Tech Insights 4 min read

The Hidden Costs of Disconnected Systems

Published May 14, 2024

In the rush to keep up with the latest technological advancements, it’s easy to overlook the hidden costs lurking within your existing systems. Disconnected applications, fragmented data, and manual processes may seem like minor inconveniences, but their cumulative impact can significantly drain your company’s time, resources, and ultimately, its profitability.


The Cost of Manual Data Entry

Consider the astounding amount of time your employees spend manually transferring information between disparate systems. Sales teams duplicate customer data into spreadsheets, finance departments re-enter invoices across platforms, and production managers tediously update inventory levels in multiple locations.

These repetitive tasks not only consume valuable hours but dramatically increase the potential for human error. A misplaced decimal, a misspelled name, or an incorrect product code can lead to costly consequences such as overstocking, delayed shipments, and customer dissatisfaction.


Delays and Missed Opportunities

When critical business data remains trapped in isolated silos, decision-making becomes sluggish and prone to error. Your sales team may lose potential deals because they can’t access real-time stock information. Production schedules might be disrupted due to a key component mistakenly listed as available. These delays aren’t just frustrating, they can result in lost sales, strained customer relationships, and a tarnished reputation.


The Impact on Innovation and Morale

The cost of disconnected systems goes far beyond immediate financial loss. When your team spends their days mired in tedious workarounds and rectifying errors caused by fragmented systems, they have little time or energy left for innovation and creative problem-solving. This stifles your company’s ability to adapt, improve, and stay ahead of the competition. Over time, the constant frustration generated by inefficient systems can erode employee morale, ultimately impacting productivity and staff retention.


The Real Cost of Disconnection: A Case Study

The true cost of operating with disconnected systems becomes starkly apparent when we examine a real-world example. In the case study, “Operational Impact of Information System Integration on Cost Efficiency, Inventory Control, and Timeliness in Citrus Supply Chain Dynamics” a Moroccan citrus packing station discovered that their disjointed systems were significantly hindering their operational efficiency and impacting their profitability.


The case study provides compelling statistical evidence of the improvements achieved through integrated information systems:

  • Operational Cost Reduction: The researchers’ analysis showed a clear connection between using integrated information systems and reducing costs. Their findings also indicate that these systems were responsible for a significant portion of the cost savings observed by the citrus packing station. In fact, the study suggests that integration can explain over 70% of the improvement in operational costs.
  • Inventory Management: The study’s analysis clearly shows that information systems play a major role in improving inventory management. The results indicate that over 60% of the improvement in inventory management can be explained by the adoption of integrated information systems.
  • Delivery Timeliness: The study showed that integrating information systems led to a significant improvement in on-time deliveries. In fact, over two-thirds of the improvements in delivery timeliness were directly linked to the implementation of these systems, highlighting their positive impact on customer satisfaction.


The Bottom Line:

While the specific cost savings achieved by this citrus packing station may not apply directly to every business, the underlying message is clear: Disconnected systems lead to inefficiencies, errors, and missed opportunities that directly impact your profitability.


Unlocking the Power of Integrated Systems: A Strategic Step for Your Business

Don’t let disconnected systems hold your business back. Contact SABS to explore how we can help you build a more efficient, resilient, and profitable future.



Source: BENTALEB, F. Z., & TAKI, M. (2023). Operational Impact of Information System Integration on Cost Efficiency, Inventory Control, and Timeliness in Citrus Supply Chain Dynamics. International Journal of Accounting, Finance, Auditing, Management and Economics, 4(6-2), 671-687.