SaaS Integration Guide: Importance and Benefits
Michael Hickins | Senior Writer | October 7, 2024
Business leaders rely on data collected from multiple applications to make better decisions and collaborate more efficiently. While business units have typically relied on applications that support their individual functions—for example, human capital management applications for HR teams and ERP applications for finance teams—it’s the ability to combine these applications, and the data they produce, that can yield the most actionable insights from analytics and AI services.
The process of integrating software-as-a-service applications, with other SaaS apps as well as with on-premises apps, is crucial but complicated. Challenges include programming languages that are decades apart in sophistication, the security issues that arise when dealing with multiple cloud vendors, and the inevitable complexities of trying to manage multiple point-to-point integrations among myriad applications, such as finance, procurement, manufacturing, supply chain, HR, sales, and marketing.
Enterprise architects and developers have found that most successful application integrations make use of integration platforms that help simplify connectivity and automate processes to address these challenges.
What Is SaaS Integration?
SaaS integration involves connecting disparate software-as-a-service applications with each other, as well as with custom-built and off-the-shelf on-premises applications, to allow their data and the processes they manage to be shared and linked across organizations and partner ecosystems. Because individual lines of business rather than centralized IT departments often acquire SaaS applications, they tend to be from a variety of different vendors and thus not natively integrated.
Many of a company’s applications are highly interdependent—for instance, an HR application used to onboard an employee must also be able to interconnect with separate applications that initiate pay, assign key cards, and allocate other resources. SaaS integration is also a major issue after a big acquisition, as the acquiring company needs connect its finance, HR, supply chain, and other SaaS applications with those of the acquired business. Seamless integration among all these applications is crucial to creating the right workflows without having to resort to manual, tedious, error-prone processes.
SaaS Integration vs. App Integration vs. API Integration
SaaS integration refers to the integration of SaaS (software-as-a-service) applications with other SaaS applications and/or with applications located in on-premises data centers, including custom applications. Enterprises typically use cloud-based integration platform as a service (iPaaS) and prebuilt connectors and templates to help ensure that integrations can be managed at scale and that connectivity isn’t disrupted by quarterly SaaS updates from the different vendors that provide them.
App integration refers to the integration of custom and packaged on-premises applications, including legacy applications that have been extensively modified. Enterprise IT departments typically use middleware, enterprise service buses (ESBs), and message queues to connect these systems. This process requires managing different data formats and communications protocols and typically entails extensive custom coding.
API integration involves connecting applications, data, and services through application programming interfaces (APIs), allowing them to communicate and exchange data. API integration enables enterprises to extend an application’s functionality—for example, to add vacation planning functionality to a core HR system. Businesses can use one of several standard protocols, such as SOAP or REST, along with other API management tools to do things like connect a payment gateway to an ecommerce platform or connect a timesheet application to a banking system, as well as to integrate a third-party application, such as a mapping app, with a company mobile app.
Key Differences
SaaS integration typically focuses on cloud application and data service APIs, uses prebuilt connectors, and is intended to support scale, speed, and ease of use. Integration-platform-as-a-service (iPaaS) solutions help simplify all aspects of SaaS integration.
Application integration tends to be more complex and involves diverse systems, such as legacy (including mainframe), packaged, and custom-built on-premises applications.
API integration centers on using APIs to facilitate real-time data exchanges, to extend the functionality of standard finance, HR, supply chain, sales, and other applications. It typically requires deep technical knowledge of APIs, how they need to be orchestrated, and security policies.
Key Takeaways:
- SaaS integration helps businesses make the most use of their technology investments by allowing applications from different vendors and in different departments to communicate and exchange data with little to no manual intervention.
- Eliminating data silos enables fuller automation of processes and builds trusted sources for predictive analytics and AI.
- Using iPaaS to perform SaaS integration can help accelerate project delivery and reduce the complexity of creating multiple point-to-point custom integrations. This helps reduce the risk of error, lower the cost of operations, and make it easier to maintain integrations as SaaS providers publish quarterly updates.
