What is ERP integration, and why has it suddenly become one of the most talked-about topics in technology today, when as a matter of fact, it has been here for quite a while? Today, one cannot imagine a business without an ERP system. With the ever-increasing volume of data from a number of systems, data reconciliation makes tracking the status of the company tough. Too much time had to be invested by employees in data reconciliation.
Cloud ERPs have grown beyond their original roles as finance and core process management solutions. Other corporate software programs have progressed in the same way that ERPs have, with sophistication and numbers increasing on a regular basis.
Traditional application integration approaches are slow and require error-prone custom code. This offers a difficulty for businesses that look for protection and visibility, but do not want to lose their competitive advantage by becoming bogged down in time-consuming, manual operations.
That is why ERP integration has taken hold of modern businesses with their custom-built features. Let’s get an in-depth understanding of why ERP integration matters so much for businesses.
What is ERP Integration?
Among all the hype, you might be wondering what is ERP integration. ERP software is useful for gathering, storing, managing, and analyzing company data. It serves as a central hub, bringing together data from several departments and providing a single source of information that is updated in real-time.
According to Statista, sales in the ERP Software industry is expected to reach $53.15 billion by 2024. And it is predicted to increase at a 4.26% annual pace (CAGR 2024-2029), with a market volume of US $65.49 billion by 2029.
In a recent Deloitte survey of senior procurement professionals, nearly half of those polled identified “poor integration across applications” as one of the top three issues they were dealing with.
ERP and cloud-based app integration solutions address this issue in a powerful, unified manner by combining the operational capabilities of a smart ERP with integration software designed expressly to automate, expedite, and scale these critical tasks.
Examples of ERP Integration
What is an ERP integration operational area example? A few of the common examples are mentioned below:
CRM
CRM is a popular tool among sales and marketing teams since it provides information and history on individual leads. This enables them to personalize their contacts with clients, providing a better experience and increasing the likelihood of conversion.
CRM ERP connectors improve this process by delivering real-time market intelligence, demand metrics, and data analytics. Marketing messaging is more targeted and on point with more precise and relevant data, and sales teams can nurture prospects more effectively.
Business Intelligence
Business intelligence (BI) software aims to help people interpret data. It all starts with curating and gathering content from the best sources. BI tools then employ AI-powered technology to do specialized studies on the data, aiming to generate highly actionable insights.
BI solutions frequently result in deploying new processes or workflows and even new business opportunities. With cloud BI ERP integration, these insights can be centralized and disseminated more quickly, with those best positioned to take action.
Human Resources
What is ERP integration for human resource management? The difficulties of HR and human capital management (HCM) have rapidly increased. Aside from the almost immediate disruption that the pandemic caused to HR operations, these teams are under increased pressure to be data-driven profit centers.
With HCM ERP connectors, businesses may continue to benefit from a variety of purpose-built HR software and systems while also adding the capability of cloud ERP. ERP system integration informs and automates processes in this demanding and rapidly changing department from recruitment to retention to retirement.
Project Management
A project management ERP integration means that the best project management systems can be combined independently with a centralized ERP.
As a result, teams can continue to use tools they are comfortable with while maintaining a unified picture of all projects and teams, including standard reporting templates and information exchanges within one database.
eCommerce
eCommerce apps are often among the first to be integrated into any organization. However, today’s e-commerce is much more than just paying for products. Right now, the most competitive prospects require the capacity to exploit point-of-sale data.
Smart shelves and carts can instantaneously connect to warehouses and supply chains to streamline supply and demand. Marketing and sales teams can both benefit from real-time omnichannel purchasing data and reporting.
eCommerce ERP connectors can help connect your e-commerce applications and processes to a more sophisticated data environment.
Enterprise Asset Management
Businesses that operate machinery, heavy equipment, or fleets were among the first to recognize the full potential of EAM and IoT technologies. However, with ERP system integration, IoT data can perform much better.
EAM ERP connectors help combine the most intelligent supply chain and industrial technologies with the analytical capability of cloud ERP.
Customer Service
We hear about omnichannel purchasing and how modern consumers expect a smooth experience. Customer demands are currently high in both the B2C and B2B arenas.
AI-powered technology, such as natural language chatbots and recommendation engines, assists organizations in maintaining a personalized touch in their automated tasks. However, to provide truly exceptional customer service, different departments must be able to collaborate in real-time.
Whether it’s a service and repair request, a quality complaint, or a billing concern, customer service ERP connections can integrate many applications and centralize a source of customer data across operational areas.
The Benefits of ERP Integration
What are the benefits of an ERP integration? Let’s find out.
Data Accuracy & Consistency
ERP systems serve as central databases for important corporate information. When connected with other software, the likelihood of errors due to manual data entry is considerably reduced. Information is automatically exchanged between systems, assuring data accuracy and uniformity across the enterprise. This yields dependable and up-to-date data for better decision-making.
Efficiency
ERP integration removes the need for redundant data entry and manual data transmission between systems, saving time and lowering the likelihood of human error. When processes are automated, employees can focus on more important responsibilities, resulting in enhanced productivity and operational efficiency.
