While each organization and business case is unique, the most common reasons for ERP adoption are similar. According to the Software Path 2022 ERP Report, most enterprises are implementing ERP to support business growth, access more advanced functionality, and increase the overall effectiveness of enterprise resource planning.
An organization may reap even more benefits from its ERP project by making enterprise resource planning software an integral part of its digital infrastructure. In the article, we cover the main business advantages enterprises may gain through the integration of ERP systems. We also describe the main types and provide the most prominent approaches to ERP integration.
The Main Benefits of ERP Integration
As organizations grow, they may adopt more software to optimize customer relationship management, finance, and other business aspects. Although these digital systems help enterprises solve some specific pain points, they are not connected by default.
This may lead to noncompliance between enterprise departments, data duplications, and other issues reducing the overall business performance. And this is where ERP integration may come in handy. Utilizing an ERP as a centralized software platform, an enterprise may unify all its data sources and workflows and boost operating performance.
The four major benefits of ERP integration include:
- Enhanced employee performance
Employees often have to spend hours switching between different business systems to find specific data, which may negatively affect productivity. With ERP integration, this will no longer be the case. After all, any data may be easily accessed via one software instance, which may help employees focus more on strategic business tasks.
- More accurate and standardized data
Given that data from integrated systems automatically transfers to ERP, enterprises may eliminate manual data entry and mitigate the human factor, reducing the number of errors and duplicates. In addition, data centralization enables organizations to standardize documentation and reporting and adhere to compliance requirements.
- Improved workflow transparency
ERP integration helps visualize workflows and interconnections between them, allowing employees from different departments to see the bigger business picture. On the one hand, this advantage helps organizations ensure that standalone teams are moving in the same direction and that their work corresponds to the strategic business goals.
On the other hand, it enables enterprise managers to easily access all the information they need to eliminate inefficiencies and bottlenecks. Thus, they can optimize workflows, continuously improving overall business performance.
- Increased customer satisfaction
The accessibility of information, including customer data, allows employees to understand customer needs better, helping them provide more personalized service. In addition, ERP integration enables organizations to optimize their work processes to work faster and better, which enhances customer satisfaction.
After discussing the advantages of ERP integration, it is worth examining the most common integration options.
Types of ERP integrations
Enterprises may consider creating these and other ERP integrations depending on their business goals and requirements.
ERP & ecommerce
An enterprise may integrate its ERP with sales channels, be it a website or a mobile app, thereby linking back- and front-office. On the one hand, this will allow all customer purchases to be reflected in the ERP, helping update the inventory level automatically.
Vice versa, all online channels will have the actual inventory data. This will help an enterprise avoid situations when a customer orders a product that is out of stock, resulting in enhanced customer satisfaction.
ERP & CRM
Both ERP and CRM are indispensable tools for any growing enterprise – while CRM collects customers’ personal and contact information, ERP aggregates the financial data, inventory data, and shipping history. Integrating both business functions enables marketing and sales reps to access comprehensive customer data in seconds, resulting in better service and more closed deals.
ERP & eSourcing
If an enterprise has an eSourcing solution, it may be integrated with an ERP for optimizing the sourcing and procurement processes. If an item runs short, ERP may timely notify the eSourcing system – the latter may automatically generate a request for quotation (RFQ) and send it to suppliers.
ERP & business intelligence (BI)
ERP systems collect and process vast amounts of data that may help employees make more intelligent and future-proof business decisions. By integrating BI with ERP, the organization allows employees to generate insights and make accurate predictions.
The main approaches to ERP integration
There are three main approaches to ERP integration. Each has its specifics, advantages, and drawbacks. To define the most relevant approach and thus maximize integration efficiency, we would recommend consulting with ERP experts before starting a project.
Typically, point-to-point integration involves connecting one system to another directly, either using custom code or API connectors. Although this may be the most straightforward approach, it may not be effective for large enterprises since such integrations are very difficult to scale.
Enterprise service bus (ESB)
With this approach, developers deploy a middleware layer and build adapters that connect different systems. Enterprise service bus integration can be especially beneficial for organizations with a mix of on-premise and cloud infrastructure.
Integration platform-as-a-service (IPaaS)
Developers use a dedicated digital platform (IPaaS) to link cloud-based applications. This approach is best for enterprises that aim to integrate multiple SaaS applications without spending resources on coding and maintaining physical servers.
Today, building a successful and growing business is almost impossible without an ERP system. After all, ERP brings together such disparate processes as finance, human resources, sourcing, and many more, enabling improved business performance and advanced customer service.
However, an enterprise may get even more business value by making ERP an internal part of its digital infrastructure. In particular, an organization may entrust developers to build point-to-point integration or utilize ESB and IPaaS to integrate ERP with its website and mobile app or such business systems as CRM, eSourcing, and BI.