Local governments across the country are adopting modern, cloud-based SaaS solutions – especially financial applications – in record numbers to help them operate more efficiently. Many of these SaaS applications provide enhanced functionality and/or better point solutions over and above the applicable modules available via legacy accounting/ERP systems. So, local government leaders and IT staff are often faced with a perplexing question, “What is the best way to have these disparate systems ‘talk’ to each other?” Or, to paraphrase Shakespeare, “To integrate, or not to integrate…that is the question.”
While every local government leadership team ultimately needs to make such decisions for themselves, this article aims to provide key context and questions to consider to help facilitate that process.
On paper, the idea of enabling two different software products to share a common data set seems like a great idea. In fact, governments of all shapes and sizes spend hundreds of millions of dollars every year on ‘systems integrations’, so that money can’t all be going to waste, right? The answer is – of course not. In fact, there are certainly circumstances when system integrations are a must.
Generally speaking, the primary factor driving the requirement to integrate software applications is the ‘need for speed’. In other words, if it is imperative that information flows seamlessly from one system to the next in real-time, then integrating those systems is the only reasonable option. A great example of this need for speed is emergency updates, such as Amber Alerts. If an Amber Alert is activated, everyone involved needs that information to move as quickly as possible from public safety databases to community alert services to highway messaging platforms, etc. The real-time distribution of that data is mission critical.
It’s harder to find examples of when the real-time distribution of local government financial data has such life-or-death implications. But, one example of when at least near real-time data would be important is payroll systems, especially for hourly employees. As a rule, people strongly prefer the correct amounts in their paychecks, so a strong case can be made that your timecard system should connect seamlessly with your payroll module which should, in turn, automatically transmit the correct information to your outsourced paycheck provider.
In short, when considering whether to integrate – or not – a great place to start is to ask yourself if there is a need for speed (i.e., “Is there a critical need for information to flow from one system to the other in real time?”). If the answer is “No”, then you can probably save a lot of aggravation (and money) by considering a batch update, instead.
By the way, a great corollary question to ask is, “Is the data that we want to integrate being inputted in real-time in the first place?” We had a customer who was considering a real-time online update of their open checkbook until it occurred to them that they were only updating the reconciled checks in their accounting system on a monthly basis.
If you’ve ever been involved in an accounting system integration project, you know from experience that they are generally about as much fun as a root canal or a surprise tax audit. Below are a few common integration pitfalls and some tips to keep in mind if you decide to descend this slippery slope.
As noted above, the primary advantage of system integration is the ability to share data that needs to be handed off in real-time. However, integration projects that begin with a focused objective are often derailed by a seemingly innocent question…
“Wouldn’t it be nice if…?”
These words are uttered by well-meaning sorts who do not generally appreciate the complexities of enabling two software applications to play nice together. Before you know it, what started as a focused, need-based project has devolved into a hodgepodge of nice-to-haves.
Tips to Scuttle Scope Creep
- Focus on real time: Focus only on integrating data that must be transferred in real-time from one system to another
- Talk with the team: Ensure that all stakeholders fully appreciate the complexities of system integration BEFORE you start down this path
- Complexity is costly: Remind everyone – consistently – that more integration points means more moving parts which means significantly more opportunities for breakage down the line. (See The Ugly section below.)
It Takes Two to Tango
By definition, integrating systems means connecting one application to at least one other application. Unfortunately, the most common – and most frustrating – system integration horror stories go something like this:
- Client to Vendor A: “We use Vendor B for our accounting platform. Can you integrate with them?”
- Vendor A: “Oh sure. We’ve connected with Vendor B before.”
- NOTE: That may be a true statement, but…
- Client signs system integration contract with Vendor A and the project begins.
- When Vendor B comes into the picture, their feedback is one of the following:
- “Vendor A connected to a different version of our platform – not the one you have.”
- “Vendor A doesn’t have a standard connection with us, it was customized for one client.”
- “Sure, we’ll build a connection to Vendor A for you…it’ll cost an additional $XX thousand.”
- “Um…sorry to tell you this…but we no longer work with Vendor A.”
Tips to Tangoing without Tripping
- Trust, but verify: In the example above, it’s unlikely that Vendor A was outright lying to the Client, but it’s often the case that they don’t know what they don’t know when it comes to integrations.
- Get commitment: Make sure that you get a firm commitment from all involved parties that the integration can be supported, NOT just the vendor who is currently trying to sell you an integrated solution.
- APIs are not silver bullets: Just because one vendor or the other says, “We have an API.” does NOT automatically mean that integrations are easy and/or cheap.
It may seem obvious, but it’s worth at least a quick mention that whenever you create an external, third-party connection to any of your internal systems, you also create a potential back-door security risk – opening up a potential pathway for hackers or ransomware. To mitigate this risk, make sure that any integration with your systems is fully encrypted and that the applicable vendor has security and escalation plans in place to prevent breach and/or provide real-time notification if such prevention methods prove ineffective.
The Money Pit
Last but not least, integration projects that are originally estimated to cost $X, often end up costing $2X, $3X, or more. As mentioned above, not all system integration expenses are going to waste…but a lot of them are. Here are three pitfalls that generally lead to these unexpected costs:
- Scope Creep – the more you want to integrate, the more it’s going to cost
- Unbudgeted costs from vendors on the other end of the connection
- The integration is “more complicated than expected”, so more project hours leads to more professional services fees.
Tips to avoid falling into the Money Pit
- Avoid scope creep: Avoid it at all costs. (See what I did there?)
- Confirm ALL costs: Make sure you understand ALL of the costs from ALL of the vendors
- Negotiate a fixed-fee integration: Make sure that your vendor is obligated to do whatever it takes to make the integration work – no matter how complicated the project becomes
If you’ve read this far and you’re still determined to make an integration work, or if you have mission critical data that must be shared in real-time, then there is one more important factor that you need to keep in mind. In short…
System integrations break!
Software development is complex – if it was easy, then anybody could do it. And, when you integrate two software applications, you don’t add up the complexities … you multiply them. It is virtually a foregone conclusion that at some point, one or more of the vendors involved will add a feature, or fix a bug, or make some other change to their application that will inadvertently cause the integration to stop working the way it was intended – or perhaps stop working altogether.
When this happens, you and your team will not only be significantly inconvenienced by the downtime, but you will have to pay someone – again – to fix it. Many software developers make the bulk of their revenues on professional services and maintenance fees. There is a reason, after all, why the system integration market is over $300 billion dollars annually.
For all of the reasons outlined above, pursuing a system integration simply for convenience generally ends up having the opposite effect. With that said, certain circumstances necessitate a real-time system integration, and you are left with no choice but to head down that path. Hopefully, this article will help prepare you to ask the right questions and confirm critical assumptions before you are too far up the proverbial creek without an adequate means of transportation. With ClearGov’s Budget Cycle Management suite, zero integrations means zero maintenance costs. Schedule a quick demo to see what ClearGov can do for you!