies have invested heavily in certain structural prerequisites toenhance their operations. While the nature and the extent of these investments vary,we have identi® ed four distinct structural prerequisites to be of importance (Nooriand Radford 1993):

� Emphasis on continuous improvement throughout the entire organization;

� Investment in research and development;

� Adoption of advanced technologies;

� Integration of people and systems.

The latter is perhaps the most challenging job of all.Importantly, information technology is revolutionizing the networking, commu-

nications, and control systems within the organization. It is providing the means forcompanies to better integrate their internal and external activities. This level ofintegration is achieved through enterprise-wide systems’ that re¯ ect the currentoperations and processes of the business and allow decision-makers to digest infor-mation more rapidly and accurately, and with more ¯ exibility (Ho� man 1992).Internal integration requires the company to build a set of consistent and mutuallysupportive manufacturing practices which support the company’s manufacturing

0020± 7543/98 $12.00 Ñ 1998 Taylor & Francis Ltd.

Revision received July 1997.² Laurier Business Economics, Wilfrid Laurier University, Waterloo, Canada³ Department of Computer Science, University of Waterloo, Waterloo, Canada* To whom correspondence should be addressed.

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objectives. External integration matches these objectives with the needs of themarket and the company’s competitive needs, within the existing environment con-straints. In this way, internal and external integration support each other.

Enterprise-wide integration (EI) implies bringing the di� erent components of acompany together to work e� ectively and e� ciently toward achieving its goals(Morgan et al. 1990). EI characterizes an agile and responsive company di� erentiat-ing it from traditional organizations by enabling it to quickly produce higher qualityand lower cost products. This requires the ® rm to integrate people and systemswithin and along the value chain.

The objective of this paper is to review some of the current literature concerningenterprise integration and to identify and discuss the main issues that need to beconsidered before attempting to establish enterprise-wide integration. Literature onEI has evolved from the EI concepts (§ 2), to modelling the enterprise (§ 3), toimplementing EI (§ 4). Finally, § 5 concludes with future research and goals.

2. The concept of enterprise integration

2.1. An overviewEnterprise integration, also referred to as a customer-oriented manufacturing

management system’ and enterprise resource planning’ (Radding 1992), has evolvedfrom a number of preceding information systems including MRP, MRPII and CIM.EI is the most recent approach to information systems design. Here the goal is toaddress the information needs of the entire organization as well as the customer andsupplier interface. In simple terms, however, EI is an attempt to create a completeinformation processing system to serve both functional requirements and the corpo-rate business objective of (manufacturing) companies in real time.

In general, enterprise integration can be de® ned as business practices and tech-nologies that result in an infrastructure which enables:

� The dissemination of information;

� The coordination of decisions;

� The management of actions to and among people and systems both within andoutside of it.

While a necessary requirement, it is, at the same time, a very challenging task tooperationalize and institutionalize EI. A typical structure for EI should be composedof management and technology. This necessitates the formation of a ¯ exible operat-ing entity that approaches its dependencies in a fundamentally di� erent manner fromits traditional forebears and counterparts.

All of the reviewed literature regards enterprise integration as the linking of acompany via information systems internally, as well as externally with its suppliersand customers. There are, however, di� erent opinions regarding the function of thisintegration. Some of the literature takes a micro view, addressing issues such as realtime production scheduling in response to merchandise sales at retail outlets, on lineproduct ordering based on customer’s speci® cations, and shared informationbetween marketing and R&D resulting in rapid product development (Radding1992). At the other extreme is the macro view, focusing on the integration systemas a tool for top management, which will provide the capacity to run a business bymanaging its informational representation (Haeckel and Nolan 1993).

This paper de® nes enterprise integration as the establishment of an informationsystems infrastructure within an organization, as well as its external sources of

2084 H. Noori and F. Mavaddat

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in¯ uence, in order to facilitate the ¯ ow and sharing of information, so as to providethe organization with the ability to respond to its environment in real time.

