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The economic case for systems integration.

Article Excerpt
EXECUTIVE SUMMARY

Systems integration is the unifying thread that ties together physical, organizational, and business processes of a company with its customers and across its supply chain. SI can handle complexity, mitigate risk, leverage information technology, dramatically improve productivity, and provide competitive advantage.

In the free-for-all that is a capitalist economy, ensuring a company's survival and prosperity has always been a challenge. As Adam Smith put it more than two centuries ago, the invisible hand of the market achieves something remarkable: individuals and companies pursuing their narrow self-interests end up allocating resources in a way that is efficient and leads to strong growth. Along the way, of course, there is a lot of what another great economist, Joseph Schumpeter, called "creative destruction" -- factories, equipment, technologies, brands and, yes, companies falling by the wayside as new ones come along and wrest away advantage. To survive requires adaptability agility, and tenacity

The challenge seems to be getting harder every year. Technological advances are developed, disseminated, and adopted faster, aided by ever-increasing computational power and speed of communications. Despite some setbacks to globalization in the past two years, international flows of goods, services, capital, and people are now larger than ever, which has intensified global competition.

Unprecedented information flows and powerful marketing are changing and fragmenting customer tastes, needs, and wants. In this fast-changing environment, those that can't adapt go out of business. This was as true in 1883 as it is now; but the pace at which change comes is much quicker, and the time a company has to react is much shorter. In the long run, there is no sure thing, and constant adaptation is key to survival. No advantage lasts very long, but innovation, speed to market, and lower operations and capital costs can buy time or secure at least a temporary advantage. String enough such temporary advantages together through time, and you have a recipe for success.

Mass production

(or the magic of the Model T)

Until fairly recently, mass production and economies of scale ruled most industries. Henry Ford realized that producing hundreds of thousands of Model T's on an assembly line would allow him to undercut the competition...

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