When it comes to making effective decisions for your business, you need to ensure you have all the correct and up to date information, when you need it. No longer should your finance department stand alone!
What is Interoperability?
Reach in to your pocket for a moment and pull out your mobile phone. I think it’s safe to assume you’re holding one of the 1.75bn smartphones in the world, a device that’s cloud enabled and remotely synchronising. Let’s say it’s an Apple phone. It’s quite normal to open an email on it from your Microsoft Outlook or Hotmail account, before clicking a link to a Java based website that asks the device for your location before delivering a localised weather report created on a supercomputer on another continent.
That’s interoperability. Different systems, from different suppliers, sharing information in real-time. We use it multiple times a day via our personal tech and there’s absolutely no reason the same technology can’t be utilised in our business systems to get data from around the organisation in to finance and vice versa.
Getting a touch more technical, it’s the ability for multiple software applications to exchange information in real time, without human intervention.
It’s done on a transactional basis, where system 1 generates a transaction that is immediately sent to system 2. There’s no need for batching things up and waiting for a scheduled transfer to happen at some point in the future. Meaning information is constantly being shared back and forth with no delay, allowing an update in your CRM system to immediately be updated in your finance system. It’s a very straight forward idea, allowing
you to keep data in-sync between 2 or more systems across your entire company.
Unlike standard integration, interoperability is not limited to systems from the same supplier. Modern web services links allows information to be shared regardless of who their provider is. In a modern organisation with countless IT systems it’s completely unfeasible to expect one supplier to perfectly meet the needs of each and every department. You need the ability to pick and choose software that best fits the needs of that specific department, it’s users and your overall objectives.
This may sound all very well, but if it’s that simple then why are you only hearing about it now? Could it be possible that your current suppliers have a vested interest in tying you in to their full suite?
How Does Interoperability Work?
There’s some pretty clever technology under the surface of interoperability but the basics are actually quite simple. Initially, a holding area is set up in System 1. This is where all the data that’s going to be transferred sits before it goes anywhere else. The data is marked as being a new ‘insert’ into System 2, an ‘update’ to existing data, or a ‘deletion’ of existing data.
They also set up a similar receiving area in System 2. This connects with the holding area in System 1, so the data can move across in real time. If the connection is down then the data can be held for transmission until the connection is restored. As soon as the data arrives in System 2 it can be processed in much the same way as if it were processed by a real human being. In other words, the functionality for processing transactions sits in the backend database architecture, enabling transactions to occur in exactly the same way.
Once the basic framework has been set up, an organisation can do all sorts of things with its data. Process a sales invoice, change a supplier’s address, check that an account code is valid… it can all happen in real time, transaction by transaction if need be.
Whenever System 1 is upgraded or changed the holding area stays in place and continues to work with the existing version of System 2. This means when you’ve outgrown a certain system, or your needs have just changed, you can swap it out for a different solution without losing your integration.
In the past this was this was all done by database link and trigger technology but nowadays interoperability is becoming even easier, with the use of efficient Web Service technologies.
Interoperability vs Integration
When many IT suppliers talk about integration, they’re almost certainly referring to one of two methods, both of which come with some pretty serious limitations.
Classic integration allows communication by using systems sharing the same data structure to use one database, which works great IF all your systems do in fact share the same data structure. However, in reality, all systems are different, and the only situation where they are likely to match are where they’re all from the same supplier. This is great news for the supplier, but not such good news for you.
The second issue is more subtle. If an organisation is running different systems, for instance in Finance and HR, all may be fine until one of the systems is upgraded to a later version. A new HR system may no longer be compatible with the existing system in Finance, so that means that the company is forced to upgrade the latter too. The problem becomes exacerbated when you consider the number of systems that may be running across one organisation. It simply isn’t practical to upgrade all your IT systems in one go. One point to note here is how much things have changed since classic integration was first introduced over 30 years ago. Despite the sheer volume of data we produce having exploded, the high speed internet we’re all used to and the low cost of storage has made things far simpler. In 1983 disk storage would have cost you around £211,000 per gigabyte, but today it’ll cost just a few pence, which opens up far more possibilities when it comes to sharing it via online links.
Flat File Transfer
The other alternative is flat file transfers or bulk uploads. This method has been used for decades, but it’s time has come and gone.
Firstly, this method is heavily reliant on a human and as fantastic as we are, we do have our off days, which can cause a whole host of errors. A file might not get created or loaded properly, or the transfer is missed one week, or it might get loaded twice by mistake, which is a disaster for finance systems as it’s impossible to simply delete data.
A Flat File Transfer can work effectively for a one off transfer, but what happens when the original data changes? You’ll need to remove and replace it from each and every system, report, or database. Even something simple like a change of address can be very difficult to deal with.
In short, Flat File Transfer is adequate for one off jobs like loading setup data, but for ongoing transactional processing, it’s really a non-starter.
So, What's Changed?
Many providers continue to cling on to the old world of IT, trying to keep your organisation by force as opposed to building a positive relationship through an exceptional product. But living in a world where we are producing more data than ever before, it’s important we utilise it. Not only within the finance department, but organisation wide. And it’s clear that real-time Interoperability is the answer. We’re seeing it constantly in our personal technology and now the time has come to demand it from our business systems.
Want To Know More About Interoperability?
If up to date, real-time reports, and no more monotonous data entry sounds right up your street, then find out more by dropping us a quick message below - We're always keen to chat!