2.2. The evolution and strategic importanceEnterprise integration, although a recent approach to information systems

designs, has evolved from a number of preceding information systems. The ® rstinformation system, MRP, focuses on manufacturing operations. MRPII, which isbuilt on the backbone of MRP, includes ® nancial and planning modules to assistmanufacturing operations. The third system, CIM, is designed to integrate the dif-ferent internal and external activities of the company. These three systems have beenfollowed by the customer-oriented manufacturing management system’ (Radding1992). This system essentially describes an extended manufacturing informationsystem that can access customers’ and suppliers’ systems, and can incorporate infor-mation from other parts of the business, such as transportation and distribution,marketing and promotion, and any other aspect that impacts the manufacturingprocess.

The extent of integration that organizations need to deal e� ectively with thechanging business environment must meet a number of requirements. These include:addressing multiplant operations (providing multilanguage, multinational capabil-ities), handling supply chain management and distribution, integrating ® nancialanalysis, providing real-time forecasting (including R&D and engineering systems),supporting manufacturing execution systems and ® nite scheduling, and providingexecutive information and decision making tools (Radding 1992). Since this systemaddresses not only the information needs of manufacturing, but also the informationneeds of the entire organization as well as customer and supplier interfaces, it shouldbe thought of and treated as an EI system.

With expansion of their markets on a global basis, companies need to establishsupply and distribution relationships with suppliers and customers. Establishingelectronic links with customers and suppliers enables the ® rm to reduce lead timeand inventory holdings. In this context, the role of information technology strategymust be re-examined from an inter-enterprise perspective (Sheridan 1994). Thisimplies a di� erent look at integrating information along the value chain as depictedby ® gure 1. Figure 1 is based on a model proposed by Kurt Salmon Associates (1993)to enhance customer value in the grocery industry. The ® gure illustrates the di� er-ences in supply chain linkages between traditional and EI-type companies.

Enterprise integration: issues and methods 2085

Figure 1. Supply chain links.

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3. Modelling the enterprise

It is inappropriate to design an information system that facilitates enterpriseintegration without ® rst thoroughly understanding and mapping in detail the® rm’s business functions and decision-making processes independently and interac-tively. A critical and detailed look at the organization in order to develop a businessmodel will point out areas of incongruence and can help organizations to becomemore streamlined and e� ectively oriented. Whether the areas of analysis are de® nedby function or process and whether or not they overlap is irrelevant as long as theentire organization has been examined (Scheer and Hars 1992). This will allow the EIdesigners to eliminate those which are not necessary, and identify which ones aremissing in order to achieve successful integration (Vacca 1992).

Enterprise integration can lead to more agility. Going through the process ofintegrating the entire enterprise may help the ® rm to eliminate redundant or non-value adding jobs. A study by Brynjolfsson et al. (1994) indicates that using IT and abusiness model can help ® rms to operate more e� ciently.

McDavid (1992) looked extensively at developing enterprise and business models.In order to be useful, the business model must de® ne the corporation’s overall needsfor information technology. Furthermore, in order for the business model to take onvalue it must achieve signi® cant detail. A robust business model should accommo-date at least ® ve kinds of ¯ ows: Information, Control, Material, Money, andIntangibles such as customer satisfaction and quality improvement. Establishingthe business model is important; however, the validation of the model is critical.Since the business model is the framework on which the enterprise integratinginformation system will be built, any mistakes in the model will be transferred tothe system. Therefore, the model must be correct and current (Haeckel and Nolan1993).

3.1. Object-oriented business modelsThe real world systems (enterprise or otherwise), are a collection of interacting

entities such as people, parts, and machinery. To model such systems, their entitiesare abstracted and characterized by their attributes and changes to those attributesin reaction to external events. We refer to such reactions as the entity’s functionalityor behaviour.