- Enterprise developers and architects face a number of SaaS integration challenges, including security and regulatory compliance requirements and the need to ensure that data is shared across applications on a timely basis so that crucial business processes are not adversely impacted.
SaaS Integration Explained
SaaS integration helps businesses make the most efficient use of their technology investments by allowing systems from different vendors and in different departments to share data in a timely manner. This integration can help automate a number of related business activities, such as providing security clearance, kicking off employee provisioning, and initiating new-employee onboarding processes related to, but not directly the province of, HR. It also helps provide a trusted data foundation for advanced data analytics and other forms of artificial intelligence.
Put another way, SaaS integration provides for a virtuous cycle of information flows and event-based synchronization that enterprises require to help their employees make better informed decisions.
Larger organizations often use enterprise iPaaS (EiPaaS) systems for SaaS integration, which helps IT staff maintain those integrations as disparate SaaS applications are updated quarterly and as the number of applications grows.
Most successful SaaS integrations also avoid custom coding as much as possible, as custom code is more difficult to maintain and automate. To accelerate delivery and simplify operations, IT departments use prebuilt connectors and templates whenever possible, especially for the most popular enterprise SaaS applications.
Why Is SaaS Integration Important for Business?
In a world where most large companies have acquired applications from a variety of vendors, often over the course of decades, it’s crucial for them to integrate those applications to form a more comprehensive, shareable source of financial, supply chain, HR, sales, marketing, and other information. Only then can business leaders make the most informed decisions, in part by applying AI to their vast, integrated sources of data.
Benefits of SaaS Integration
Integrating SaaS enterprise applications with other applications and data, across clouds and on-premises data centers, helps organizations get the most out of their technology investments and empowers business leaders to make decisions based on the most complete, reliable, and timely data. The following examples illustrate some of the benefits of such integration.
- Data from an HR onboarding application can be used by a facilities application to issue a key card with appropriate privileges to a new employee.
- Data from an ecommerce app can set off a purchase requisition to replenish inventory depleted by a recent sale.
- A global logistics and delivery company significantly increased the productivity of its finance team by creating a digital assistant that helped automate some 25 different business processes, including purchasing, invoicing, and expense inquiries, which it was only able to accomplish thanks to a holistic integration strategy.
- A retailer can apply AI to historical sales data from a SaaS ERP application combined with data from a merchandising application and data from a third-party weather app to predict which locations it should place more inventory of wool scarves.
- Customers buying online will get the latest information about product availability because data from the seller’s ecommerce, inventory, and store merchandising systems are updated on an event basis, meaning that updates to data in one system, such as a new customer order, are made available to other “subscribing” systems, such as inventory management.
- Real-time availability of data helps business leaders make more informed decisions quickly, improving organizational effectiveness and agility. This helps align systems of record and intelligence.
- SaaS integration helps enterprise software developers and architects enforce data governance policies by improving data consistency across applications, data, and partner ecosystems.
- Automating SaaS integrations using iPaaS helps minimize errors and frees up resources for more strategic tasks. It also helps lower IT costs by reducing the need for custom integrations, simplifying operations, and minimizing maintenance and upgrade efforts.
Challenges of SaaS Integration
The software developers and architects responsible for integrating SaaS applications face a number of challenges, including scalability, security, data synchronization, and the complexity of configurations. More on those and other challenges below.
- Scalability and performance. As businesses grow, so does the volume of data and the number of application integrations. Ensuring that these integrations scale efficiently without compromising performance is a significant challenge. For example, the website operated by a rapidly expanding ecommerce company might experience delays and performance issues when new SaaS applications for logistics and marketing are implemented because of the increased data load and transaction volume.
- Complexity of integration. Integrating multiple SaaS applications often involves complex configurations and customizations, requiring considerable technical expertise and resources and increasing costs. For example, regulatory constraints and differing data formats can create additional complexity for a healthcare provider integrating patient management, billing, and electronic health record systems.
- Security and compliance. Enterprises integrating SaaS applications must comply with a host of internal, industry, and cross-industry regulations, including those governing information security. Noncompliance can lead to severe legal and financial consequences, and in the case of security breaches, fines and reputational damage.
