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2019-08-08

5 Frequently Asked Questions about ERP Integration

Enterprise Resource Planning (ERP) system integration is often a hot topic of discussion at growing organizations. It’s obvious that a close knit, integrated ERP system has a plethora of benefits, such as streamlined processes, increased operational efficiency, and improved customer success score, but integrating all aspects of an ERP system across the enterprise has its own set of challenges and doubts.

With our experience in integrating ERP systems for various organizations, we have uncovered and answered top 5 FAQs about integrating ERP systems.

1. What Different ERP Modules Form an Integrated ERP System?

ERP consists of a multitude of modules that help in maintaining the smooth flow of information tailored to both department-level and enterprise-level. Companies can either individually purchase these modules or lay their hands on tailored packages. Here are some common ERP modules:

  • Inventory Management
  • Customer Relationship Management (CRM)
  • Accounting and Financial Management
  • Human Resource and Payroll Management

2. Why Enterprises Need ERP System Integration?

ERP integration optimizes business process management. It is a system of interconnected business applications that manages enterprises and automates various back-end functions, like human resources, production, shipping, financial accounting, etc. with ERP modules. Essentially, ERP integration helps enterprises automate business processes, thereby increasing business efficiency and offering better visibility.

Apart from streamlining business processes, these strategic solutions help reduce overhead costs, accelerate revenue, and promote healthier risk management. For example, a CRM strengthens customer relations and satisfaction, and ultimately revenue by offering a detailed look at customer relationships to foster efficient communication.

3. What are Common ERP Integration Challenges?

ERP integration can offer several pitfalls when not approached correctly.

Complexity

Integrated ERP system is highly complex and requires specialized expertise to manage and operate. If existing integrations are tightly coupled, the complexity increases further and becomes difficult to handle and modify.

Cost

ERP integrations are costly upfront. This is because ERP integration is complex and calls for constant maintenance.

Customization

A lot of enterprises resort to customization, whether a custom interface or middleware, to expand. Customizing systems allow them to meet their department’s needs, but add a layer of complexity and risk.

Training

Due to increased complexity, companies need to train their teams to gain familiarity with tedious integrations. Training again adds to the overhead cost.

4. What are the Common Approaches to ERP System Integration?

ERP integration can be implemented in several ways and each approach has its strengths and weaknesses.

Point-to-Point

The first approach toERP system integration, point-to-point is a quick fix for companies. While the initial hurdles of this approach are low, it is unable to realize long-term complications. This integration approach creates a tightly coupled architecture that can quickly become brittle and unmanageable with the growth of the enterprise. Enterprise’s ability to meet current and changing business demands diminishes rapidly. Over time, point to point turns more complex and forms tightly coupled dependencies that can burden the organization.

Customized Adapters/Applications

Enterprises can build their own custom ERP integration applications too. However, as the organizational requirements escalate, this approach incurs huge maintenance cost with enormous complexity.

Enterprise Service Bus (ESB)

A modern approach to ERP system integration, ESB integrates applications by acting as an abstraction layer and as such diminishes dependences by separating the ERP system from other applications. This approach to ERP integration can support myriad data formats in real-time.

Ecosystem Integration

This approach allows companies to integrate ERP systems with data sources as well as applications. With features like transport protocols, application connectors, monitoring dashboards, data translation & mapping units, and more, ecosystem integration platforms securely enable companies to self-serve, onboard, and manage ERP integration, resulting in delighted customers and faster revenue.

5. Why Modernized Enterprises Choose to Integrate their ERP System?

Majority of companies are opting for ERP system integration technology owing to various reasons such as:

Centralized Data

With data available in one accessible location, companies can improve internal workflows. For instance, the accounting team of a company need not collaborate with sales every month for preparing a record of revenue. Centralized access facilitates processes and alleviates employee waiting time, making organizations easier to do business with.

Workflow Visualization

ERP integration provides higher visualization of workflows and business tasks. Therefore, employees can have access to information, such as what their peers are working on, without difficulty. This can be beneficial when assigning prioritized tasks or requesting feedback from fellow employees.

Automated Processes

ERP integration automates processes across various departments and workflows. With the introduction of automation, the need for manual input ceases. Reduced manual input corresponds to a reduced number of errors, thus increasing company’s operational efficiency and productivity.

Faster Onboarding

Slow onboarding impacts a business in terms of the relationship it shares with the customers and partners. ERP integrations allow enterprises to form better relationships by onboarding their customers/partners up to 80% faster, boosting sales and revenue.

Enterprises that fail to embrace the wave of digital transformation tends to die or stagnate over time. ERP system integration allows companies to drive the change by delighting their customers through improved processes and faster onboarding, thereby helping them gain a competitive edge.