In traditional system modelling, during the initial systems analysis (SA) phase,entities of interest are recognized and their relevant behaviours are studied anddocumented. Next, during the systems design (SD) phase, because of constraintsimposed by the use of traditional programming languages, (characterized by the`programs= data+ algorithms’ notion) entities are opened up and their attributesand functionalities are grouped into `data-structures’ and algorithms’ of a ¯ attenedor hierarchical design. This way, the interaction of the entities is built into the logicand control system of the implementation model rather than the result of the inter-action of the entities of the model.

Object-oriented modelling overcomes this constraint by providing a design para-digm in which system entities are modelled, designed, and implemented closer totheir initial form and in direct correspondence with the entities identi® ed and docu-mented during the SA phase. This provides a smooth transition between the analysis,design, and implementation phases and, at times, may even blur the distinctionbetween them. When coupled with its other advantages (such as classes, encapsula-tion, polymorphism, and dynamic binding), the object-oriented paradigm provides a


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more natural and e� ective way of modelling enterprise activities (Adiga 1993). Table1 compares the traditional and object-oriented methods (see Mize et al. 1992a).

In the rest of this section we brie¯ y discuss the way that each of these paradigmfeatures helps to improve the computer modelling power in general, and that ofmanufacturing enterprises in particular.

� Classes and inheritance: A class de® nes the common properties of similarobjects. An object-oriented model is a collection of objects, each of whichrepresents an instance of some class. An important property of object orientedmodelling, design and programming is its support of sub-classes that automa-tically inherit the properties of their parent class. This gives classes the abilityto share their properties with more specialized forms of themselves. Accordingto Booch (1994), programming without inheritance is distinctly not object-oriented and may be called `programming with abstract data-types’ . In anobject-oriented model, the objects of the model are members of a hierarchyof classes united via inheritance relationships.

At least two properties of object classes and inheritance contribute to object-oriented modelling in general and enterprise modelling in particular:

(1) Reuse: Traditionally, enterprise models have been viewed as single purpose,throw-away e� orts (Mize et al. 1992b). The class structure and inheritancefeatures of object-oriented models facilitate a higher degree of reusability andare the key to programmer productivity through the reuse of objects (Adiga1993). Object-oriented concepts enable the modeller to integrate di� erentmodelling views in one consistent enterprise model (Luh 1994).

(2) Broadcasting: Changes and/or updates to traditional, non object-oriented,


Factors Traditional models Object-oriented models

E� ort/time/cost Moderate to develop. Expensiveto maintain and repair

Higher to develop. Lower tomaintain and repair.

Reuse Model entities are not isolatedenough to make them easilyportable

Easier to refuse re® ne. Independentobjects represent model entities

Flexibility Modi® cations and repairs risky. Replacement of model objects withcontrolled side-e� ects, if possible

Implementing the model

Translation to code Is unnatural and often non-intuitive

Is more natural and possibly moreintuitive

Interface Often based on earlier generationtolls and therefore textual

Often based on current generationof tools and graphical

Level of detail Improving model accuracy islimited due to uncontrollableside e� ects

Due to controllable side e� ects,evolutionary development is lessrisky and often possible

System/modelrelationship

Is arti® cial. Model processes donot easily correspond to systemprocesses

Is more natural. Model can beembedded in control structure ofthe ® rm.

Table 1. Contrasting traditional and object-oriented models.

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code are often risky and error-prone. This risk is due to the spread of objectfunctionalities over the length and modules of a program and the di� cultiesin ® nding and applying all the needed changes at the time of maintenance and/or repair. Class structures and inheritance make it possible to broadcastchange to all of the subclasses by modifying the single super-class. This is avery valuable property in the face of continued maintenance and repair neededby all forms of software.

� Encapsulation and information hiding: Encapsulation and information hidingis the design principle which advocates the access to the internals of the objectsonly through well-de® ned interfaces provided by the object. This may be com-pared with the `need-to-know’ principles of maintaining secrecy in an organi-zation. The use of encapsulation and hiding within object-oriented modellingand design helps with writing of more reliable software. Considering the sizeand complexity of enterprise modelling software, the importance of this featurecannot be over-emphasized.

