Integration, integration, integration

Businesses are faced with multiple challenges from shareholders, customers and regulators. Shareholders want bigger returns; investors are looking for cost-effective fund management, regulatory authorities demand stricter rules while customers want cheaper faster better services.

The three key challenges, therefore, facing most business sectors are to improve profits, to improve customer service and to ensure compliance with new regulations. Meeting this triple challenge, inevitably, relies on technology. More effective technology can push profits up through better productivity and greater efficiency. It can also improve customer service through better use of data and enable regulatory compliance.

In the current economic climate, maintaining profitability is no easy task.
Businesses are faced with fundamental changes in infrastructure and need to make significant investment. The shift to areas such as telephone and Internet customer service, for example, has not only placed an additional burden on overstretched technology, it requires a radical overhaul of business processes. Emphasis is moving to an integrated multi-channel model where customers expect consistent multi channel service.

Faced with the need for such radical change in business processes and infrastructure, some organizations are considering outsourcing some of the processing load as a means to improve profitability. Outsourcing office activities such as email and file management can, for example, bring savings of as much as 40% in processing costs. Not only can these savings be passed on to customers to increase competitiveness, they can also feed back into re-positioning the company's brand identity. Fast, efficient processing can help to redefine a traditional brand and align it with contemporary expectations.

Infrastructure renewal must, of course, be accompanied by rigorous performance monitoring to ensure that gains in profitability are maintained. Many industries are moving towards standardised performance metrics that can give senior executives and board directors a fast and effective overview of performance and aid important decision-making.

As if accommodating new forms of business and satisfying customers were not enough, organizations are also faced with the spectre of new regulations governing their activities.

The common thread running through all of these challenges is integration.
Indeed, companies in all industries now face the same integration issues that were experienced by manufacturing industry during the 1990s as it moved towards enterprise resource planning (ERP). Organizations need to bring together a wide range of different processes based on different technologies and synthesise them into a coherent whole.

Over the last three decades, different layers of business process have grown up around whatever technology vogue was in favour at the time - from mainframe and minicomputers in the 1970s, through PCs and networks in the 1980s, to the Internet and Web in the 1990s. Clearly this patchwork of processes and technologies must be brought together and rationalised.

The first integration priority is channel integration. Organizations can achieve this by putting common processes in place that are capable of serving any combination of channels. If a customer phones a call centre with a query about an item on the Web site, the call centre agent must be able to access the Web page and customer account details simultaneously. The rationalisation of business processes offers substantial savings and efficiency improvements. It also impresses customers.

But it is not only front-end, customer facing processes that need integrating.

Further gains in profitability can also come from integrated back office processes. More importantly integrated back office processes enable compliance with the demands of risk management and reporting regulations.

Technology integration underpins the drive to integrate channels and business processes. Organizations need a common framework on which to accommodate existing communications channels and build new ones. When interactive digital television, for example, begins to catch on, they do not want to have to go back to the drawing board again. They want to be able to integrate novel forms of access with those that already exist.

Hansabank, the leading financial institution in the Baltic States, provides an example of how integration can work. Hansabank has been a pioneer in the implementation of comprehensive, innovative IT and e-banking solutions.

The Hansabank banking system, which covers three markets with specific requirements, different currencies and languages, runs on a single integrated Oracle platform. It manages current accounts, loan accounts, securities, cross-border payments and leasing solutions. It is managed from a single centre in Estonia, where the automation of most of the back-office processes has enabled Hansabank to cut its IT infrastructure costs. Over 340,000 customers use Hansabank's on-line banking facility.

There can be no doubt that most organizations face some formidable challenges. Against a background of uncertain economic conditions, structural change in the market, growing customer demand and ever advancing technology, they must increase their profits, please their customers and meet increasingly strict regulations. While this may seem a tall order, it is not impossible. Integration of channels, of business processes and of technology systems is the essential first step which will lay the foundation for the changes yet to come.