Connectivity

Connected vs. Integrated

Integrated or Connected? Exploring the consolidation that happened, and needs to happen, in HCM software

Integrated or connected, what is the difference?

In the world of enterprise software, the term “integrated” is used liberally to describe systems that “connect” and pass data to each other. But the word integrated suggests these systems are actually woven together, which is rarely the case. At Bulger Partners, we debate these nuances frequently, and most of what we see in software today are connections, not integrations.

Every software sector has experienced, and continues to experience, some level of consolidation. Often, as we’ll discuss below, the consolidation is driven by the desire or need to expand product capabilities and deliver additional solutions to customers. Every organization evaluates build versus buy strategies, and often there are compelling reasons to acquire an existing platform rather than build it from scratch.

An interesting case study can be found in the Human Capital Management (HCM) industry, where rapid and increasingly expensive consolidation occurred between 2005 and 2012. While this consolidation created connectivity between offerings and has no doubt improved the offerings of the HCM industry, new demands from vendors will require enterprise software companies to take the next step towards true integration.

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