� Polymorphism and dynamic binding: Polymorphism refers to the ability ofdi� erent objects to respond di� erently to the same message in ways uniqueto their respective behaviours (Adiga 1993). When polymorphism is coupledwith dynamic binding (i.e. delaying the reference that a procedure makes to itsdata to the time of the reference), new opportunities which are again of specialinterest to enterprise modelling, become possible. For example, in developingsoftware for control of operations in an assembly line, the polymorphismmakes it possible to modify and/or replace the machinery with little or nochange to the program that drives and controls the equipment. Furthermore,dynamic binding makes it possible to delay the type of operation performed onan object until it passes the proper machine. Obviously, these possibilitiescreate an unusual ¯ exibility in writing and maintenance of enterprise models.

The synergy between the object-oriented paradigm and enterprise modellingshould be no surprise. After all, the promise of the object-oriented paradigm isthat of a close relationship between the system and its model, and in a few otherplaces this can be better exploited than in enterprise modelling with its rich objectstructure and interplay of people, parts and machinery. Despite the existing synergy,the application of object-oriented modelling to enterprise integration has not beengreatly successful or widespread. The answer may be due to any or all of the follow-ing reasons:

(1) Object-oriented design and analysis is still rather young and designers andanalysts have had little experience with the work in this domain.

(2) Compared to the traditional approach, availability of object-oriented tools isstill limited.

(3) Object-oriented features such as polymorphism and dynamic binding areavailable only at extra cost to e� ciency.

Notwithstanding this, it is expected that object-oriented modelling will receive itsdue recognition, when the associated tools and know-how become more widelyavailable.


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3.2. Current enterprise modelling methodologies3.2.1. CIM-OSA

CIM-OSA (Computer integrated manufacturing-open systems architecture), alsoknown as ESPRIT project AMICE (European CIM architecture, in reverse), isaimed at the development of an open reference architecture for de® nition, speci® ca-tion, and implementation of CIM systems. The reference architecture providesrelated references for the manufacturing industry from which particular architecturesful® lling the needs of a particular enterprise can be derived. Particular architecturesembody the necessary knowledge about the enterprise in a form which can bedirectly processed by information technology.

A key concept of OSA approach is the separation of a generalized `businessenterprise’ concept from data processing, computer applications, and manufacturingtechnology concepts. The intention is that the manufacturing system is to bedesigned, modi® ed, and run under the control and motivation of the business enter-prise. This way, the technology is logically separated from the business but respondsto and serves the business objectives.

Another key concept of the CIM-OSA framework is its representation along the(1) Architectural, (2) Modelling, and (3) View co-ordinates. Depending on the pur-pose of a particular representation, the emphasis could be on either one of thesedi� erent co-ordinates.

The CIM-OSA framework has three levels of architectural generosity. Theselevels contain all the constructs required to gather the user requirements for hissystem operation and to translate these requirements into a consistent systemdescription and implementation. The particular level is identical with the particulararchitecture. As such it contains speci® c requirements for the speci® c enterpriseoperations and all the speci® ed, selected, and implemented system componentswhich satisfy these requirements.

The three modelling levels of CIM-OSA consist of `de® nition’ (the requirementsmodelling de® nition level), `design’ (the design speci® cation modelling level), andimplementation’ (the implementation description modelling level).

Finally, CIM-OSA provides four di� erent types of views: (1) Function view, (2)Information view, (3) Resource view, and (4) Organization view. The function viewis the representation of the enterprise operation in terms of a set of hierarchicallystructured business processes. Each business process is de® ned by its triggeringevents, the result it produces, and by its explicit control ¯ ow description. The infor-mation view, on the other hand, gathers all the information de® ned and contained inthe enterprise. This information is structured through a hierarchically de® ned set ofinformation classes and through a set of schemata based on a 3-schema approachde® ned by ISO.

the resource view and the organization view contain all the relevant informationon enterprise resources and responsibilities in the enterprise. Both views are struc-tured using the hierarchical concept of cells for grouping resources or organizingresponsibilities according to enterprise requirements.