Streamlined Workflows
ERP integration helps to streamline corporate procedures. Integrating an ERP system with customer relationship management (CRM) software, for example, can boost sales and customer service by giving sales teams real-time access to client data, order history, and inventory information. This enables shorter response times and more tailored consumer engagements.
Inventory Management
Integrating your ERP system with inventory management software is crucial for stock and supply chain management companies. Real-time inventory data and automated order processing can help to reduce stockouts, overstocks, and associated carrying costs.
Cost Saving
ERP integration can result in significant cost reductions in various ways. Businesses can save money on labor by automating data entry and laborious operations. It can also assist in eliminating errors that result in costly mistakes, such as overordering or understocking goods.
Data Visibility
Integrating ERP software with other software programs can give you a 360-degree perspective of your business activities. This increased data accessibility enables management to make more informed decisions and find opportunities for improvement. Real-time data access is especially useful for executives, allowing them to monitor important performance indicators and respond rapidly to changing market conditions.
Better Reporting & Analytics
ERP systems create a large amount of data, which may be studied to acquire insights into corporate performance. Organizations can use integration with analytics and reporting technologies to produce bespoke reports and dashboards, which provide actionable information to help them make strategic decisions.
Scalability
As your company grows and evolves, software integration becomes increasingly important. ERP systems are adaptable to changing company requirements, and the flexibility to incorporate new applications as needed enables smooth scaling. This adaptability is critical for firms seeking to remain competitive in a dynamic economy.
Regulatory Compliance
Many sectors have severe regulations on data handling and reporting. ERP integration can ensure compliance with these standards by automating data gathering and reporting, lowering mistake rates, and keeping a thorough audit trail.
Customer Satisfaction
ERP integration can increase customer satisfaction. Businesses can improve client relationships and loyalty by optimizing procedures, providing real-time information, and offering tailored services.
Best Practices for ERP Integration
Pinpoint Business Applications
This includes determining which apps should gather and keep data from your ERP and which should transmit data to it.
Determine the Time of Process
Each potential integration could provide a different solution. When integrating your ERP and CRM, you will most likely want many of the data flows to be real-time (for example, placing a sales order in the ERP after creating it in the CRM). In contrast, other integrations can use data flows that are done in batches (e.g., producing new rows in Google Sheets for clients that are added to your ERP system).
Add Business Rules
Many data flows should be flexible, with actions made depending on the conditions. For example, when a client’s account is updated in your CRM, you should include logic that updates the customer’s account in your ERP if their profile already exists there; however, if the client’s profile does not already exist in your ERP for any reason, you should create the customer in the app before updating their profile.
Create A Plan
No integration is perfect. You must deal with API outages, system outages, data loss, and so forth. To properly address each of these potential difficulties, you’ll need to devise error-handling procedures that can be applied to the numerous integrations and data flows you create.
ERP Integration FAQs
Q1. What is ERP integration and its security considerations?
Data security is paramount when connecting your ERP to external applications. Here’s what to consider:
- API Security: Ensure your chosen integration method uses secure APIs (Application Programming Interfaces) with strong authentication and encryption protocols.
- Data Mapping and Access Control: Carefully map data flow between systems and implement granular access controls to restrict user permissions based on their roles.
- Regular Security Assessments: Schedule regular penetration testing and vulnerability assessments to identify and address potential security weaknesses in your integrated environment.
2. How can I ensure a smooth ERP integration with cloud-based applications?
Cloud-based ERP systems offer greater flexibility for integrations. Here are some key factors for a smooth process:
- Integration Platform as a Service (iPaaS): Many ERP vendors offer pre-built connectors or utilize iPaaS platforms to simplify integration with various cloud applications. Explore these options for faster and more reliable connections.
- Real-time vs. Batch Processing: Decide whether real-time data synchronization is crucial or if batch processing at specific intervals is sufficient. Real-time integrations require robust infrastructure and can be resource-intensive.
- API Version Compatibility: Cloud applications frequently update their APIs. Ensure your integration solution can handle version changes and adapt to future updates seamlessly.
3. How can I measure the success of my ERP integration?
The success of your ERP integration goes beyond technical functionality. Here’s how to assess its effectiveness:
- Improved Business Processes: Track improvements in key performance indicators (KPIs) like order processing times, inventory accuracy, and reporting efficiency.
- Reduced Manual Work: Measure the decrease in manual data entry and data transfer tasks after integration.
- User Satisfaction: Gather feedback from users across departments to gauge their satisfaction with the integrated system and its impact on their workflow.
The End
We hope by the end of this article, you have understood what is ERP integration. Your business procedures are not going to become less complex. Your clients’ expectations are not going to become easy. To get the most out of your enterprise software, consider partnering with Folio3 for ERP implementation, customization, and integration to grow and scale with business. A cloud ERP is the foundation of your company’s operations. When enterprise integration becomes a top priority, you should invest in a cloud-native iPaaS solution that provides the support and service you need and is designed expressly to integrate with your cloud ERP.
