Every business strives for increased performance and higher productivity while maintaining operational costs.
To achieve a higher productivity in business, enterprises need to automate their workflows in cost-effective ways. Automation can help them spend less time on simple tasks such as data entry and invest more time in accomplishing complex tasks.
In this automation process, ERP integration plays a critical part. It connects all enterprise systems and automates simple processes to help businesses achieve better performance and productivity.
Read on to get answers to any questions you may have about ERP integration.
What is ERP System Integration?
ERP system integration is the method to connect an Enterprise Resource Planning (ERP) system with other applications. A business can integrate all of its other services and applications with an ERP.
ERPs are comprehensive software that incorporate multiple modules.
When an ERP integrates with other applications, it helps businesses automate day-to-day tasks and save big blocks of time for focusing on more important and demanding business operations.
Furthermore, ERP system integration helps sync data in correct and useful formats. After syncing, it makes the data accessible to other applications connected with it.
Businesses can integrate their ERP to sync information from many other data sources: customer relationship management (CRM) system, human resource management system, supply chain management system, and more.
The objective of using ERP systems is to get a unified view of data across enterprise systems, enhance communication, and create a reliable source that provides comprehensive data.
What are the Benefits of ERP Integration?
When an ERP integrates with other data storage systems, its benefits are manifold. Let’s look at some of these:
Easy Access to Data
By connecting multiple information systems, ERP integration helps employees access real-time data on the move.
Better ERP integration results in more data that helps businesses make better, data-driven decisions.
Keeping multiple data sources requires businesses to make hefty investments.
ERP integration combines multiple systems and facilitates a single and comprehensive data source which is certainly more cost-effective than managing a range of data storage systems.
Manual data entry to systems is grueling and more prone to human errors. With ERP integration, businesses can eliminate this manual task and move data from one system to another automatically and efficiently.
This automation helps them invest their time in doing different tasks and efficiently managing workflows.
More Time for Complex Tasks
When tasks like data entry become automated, employees get enough time to spend on complex tasks.
These are the tasks that require more time and attention to complete. When employees do not need to do manual data entry, they can invest more time to develop strategies for increasing business revenue.
ERP integration connects various departments of an enterprise and creates a centralized data platform. A centralized platform reduces the need for manual data transmission and makes a single database readily accessible across the enterprise.
For example, in a manufacturing company, as soon as a new purchase order comes in, the ERP software can automatically process it and make it available to inventory, shipping, and finance departments.
What are the Different Types of ERP Integration?
eCommerce-ERP integration refers to the connecting of a business eCommerce site with a backend inventory management and accounting system (i.e. ERP.)
Proper integration between these systems enables data to flow from one system to another. Once this data enters into the ERP, it stores the data forever.
By integrating an ERP to its eCommerce site, a business can better manage its database.
ERP integration offers businesses an easy way not only to handle their eCommerce site but closely connect to their suppliers and consumers.
When an ERP successfully integrates with eCommerce, it streamlines front to back flow of business operations. With this capability, businesses can rapidly transfer information such as sales orders, stock availability, customer profiles, pricing, and more to meet the demand.
While a CRM handles customer interactions on the front end, an ERP manages business processes at the back end. ERP integration with a CRM provides a complete picture of customer journey right from when they place an order to the shipping.
This type of integration helps businesses manage information about each customer- from their demographics and communication with the enterprise to purchase history.
It also empowers employees to deliver effective and more personalized customer service.
Furthermore, it ensures that CRM and ERP communicate seamlessly and share the required data consistently.
ERP integration with CRM helps businesses gather the data they need to make better decisions to improve business relationships with customers.
Project Management-ERP Integration
A project management system holds data concerning the core business processes of an enterprise. The enterprises using a third-party project management system need to integrate it with the ERP.
One of the basic purposes of project management and ERP integration is to provide a single and useful platform for aggregated data on processes, tasks, workflows, and projects.
It also helps businesses allocate resources that a project requires to complete. This type of integration mainly focuses on utilizing the fixed resources and maximizing returns on them.
By integrating with a project management system, an ERP provides essential information that helps monitor and control project progress.
With this integration, employees get a complete view of finished and in-progress projects, see which team is working on a particular project, and what other projects are coming up.
Business Intelligence-ERP Integration
One of the most useful tools that businesses need is Business Intelligence (BI) software. BI software collects and analyzes internal data, helping enterprises discover insights. By providing these insights, it enables enterprises to identify new and innovative business practices.
A Business Intelligence system adds intelligence to the ERP data to generate insights that lead to improvement of IT performance and enhanced decision-making capability within the enterprise.
When a BI system integrates with an ERP, it analyzes the collected data using business intelligence. After analysis, it presents the data in the shape of dashboards and interfaces that are easy to understand and help identify actionable opportunities.
What Strategies can help Achieve ERP Integration?
Integration Platform As a Service (iPAAS)
iPAAS solutions are designed to address ERP integration problems and make integration easier. Typically, they are cloud-built and support API publishing, data integration, application integration, on-premises integration, B2B ecosystem integration, and more.
They have a central API integration platform that facilitates an integration lifecycle, workflow design, connectivity, data mapping, and transformation. Through an API platform, iPAAS can connect to ERPs, CRMs, proprietary systems, and customer service applications a business may have.
Point-to-point integration simplifies connecting multiple systems and applications. This type of integration refers to connecting each tool or software individually to an ERP software.
This integration method can become difficult since it requires a business to conduct separate integration for each system they want to use.
Furthermore, this process can also get complicated as a business keeps adding more and more apps. However, businesses can still opt for this type of integration strategy when they want to ensure each application integrates well with an ERP.
Enterprise Service Bus (ESB)
An enterprise service bus is the latest strategy in the integration sector. In this integration, businesses can connect their applications through a communication bus which serves as a tool for applications to communicate.
One of the many benefits of this integration is that other apps do not need tweaks when a new component is added. ESB centralizes all the communications and is a more straightforward approach than a point-to-point integration.
It easily accommodates new applications. As soon as a new app is ready, IT teams can easily incorporate it into other systems by simply hooking it up to the bus.
ERP Integration: Challenges
Difficulty with ERP integration depends on the approach of an enterprise towards implementing an ERP system.
Some implementation may take years, beginning with one ERP and gradually connecting other modules and applications over time.
While businesses may aim to develop a few functional modules, they may end up creating an ERP with lots of applications alongside it.
This kind of enterprise architecture pattern can pose challenges when integrating an ERP with the rest of the systems.
Besides this, there are many potential hurdles that businesses need to overcome in order to unify their ERPs with other enterprise systems.
Listed below are some of the common ERP integration challenges:
- ERP integration can become brittle with the tightly coupled applications that rely on other old systems. It may be costly to migrate and modify them to a new ERP system.
- New ERP implementation requires trained staff. Getting functional groups and employees to change the way they work and adopt new ERP solutions can take a lot of time and effort.
- Enterprises may have the data residing in multiple locations such as accounting systems, spreadsheets, and perhaps papers. Migrating data from a number of old systems to a new database in the ERP can take a few months to a year.
By adopting the right strategies, businesses can overcome integration challenges and achieve seamless integration between an ERP and other systems.
Achieving ERP integration can lead businesses to automation of fundamental tasks.
Through automation, a business improves employee performance and makes them more productive, without increasing operational costs.