All views are part of one and the same model: requirement de® nition, designspeci® cation, and implementation description.

3.2.2. PERAPERA (Purdue enterprise reference architecture), developed at Purdue

University, recognizes the fact that many human functions (especially innovative)


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cannot be implemented on a computer. Therefore, the main focus of PERA is toseparate human-based functions in an enterprise task from those with a manufactur-ing or information perspective.

PERA takes an enterprise task and puts it into one of three categories:

(1) Information system tasks.(2) Manufacturing tasks.(3) Human-based (organizational) tasks.

It is argued that this structural model could be applied to any enterprise regardless ofthe industry involved.

PERA takes two views of the enterprise; a functional view and an implementa-tion view. Both information and manufacturing streams ¯ ow throughout the twoviews. The functional view consists of an information functional model and a man-ufacturing functional model. The information stream consists of planning, schedul-ing, control, and data management functions, whereas the manufacturing streamconsists of physical production functions. The implementation view consists of theinformation architecture, and the manufacturing architecture.

The information and manufacturing architectures are subsequently broken downfurther. The information architecture is broken down into an information systemsarchitecture and a human and organizational architecture. The manufacturing archi-tecture, on the other hand, is divided down into a manufacturing equipment archi-tecture and a human and organizational architecture. In fact, the human andorganizational architecture bridges the gap between the information architectureand the manufacturing architecture.

The results of tasks down the information stream is control, whereas the resultsof tasks down the manufacturing stream are products.

3.2.3. TOVETOVE (Toronto virtual enterprise), developed at the University of Toronto,

takes note of the fact that currently, computer systems that support enterprise func-tions are created independently, and that this leads to problems when integrating theenterprise (see Fox et al. 1997). These problems are:

� Functions do not share the same representations of enterprise knowledge, andtherefore cannot share knowledge.

� The use of semantics in de® ning the above representations is weak, and there-fore the interpretations and uses of the knowledge are inconsistent.

� The representations are passive and lack the capability to automatically deducethe obvious about why they are representing (i.e they lack the ability to answercommon-sense questions).

The goal of TOVE is to create a data model that will solve the above problems by:

� Providing a shared terminology for the enterprise that each agent can jointlyunderstand and use.

� De® ning the meaning of each term (i.e. semantics) in a precise and unambig-uous way.

� Implementing the above semantics in a set of axioms that will enable TOVE toautomatically deduce the answer to many common-sense questions about theenterprise.


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TOVE attempts to accomplish the ® rst goal by de® ning a generic level represen-tation that includes the representations of time, causality, activity, and constraints.This generic level is de® ned in terms of a conceptual level based on a certain termi-nology. TOVE approaches the second and third goals by de® ning a set of axioms (orrules) that de® ne common-sense meanings for the terminology.

4. Implementing enterprise integration

Implementing EI involves implementing the model of the enterprise. In develop-ing an information system that will achieve enterprise integration, the focus must beon business goals, as opposed to technologies (Yellin 1992). In other words, thebusiness model should determine the required technology and its con® guration inorder to achieve enterprise integration. Although this appears to be a relativelystraightforward requirement, costs are often an inhibiting factor. Organizationscurrently possess a variety of information systems platforms, and few of these orga-nizations can actually a� ord to completely replace the existing systems with newones that could ease the integrating task.

Implementing EI, like implementing any new system, requires top managementcommitment, training and education, and availability of the required resources. Inthis section, we will elaborate on some of the challenges that lie ahead when imple-menting EI systems.

4.1. Structure of enterprise integrationThe backbone of EI is the ¯ ow of information throughout the value chain. Many

enterprises already communicate with their suppliers and distributors by the meansof an electronic data interchange (EDI), which can be thought of as interfacing’ theenterprise similar to the traditional linkage through the value chain as displayed in® gure 1. Enterprise Integration takes interfacing one step further, so all other relatedareas in the enterprise can feel a change anywhere in the enterprise (see ® gure 2).

