An enterprise resource planning (ERP) system is considered the core of a business. It’s where every business function is managed, like financials, customer records, inventory, and so much more.
It’s one of the most valuable tools in a business toolkit. However, it may not be reaching its full potential if it’s not connected to the other tools and applications a company uses.
Ask yourself these questions:
- Do you spend too much time on manual data entry into your ERP system?
- Do you hop from one platform to the next each day?
- Do you have trouble finding what you’re looking for and what system contains the data you need?
If this sounds like you, an ERP integration is what you need.
The idea of an ERP system integration might sound like a daunting task. And we’re not going to tell you it’s a walk in the park. The process can be complex, especially for companies with a lot of different software applications. But you can build a highly efficient, secure, and integrated technology infrastructure with the right strategy and planning.
This article guides you on that journey by outlining the benefits, methods, and types of ERP integrations. But first, let’s level-set with some basic definitions of enterprise resource planning.
What is Enterprise Resource Planning (ERP)
Enterprise resource planning is software designed to manage business processes like financial management, human resources, supply chain, and inventory management in a single platform. ERP systems are used within businesses of all sizes and are deployed either on-premises or with a cloud-based solution.
You can learn more about ERPs by reading our article, Top Benefits of ERP Business Software.
What is ERP System Integration?
Now that you understand what an ERP system is and its benefits, let’s take a closer look at ERP integration. ERP system integration is the process of connecting your ERP software with other systems and applications.
For example, you can integrate with your eCommerce, customer relationship management (CRM), human resource management, supply chain management, marketing, analytics, electronic data interchange, and other databases your company uses. By connecting all your data points and systems, you can sync your business data and streamline business processes.
Why is ERP System Integration Important?
The goal of connecting ERP and other business management software is to have a unified, single source of data across your enterprise systems to make more informed business decisions. Without that single source of truth, you’ll experience a domino effect of issues. Here are a few reasons why an ERP integration strategy is important:
Manual Data Entry
ERP integration helps eliminate the time-consuming, error-prone work of data entry. For example, if a lead form is submitted from your eCommerce site, it will sit in that system until it’s manually transferred and entered into your ERP system. However, if your ERP has eCommerce integration, the lead automatically enters your ERP without any manual work.
Lack of Real-Time Data
If you manually enter data into separate systems, you’ll never achieve real-time data. What happens to the business when leaders make decisions based on outdated information? Or your customer support teams are trying to troubleshoot a customer issue without the latest data at their fingertips. When all your data sources are connected to your ERP system, real-time data flows between systems, and everyone is working on the latest, most accurate information.
Benefits of ERP Integration
The benefits of ERP integration span the entire business. Here are a few of the top benefits:
Automate Business Processes
By integrating your systems into a centralized platform, you can ditch a lot of manual work and automate business processes throughout the company. The best example of this is in the manufacturing industry. Once a new order comes in, ERP systems can automatically process the order to show up in inventory, shipping, and finance systems. ERP systems can help you streamline business processes and workflows across different departments.
Supply Chain Optimization
In times of supply chain disruption, like we’ve seen in recent years, having a fully integrated ERP system can be a make-or-break business decision. By using real-time information, insights, and trends, you can act instantly, increasing productivity. Every aspect of the supply chain can be optimized with the visibility and real-time data that ERP systems provide.
Faster Sales Conversions
Without having to manually enter new leads from your CRM into the ERP system, your sales team will have information on new leads faster. Sales teams can act on customer needs more quickly, increasing customer satisfaction and the bottom line.
Some of the other reasons why ERP integration is good for business:
- Eliminate data silos
- Improve the employee and customer experience
- Better business decision-making
- Accelerated return on investment
Different Types of ERP Integration
You can integrate ERP software with almost every kind of business management software available. However, there are a few major applications that are most common for businesses to connect.
Project Management Integration
Integrating ERP systems with project management software is common, especially for large enterprise companies. This helps surface project details like what’s being worked on, who’s managing it, deadlines, etc. Some ERP software comes with pre-existing tools for project management, but using a stand-alone project management tool will give you more enhancements and customizations. This integration will provide better visibility into ongoing projects across the company. It also makes it easier for employees to complete and prioritize tasks.
A majority of customer data is collected on a company’s eCommerce site. That includes order history, transactions, shipping, customer information, etc. An eCommerce ERP integration allows all that data to be used across the company, from sales to customer support and marketing. By integrating the tools, you can have real-time online inventory information for your customers and even automatically replenish orders when stock gets low.
Business Intelligence Integration
Business intelligence software (also known as BI software) is vital in today’s data-driven world. It gives you the insights to make critical business decisions to help the company grow. Integrating ERP with business intelligence software guarantees that every team member has the information, trends, and insights to make intelligent, actionable decisions.
Electronic Data Interchange Integration
Electronic data interchange (EDI) is how businesses communicate information to each other electronically. This was information traditionally on paper, like purchase orders, invoices, etc. By integrating ERP software with EDI, you can get instant data transfer among business partners for all orders ensuring accuracy and communication.
Your CRM is the hub for everything related to customers, including orders, support tickets, communication, and more. But when there’s a breakdown between information from your CRM and ERP software, it can lead to a breakdown in customer support, sales, and the overall experience. A CRM ERP integration brings together two of your company’s most important data sources. This helps teams deliver better customer service and increase satisfaction. It can also optimize sales funnel conversions.
Human Capital Management Integration
Human capital management (HCM) software is used to manage your workforce, including payroll, benefits, performance, scheduling, and more. A CRM ERP integration can eliminate many manual processes for your human resources teams by automating processes, including reporting.
Methods of ERP Integration
Developing an ERP integration platform can be complicated. As you can see, many different tools and systems are available, and bringing them all together can be overwhelming. Here are a few methods of ERP integration to help you understand the landscape.
Point-to-Point (P2) Integration
This method of integration connects one piece of software to another. It’s probably the most simple and effective way to connect software, but it might not be the best strategy if you have a large enterprise with hundreds of point solutions.
Enterprise Service Bus (ESB)
The enterprise service bus is another solution. Enterprise service bus uses adapters between the ERP software and other tools to translate data to the format required. This is ideal for on-premises software but doesn’t scale well with SaaS solutions.
Integration Platform as a Service (iPaaS)
iPaaS is ideal for a cloud-based approach to an integration platform. iPaaS connects ERP systems to other SaaS solutions. It requires no coding, which means it’s flexible and cost-effective. This is a good strategy for modern businesses with no on-premises hardware.
Common ERP Integration Challenges
ERP integrations come with many benefits and can strengthen a company’s IT architecture, but there are some pitfalls to be aware of before getting started.
Because of the complexity of IT software, your teams will require more training which could cost more money.
Speaking of costs, there is more to consider than just additional training. There will be a heavy upfront cost, as well as a budget for routine maintenance and addressing technical issues that could come up down the road.
Integrations usually require a lot of customizations. Customizing the system allows you to meet specific business requirements, but it can also add another layer of complexity to the project.
Partner with Surety System for ERP integrations
When it comes to ERP integrations, there are many things to consider. What business management software should you integrate? What method is right for your business? How do you get started?
Planning, executing, and maintaining ERP integrations require time, resources, and technical expertise. That’s where Surety Systems can help.
How Can We Help?
Our team of senior-level consultants specializes in ERP systems, including Oracle JD Edwards, SAP, Infor, Workday, Microsoft Dynamics, and more. We can evaluate your current IT environment and help you build an ERP software integration strategy that’s efficient, scalable, and enables you to get the most out of your business data.
Contact us today to learn more about how integrated ERP solutions can improve business processes and support growth.