- Maintenance and upgrades. Ongoing maintenance of SaaS integrations and extensions can be challenging, especially when SaaS vendors release updates that might break existing integrations and automated processes. For example, a manufacturer using SaaS applications for supply chain management might face disruptions when an update to the inventory management system requires enterprise software architects to recode and test their existing integrations with the company procurement system.
- Lack of real-time integration. When event-based data synchronization between SaaS applications fails, delays in data updates can lead to inefficiencies and missed opportunities. For example, a global logistics company would be unable to provide updated shipping status if real-time integration between its tracking, billing, and customer notification systems breaks.
How to Integrate SaaS Applications
- Assess business needs and objectives. Identify the specific business processes that need to be integrated and understand the objectives, such as data consistency or real-time access, then gather requirements from stakeholders. A retailer wanting to integrate its CRM and ERP systems to help ensure customer data is consistent across sales and inventory management will want to collect business requirements from stakeholders in sales, finance, and procurement, as well as technical requirements from business analysts.
- Select the right integration platform. Choose an integration platform that supports the required use cases as well as scalability, security, and compliance needs. Consider iPaaS solutions for comprehensive integration and business automation capabilities. Seek full coverage for all required applications and data synchronization use cases.
- Design the integration architecture. Outline the integration architecture, including the data flow, integration points, and the use of APIs or connectors. Plan for scalability and other future requirements.
- Map data and define workflows. Identify the data to be integrated, map data fields between systems, and define workflows to automate business processes. Confirm data consistency and accuracy. For example, enterprise software architects at an ecommerce company can map customer data fields between its marketing automation and customer support systems to confirm that service agents can provide customers with relevant and personalized experiences.
- Develop and configure integrations. Use an integration platform to develop and configure SaaS integrations, including setting up connectors for APIs and custom logic to handle specific business rules.
- Test integrations thoroughly. Conduct extensive testing to confirm that the SaaS integrations work as expected, including unit tests, system tests, and user acceptance tests. Validate data accuracy and process workflows. For example, a telecom company evaluating its integration of billing and ERP systems should test the accuracy of invoice generation.
- Deploy integrations. After extensive testing, SaaS integrations can be rolled out to a production environment, ideally at a time when disruptions to business operations are minimal. Plan for a rollback strategy in case of problems.
- Monitor and maintain integrations. Continuously monitor integrations for performance, security, and compliance with internal, industry, and other regulatory requirements and standards. Regularly update and maintain integrations to accommodate changes in SaaS applications and business requirements. Confirm that outside consultants transfer all relevant knowledge to enterprise software architects.
Get the Benefits of SaaS Integration with Oracle
One of the main challenges with SaaS integration is that it rarely involves simply connecting one application with another, but rather orchestrating updates across myriad applications, data sources, and even partner companies. Having one integration platform for all business systems unifies the flow of data, helps enterprise architects connect SaaS applications with confidence, and allows them to focus on higher-impact business automation and innovation initiatives rather than technical blocking and tackling. The Oracle Integration platform can connect any SaaS application with other applications, data, and partners in a distributed cloud environment. The platform includes prebuilt connectivity with commonly used SaaS applications, including those from Oracle, Salesforce, Workday, Snowflake, and ServiceNow.
By connecting different SaaS applications, organizations can help improve workflows and minimize manual data entry while integrating data from multiple sources to provide a more comprehensive view of the business, enabling better-informed decision-making. In addition, automating tasks and processes through integration can help boost employee productivity and reduce costs while providing a better customer experience.
SaaS Integration FAQs
What is a SaaS integration?
SaaS integration automates connectivity of applications, data, and partners across clouds and on-premises environments, typically using iPaaS prebuilt connectors to simplify project delivery and operations.
What does iPaaS stand for?
iPaaS stands for integration platform as a service.
What is a SaaS API?
A SaaS API is an application programming interface that uses a commonly accepted protocol allowing applications from disparate providers (and sometimes written in different programming languages) to exchange data.