The economics of integrations 

When is iPaaS worth the investment?

By Asgeir Olafsson

In today's complex IT landscape, the fragmentation of information across isolated systems—commonly known as data silos—poses significant challenges for organisations. These silos hinder operational efficiency, prevent informed decision-making, and can lead to increased costs. A 2023 report highlighted that 75% of enterprises grapple with data silos, resulting in operational inefficiencies and missed opportunities. But how—and when—should businesses address this issue?

To resolve this pressing challenge, many IT leaders are turning to Integration Platform as a Service (iPaaS). iPaaS is a cloud-based solution that seamlessly connects disparate applications and data sources, both on-premises and in the cloud. 

The Business Case: When to Act?

Imagine a mid-sized company with 800 employees across multiple locations. Their HR department relies on several disconnected software applications—one for payroll, another for time tracking, a separate recruitment system, and an outdated learning management system. None of these applications communicate seamlessly, creating major inefficiencies for both HR and IT.

The IT department faces ongoing challenges in maintaining data consistency across these systems. The HR team wastes hours manually reconciling discrepancies, while employees become frustrated with outdated self-service portals that don’t reflect real-time data on benefits, leave balances, or training progress.

More critically, compliance becomes a risk. With regulations like GDPR in place, HR must ensure accurate employee records and secure personal data. However, siloed systems make audit trails difficult to track. Additionally, manual data transfers—often via unsecured channels such as email—expose the organisation to security vulnerabilities.