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What Is an ERP Integration? An Introductory Guide

What Is an ERP Integration? An Introductory Guide

Without an air traffic control tower, pilots wouldn’t know when to safely take off or land their planes. In the same way, an enterprise resource planning system (ERP) acts as the hub for other software systems and applications. ERP integration creates a single source of truth. This process, in turn, allows many business applications to work in harmony. 

An integrated enterprise works like an efficient runway. Information flows smoothly across departments without bottlenecks. It eliminates manual tasks and reduces errors. The benefits of ERP integration include accurate data, fast processes, and data-driven decision-making. In other words, with integration, your ERP becomes a source of insight instead of frustration.

Brushing up on ERP integrations is a quick way to better your business processes.

What is an ERP Integration?

Simply put, ERP integration means connecting your ERP with other business applications. If you’re not integrating your ERP, why use it in the first place?

This is your central hub for various business functions. For example, integration might bring together finance, human resources, inventory, and sales information. A linked ecosystem is almost always more efficient than disparate systems.

Connect Your Enterprise Apps

Integrated enterprise applications yield more accurate and actionable data. Depending on the kind of visibility you want, the following options are at your disposal.

Data Synchronization

Data synchronization between the ERP system and other applications must occur in real-time or on a scheduled basis. This ensures that all systems have consistent and up-to-date data.

API Integration

APIs are tools that help different software systems communicate with each other. They do this by establishing rules and protocols for exchanging data. With seamless integration between the ERP and other applications, APIs make it easier for these systems to work together.

Middleware

Middleware is software that acts as a bridge between different applications. The software facilitates data exchange and communication. By translating and transmitting data, middleware enables the ERP system to interact with other systems.

Benefits of an ERP

There are several benefits to ERP integration. First, it streamlines processes. ERP integration eliminates manual data entry and reduces duplicate efforts. This automation leads to improved efficiency and reduced errors.

Second, integration enhances data accuracy. The process allows information to be entered and updated in one system and automatically shared with others. As a result, data throughout the organization becomes more consistent and reliable.

Moreover, ERP integration enables better decision-making. With real-time access to data, users gain a holistic view of business operations. As a result, they also enjoy quick and efficient insights. 

Integration also eliminates time-consuming manual tasks and reduces administrative overhead.  Streamlining business processes in this way saves both time and money. Plus, it provides scalability and flexibility. Organizations can add or replace software applications as needed without disruption.

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Types of ERP Integrations

There are several different kinds of ERP system integrations. Each serves its own unique purpose or departmental need. Some of the most common types of ERP system integrations include:

  1. CRM

By optimizing communication, CRM tools can improve a business’s customer service and satisfaction. CRM systems provide valuable consumer insights that give organizations a competitive advantage. With CRM data insights, management can more easily personalize the customer experience. As a result, user satisfaction rates often increase. 

ERP integrations can further enhance a CRM platform. The process can connect user demand metrics to marketing and sales functions. This enables easy access to valuable data insights, like conversion rates and lead times.  

  1. Human Resources

When it comes to software, human resources (HR) is one of the most demanding departments. HR must have a smooth workflow to handle data-hungry processes. These might include employee management, talent recruitment, onboarding, training, payroll, and documentation. Additionally, information must be easy to share and transfer for any HR integration.

  1. Business Intelligence

Business Intelligence (BI) software refers to tools that collect data and provide analysis. Most BI software offers actionable information. When leveraged, this data can improve business systems and processes. Integrating BI software into an ERP system can generate infinitely more valuable insights. As a result, integration allows new opportunities to develop.

  1. eCommerce

In the realm of inventory management, it’s vital to steer clear of stockouts and backorders. These can lead to extra inventory expenses, like the cost of expedited shipping. To that end, E-commerce integrations keep a robust inventory management system afloat. Used properly, they prevent stockouts and backorders. In this way, potential sales are not lost due to inventory maintenance issues.

  1. Project Management

ERP platforms accommodate integration from various systems for specific projects. This allows companies to handle financial and production projects in a single database. ERP integration simplifies progress tracking, ensuring timely completion. This feature can also help businesses save time, effort, and money.

How to Integrate an ERP with Your Existing Software

Many ERPs come with stock integrations. Businesses with complex or unique data often push the limits of those integrations. So, specialized workflows or functionality almost always require custom ERP development. 

Before an ERP integration, most businesses combine legacy and software-as-a-service (SaaS) systems. Disparate systems often result when departments choose their own applications.

This approach can optimize the flow of information in the short term. In the long term, however, it can prove problematic. As a business scales, it may suddenly need the option to integrate with an ERP. Adopting an entirely new system may prove costly and time-consuming. Plus, it may be met by an unappreciative workforce. Choosing the right method for ERP integration minimizes the bumps in the road.  

Methods for ERP Integration

Businesses may choose one of several different strategies when adopting an ERP. These ERP integration strategies include:

Point-to-Point Integrations

Point-to-point integrations are used to align two specific pieces of software together. While this method may be the easiest option, it’s often insufficient for modern organizations. Most businesses need several types of software connections for dozens of software programs. As the number of software platforms increases, the number of connections needed also increases. This creates a mess for IT employees to maintain. So, this solution is sometimes impractical for large organizations with many systems.

