Enterprise IntegrationThe basic lev

Enterprise Integration
The basic level of integration is the internal operations of individual firms. To inexperienced
managers, the integration of functions under the managerial control of one enterprise
might appear easy to achieve. In actual practice, some of the most challenging
integration issues involve cross-functional trade-offs within a specific company. As
noted earlier in the discussion of systems analysis, functional management is deeply
embedded as best practice within most firms.
Internal Integration Barriers
Managers do not attempt to integrate operations in a vacuum. It is important to recognize
barriers that serve to inhibit process integration. Barriers to internal integration
find their origins in traditional functional practices related to organization, measurement
and reward systems, inventory leverage, information technology, and knowledge
hoarding.
Organization
The organization structure of a business can serve to stifle cross-functional processes.
Most business organizations seek to align authority and responsibility based on functional
work. In essence, both structure and financial budget closely follow work responsibility.
The traditional practice has been to group all persons involved in performing
specific work into functional departments such as inventory control,
warehousing operations, or transportation. Each of these organizations has an operational
responsibility, which is reflected in its functional goals.
To illustrate, transportation and inventory have traditionally been managed by
separate organizational units. Created in isolation, goals for managing transportation
and inventory can be contradictory. Transportation decisions aimed at reducing freight
cost require shipment consolidation, but transportation consolidation typically causes
inventory to increase.