According to ® gure 2, parts of the enterprise come together to form a wholeÐ awhole that is greater than the sum of the parts. The enterprise now has the respon-siveness of a smaller company while still having the bene® ts of an economy of scale(Weston 1993).

With the restructuring that will take place within the organization, informationwill ¯ ow seamlessly among manufacturing, engineering, marketing, purchasing,® nance, inventory, sales and research departments (Goldman and Nagel 1993).


Figure 2. An integrated enterprise.

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This ¯ ow of information will also pass between manufacturers and their suppliers, aswell as between manufacturers and customers. This will result in personnel from thesame company and personnel from other companies being able to interact concur-rently from distinct physical locations.

A successful development and implementation of EI requires co-operationbetween management and employees, using information technology as the tool forachieving e� cient work¯ ows. Management must emphasize the importance of EIand solicit knowledge from employees in order to re-engineer business processes. Theemployees can provide the information necessary to eliminate non-value-addingactivities, since they have ® rst-hand experience of the work being done. The infor-mation systems expert will be the link between the information systems and thebusiness processes and is the key to the success of the integration. With top manage-ment establishing the strategic direction and employees providing information onrequired processes, information system professionals will have to design and developsystems that can capture the bene® ts EI is capable of providing.

4.2. The role of managementThe proposition of introducing EI forces top managers to look at a number of

issues surrounding the structure and ¯ ow of information within, and outside, the® rm. In particular, Sheridan (1994) suggests that management must determine:

� How to establish closer information-system links across functional boundaries.

� How to develop the information infrastructure which is required to take fulladvantage of emerging electronic commerce.

� How to design an information-system foundation that maintains enough ¯ ex-ibility to evolve as business needs change.

The answers to these questions will help determine how e� ectively integrated thecompany becomes and remains into the future.

Ratter and Reid (1994) believe that the key to an e� ectively integrated companyis with mid-level management. Mid-level management is in a position to acquirebroad systems perspectives that enable them to translate the executive level visionof the enterprise into goal-appropriate systems. Top management is often tooremoved from operations, while supervisory management is likely to be too focusedon particular functions.

Ho� man (1992) presents a general model for the management of EI. The modeluses an information system architecture as a key management tool and is intendedto:

� Identify the major functions to be included in a program management organ-ization.

� De® ne the scope and content of the information systems architecture andrelated metrics as a management guide.

� Provide a guide and/or roadmap through the process of developing such anorganization to manage a large-scale integration program.

Winograd et al. (1991) state that the employees are an essential part of anenterprise, and with integration comes the need for recognizing, allowing for, andusing the fact that people are involved in all (manufacturing) enterprises.

One of the main bene® ts that results from enterprise integration is the empower-ment of employees to take action. As business pressures continue to focus more on


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customer demands and needs, there is a movement toward putting decision-makingpower in the hands of those who have the most direct customer contact.Consequently, decision-making power is becoming more decentralized. Enterpriseintegration provides the right people with the necessary information to allow them tomake informed decisions quickly.

Management must be aware that the sharing of information through informationsystems will not guarantee e� ective teamwork. Media-rich information systems canhelp teams capture and transfer learning, but they cannot satisfy all the needs forsocial or interpersonal relationships. Thus, information technology, if used properlyin enterprise integration, can assist employees and management in making betterdecisions faster. However, if management wants to foster a feeling of teamwork, thenthey must build it into the organization with the restructuring.

Hansen (1991) identi® es ® ve principles of integration that focus on motivatingemployees and providing employees with the right information to do their job. Theseprinciples are:

� When people understand the vision, or larger task, of an enterprise and aregiven the right information, the resources, and the responsibility, `they will dothe right thing’.

� Empowered peopleÐ and with good leadership, empowered groupsÐ will havenot only the ability but also the desire to participate in the decision process.

� The existence of a comprehensive and e� ective communications network mustdistribute knowledge and information widely, embracing the openness andtrust that allow the individual to feel empowered to a� ect the real’ problems.