Enterprise Service Bus (ESB)

An alternative option is the Enterprise Service Bus (ESB). This is a software architecture installed on-premises. It allows several applications to exchange data and communicate with each other. The data is transmitted in a specific format, usually XML. Adapters then act as a bridge between the bus and other software (like the ERP). They translate data to and from XML or other languages.

ESBs, while a great choice for vertically scaling companies, do not do well for businesses that intend to scale horizontally. For this reason, they’re an unsuitable choice for companies looking for third-party or SaaS integration solutions. On the whole, ESBs aren’t ideal for businesses looking to simplify their data flow. They often add an extra layer of complexity to a system.

Integration Platform as a Service (iPaaS)

Compared to ESBs, cloud-based integration is easier and faster with iPaaS platforms. These platforms provide many advantages. They connect ERP systems to SaaS products and are flexible and cost-effective. Plus, they need little to no coding knowledge. iPaaS are also ideal for modern businesses. They don’t require any onsite hardware. In general, iPaaS is an excellent solution for companies seeking a first-time ERP integration solution.

Preparing Your Business for an ERP Integration

Integrating an ERP system with existing software requires careful planning and implementation. Here are some general steps to guide the integration process:

  1. Assess Your Integration Requirements

First, identify the specific software systems to be integrated with the ERP system. Also determine the scope, data flow, and desired outcomes of the integration.

  1. Choose an Integration Approach

Next, select the most suitable integration approach based on the systems involved. Some options include iPaaS, ESB, point-to-point, or custom development.

  1. Check Compatibility

A skilled software design team can verify the compatibility of your chosen ERP system and your existing software system. Data formats, protocols, security requirements, and system capabilities are all relevant to compatibility. Your team can also help you determine if any modifications or updates are needed to ensure optimal integration.

  1. Plan Your Data Mapping

Next, the design team will help you define how data will be mapped and transferred between systems. They will help identify the necessary data fields and transformations. They’ll also take care of any data validation or cleansing processes required for accurate integration.

  1. Develop an Integration Solution and Test

Depending on the chosen approach, the team will then develop an integration solution. This plan will involve APIs, middleware platforms, custom code, or integration tools. The team will also test the integration solution to ensure proper data flow, functionality, and error handling. In addition, they’ll validate the accuracy and consistency of data transferred between systems.

  1. Provide Training and Support

Finally, the design team will train relevant staff members on using the integrated system. The team may also provide ongoing support to address any questions or challenges staff members encounter. Support will include regular maintenance and updates to ensure optimal performance.

Learn more: What is a Dedicated Development Team, and When Should You Hire One?

ERP Integration Examples

There are several ERP integration software tools available in the market. Each can facilitate the integration of ERP systems with other software applications. Here are some examples:

Oracle Integration Cloud

Oracle Integration Cloud provides a comprehensive set of integration tools and services. These allow for ERP integrations with other applications. Connect with databases and services whether they’re on-premises or in the cloud.

MuleSoft Anypoint Platform 

MuleSoft provides a comprehensive integration platform. Its Anypoint platform integrates ERP systems with a wide range of applications, systems, and data sources. The system uses APIs, connectors, and data transformation tools.

IBM Integration Bus 

IBM Integration Bus, formerly known as IBM WebSphere Message Broker, supports ERP integration. It connects to diverse applications and technologies through various protocols and data formats.

Shopify + NetSuite

Shopify’s eCommerce platform integrates with NetSuite’s robust ERP system. This pair allows businesses to synchronize order data, inventory, and customer information.

WooCommerce + Microsoft Dynamics 365

WooCommerce is a popular WordPress plugin for eCommerce. Integrated with Microsoft Dynamics 365 ERP, it empowers businesses. The pair streamlines sales, inventory management, and customer data.

Workday + Oracle HCM

Workday, a popular cloud-based HR system, integrates with Oracle HCM (Human Capital Management). This ERP integration permits businesses to streamline HR processes. These include employee data management, payroll, benefits, and talent management.

Salesforce + SAP ERP

Salesforce, a leading CRM platform, integrates with SAP ERP. The duo provides businesses with a seamless flow of customer data, order management, and sales information.

Asana + NetSuite ERP

Asana, a project management platform, integrates seamlessly with NetSuite ERP. This combination enables project task alignment, tracking project progress, and managing resource allocation. The integration streamlines project execution, improving collaboration between project teams and finance departments.

Domo + Infor ERP

Domo, a cloud-based BI platform, integrates with Infor ERP systems. Together, the two systems allow organizations to connect, transform, and visualize ERP data. This powerful integration powers better decision-making. Users can create real-time dashboards, collaborate on insights, and gain a comprehensive view of their Infor ERP data.

Final Thoughts

ERP integration connects different software systems within an organization. By facilitating seamless data flow, it improves business operations. It eliminates manual tasks, reduces errors, and provides real-time insights. All this leads to better decision-making and increased efficiency.

While there are various methods of ERP integration, each strategy has its own advantages and considerations. The right choice depends on the organization’s needs and existing software infrastructure.

In summary, ERP integration is a strategic investment. The process brings cohesion to a company’s software ecosystem. It improves operational efficiency and empowers businesses to make data-driven decisions. Ultimately, ERP integration can sustain business growth and success.

Designli offers free consultations to businesses interested in ERP integration. If you want to discuss the next steps for an enterprise app, choose a time to chat.

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