� The democratization and dissemination of information throughout the net-work in all directions irrespective of organizational position ensures that theintegrated enterprise is truly integrated.

� Information freely shared with empowered people who are motivated to makedecisions will naturally distribute the decision-making process throughout theentire organization.

Ho� man (1992) explains that many failures from implementing EI result from a¯ awed management process where one or more of the following defects were present:

� Business requirements were not well de® ned in the early stages, or were for-gotten in the latter stages, of development and implementation.

� Technologies were not properly selected or speci® ed.

� The many projects, tasks, and activities that a� ect the information infrastruc-ture of an enterprise were uncoordinated and led to islands of automation’.

� Components and subsystems were not properly integrated and did not worktogether as a system to meet technical performance objectives.

� Business operations managers and users were not able to apply the systeme� ectively in their environment.

The implementation of enterprise integration, if not approached carefully bymanagement, could be disastrous. Enterprise integration provides for the sharingof information to all employees; however, management must encourage it. Thisimplies that they must help employees unlearn some common practices: that theindividual’ s e� orts are better rewarded and more desirable than teamwork andthat information is power and can be shared only to one’s detriment (Goldmanand Nagel 1993).


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4.3. The role of technologyAs noted earlier, EI is a result of the natural propagation of MRPII and CIM to

link together not only the entire organization, but also its suppliers and customers; itis a complete integration of the activities along the value chain. Hence, it is notsurprising that many vendors of MRPII and CIM systems are scrambling toupdate and expand their systems so as to be able to o� er an enterprise integrationsystem. Others envision a complete redevelopment of information systems infra-structure, and claim that a complete enterprise integration system will not be avail-able until close to year 2000 (Radding 1992).

One thing that is clear is that companies can no longer a� ord to invest in newtechnology simply for the sake of having new technology. Instead, they must investin automation projects that have measured goals (Ho� man 1992). Technology byitself is not the solution. Technology as a strategic tool can provide companies withthe means to integrate. However, the selection of the right hardware and software iscritical. The decisions about how computer networks are designed and implementedwill a� ect an organization’s bottom line.

4.3.1. DesignIt is becoming clear that enterprise integrating systems will have to be very

¯ exible in their design. A method which can provide the required level of ¯ exibilityis object-oriented programming. This ¯ exible approach to building the enterpriseintegration system is needed since the information system must re¯ ect, or be a modelof, the organization, which is not a static entity (Haeckel and Nolan 1993). Thebuilding block approach to the information system allows changes to the system tobe made quickly so that it will always be a true, current re¯ ection of the organiza-tion.

4.3.2. NetworksMultiple networks need to be linked to form the backbone of the integrated

enterprise. Through the use of ISDN, companies can link separate business units,suppliers, and customers in real time.

Many businesses are moving away from the legacy mainframes to local areanetworks (LAN) and open client/server systems. Client/server systems providegreater ¯ exibility and allow workers to integrate tasks, work concurrently ratherthan sequentially, and make decisions based on information available across allbusiness units. Open systems are portable across di� erent hardware platforms, scal-able on various classes of computers, and permit greatly improved ease of integra-tion between systems and devices.

In small enterprises, LANs can provide the means of enterprise integrationthrough high speed transmission of data, images, and possibly video (Morgan etal. 1990). Thus using workstations, a LAN, and telephones, design engineers, man-ufacturing engineers, ® nance personnel, accountants, sales personnel, and manage-ment can develop products concurrently in rich media formats. Mroz (1994)discovered that multidisciplinary new product development teams perceived a needfor multimedia computer tools. He found that the use of multimedia computerscould decrease the barriers that inhibit knowledge development, knowledge sharingand knowledge transfer within teams.


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4.3.3. User interfacesInformation system specialists must provide the means for individuals to quickly

access relevant information. This means that the computer must be able to retrievethe information and the operator of the computer must understand how to operatethe computer e� ciently. Thus investment in employee training is as important asinvestment in the technology itself.

The ultimate objective of enterprise integration is to allow an organization torespond in real time to changes in its environment. In order to achieve this, people,the users, and providers of information and the decision makers, must want to usethe system. As a result, the technology must be transparent to the users. One way tomake the technology transparent to the users is through a graphical user interface(GUI). A GUI lowers training costs, decreases the required training time, boosts userproductivity, provides a consistent interface across multiple applications and ser-vices, and presents information uniformly no matter what its source. The success ofthe information system’s interface will be veri® ed as users begin to demand access tomore data, which, in turn, will provide a challenge to the information systemsspecialists to develop the system further (Yellin 1992).

For EI to be a reality, companies must carefully develop their business modelswith information technology as the integrating tool, which is compatible internallyas well as externally to the organization. They must make sure that the model trulyrepresents the most e� cient operating processes and information ¯ ow. Furthermore,the organization must have the resources in place to be able to modify the model tobe consistent with changes in the environment.

5. Future research

The business model is not a static model. The model, once designed, allows theinformation technology professional to develop the information system that willpromote enterprise integration. However, the business model must be re-evaluatedperiodically. As the business environment changes, the model must be modi® ed toincorporate these changes. It is management’s responsibility to determine when to re-evaluate the business model and whose responsibility it will be. The literature doesnot provide any guidelines as to how often this reevaluation should take place, nor ifit should be top management or a task force speci® cally set up for this purpose. Thisre-evaluation is critical to the long-term success of EI and therefore more work mustbe done in this area.

EI requires a fundamental re-thinking of how the organization does business and,therefore, a change in the mindset within the corporation. How this re-thinking willbe instilled into all employees has not been discussed. It is agreed that employees andmanagers will have to change the way they are working; however, the literature doesnot provide the means to accomplish this. This changing of corporate culture will bedi� cult to do and requires further research.

With technology changing so rapidly, it is hard for companies to determine theircurrent technology needs for EI, let alone predict future needs. Thus, EI technologyresearchers must try to forecast the future direction that information technology willtake, to enable companies to purchase information technology that will not beobsolete in six months. Forecasting future needs for information technology isvery di� cult. Information technology is as much a technology push as a marketingpull product. Thus researchers must closely examine current trends in informationtechnology R&D and match these with the future need of organizations for EI.


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EI represents the whole process chain from suppliers to customers. This requiresthat the information systems that companies are using must be compatible withthose of their customers and suppliers. This is a formidable task considering eachcompany within the value chain could have di� erent levels of computer automation,as well as di� erent information systems. Therefore, research must be conducted onhow to determine the `proper’ level of computer automation within an organizationas well as the system requirements in order for EI to be successful.

It is di� cult to argue that enterprise integration is an invalid idea. Having thecapability to share information easily within your own organization, as well as withcustomers and suppliers, will theoretically help the organization. However, the costsof EI must be determined. Research that will help companies to conduct a cost/bene® t analysis is more than overdue. Researchers develop ideas and concepts thatare theoretically correct and logical; however, the cost of implementing these ideas isseldom mentioned. Thus, providing organizations with a framework for determiningthe cost of implementing EI could be very bene® cial.

This framework for the cost/bene® t analysis of EI should not be based solely on® nancial costs. Intangible costs, such as employee frustration, information security,the development of a new corporate culture, etc., should also be included. Obviously,intangible bene® ts should also be incorporated. Thus including monetary and non-monetary costs/bene® ts will allow organizations to determine if they should pursueEI at this time.

This framework can also provide organizations with a timetable for implementa-tion. Companies may determine that EI is currently too costly to implement at thepresent time; however, they understand that at some point in time they will have toimplement EI because competitors, the industry and other companies are going inthis direction. The development of a cost/bene® t framework can help companiesdetermine the appropriate time for implementation of an EI system.

Acknowledgments

The authors are grateful for the comments received from the anonymous referees.The contribution of David Borean is acknowledged. This research is supported by ajoint grant from Chrysler Canada and the Manufacturing Research Corporation ofOntario (MRCO).

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Documents

Enterprise integration: Issues and methods