ERP INTEGRATION: HOW CAN ORGANIZATIONS BENEFIT FROM ERP INTEGRATION?
As technology is rapidly growing, so are business practices and the relationships between organizations and their stakeholders. This is where ERP Integration comes into play. The current economic and cultural environment requires organizations to not only deliver high quality services and products but also exceptional client experience. In fact, according to an August 2020 study (Customer Experience, Trends, Challenges & Innovations), 59% of consumers reported that they now prioritize customer service more when choosing a brand for their needs. Enterprise Resource Planning (ERP) systems are key tools in achieving success in delivering exceptional client experiences.
What is ERP?
Enterprise Resource Planning (ERP) Systems
ERP refers to the systems and software that connect an organization’s essential business functions such as finance, accounting, manufacturing, supply chain, sales, procurement, marketing, and more to offer data from a single integrated source, and the business operations as a whole. While traditionally ERP systems are often used synonymously with financial systems and were developed to integrate standard back-office procedures, organizations need a more modern approach to ERP integration. These systems must now also connect with Customer Relationship Management (CRM), e-commerce, customer service, and other customer-facing systems to ensure they meet the demands of the economy while providing quality client satisfaction.
Integrating softwares and measuring tools used by different departments across an organization can be challenging since all these programs rely on their own unique set of rules and systems to provide data. The function of ERP integration softwares is to connect to these systems and applications, and to synchronize the corresponding data for a unified view of operations from a single, cohesive source.
3 ERP Integration Methods
1. Integration platform as a service (iPaaS): iPaaS is the most modern way of ERP integration which syncs apps using a cloud based enterprise service bus (ESB). Using this method is inexpensive, could be tailored to suit an organization’s needs, requires almost no coding and does not need any on-premise hardware.
2. Enterprise service bus (ESB): ESB is a software architecture that uses connectors and adapters (such as applications) to share data across a network. This method of integration is an older, on-premises solution and does not scale well horizontally for organizations that use SaaS solutions and third parties.
3. Point-to-point (point integration): Point-to-point integration is the simplest form of ERP integration. This refers to when two softwares are connected to each other using each other’s data. While this is a quick and effective method for connecting two softwares, it is not efficient for modern day use as most organizations rely on hundreds of pieces of softwares, and connecting them using this type of integration would become a wasteful burden on the IT department.
5 Types of ERP Integrations
There are a few options to consider when choosing an ERP integration software to improve business processes. Organizations should consider their IT resources and unique business needs when making a decision.
1. Business Intelligence
These types of softwares are designed to collect, analyze and report data through visualization and dashboards. Business intelligence (BI) softwares are especially important for organizations that are in the process of digital transformation and offer organization wide data to all employees and other stakeholders who might be looking to increase their bottom lines. While in some cases the business intelligence function might be a part of the main ERP system, often the functionality is not practical enough to process the amount of daily data that is produced by most organizations.
A few examples of high demand BI softwares are Microsoft Power BI, Tableau, Oracle Analytics Cloud, MicroStrategy, and TIBCO Spotfire, and Workday Adaptive Planning. Microsoft and Oracle offer ERP systems. Workday provides enterprise, human resources workforce planning, financial planning, and revenue forecasting.
2. Project Management
Similar to business intelligence (BI) softwares, select ERP softwares offer project management solutions. These softwares offer project planning, specific tasks and timelines, project status, budget, resources, documentation, shared files, and communications tools. This helps increase project management efficiency throughout an organization. When a project management module is created, it offers project specific information (team members, project synopsis, timeline, etc.). This can be viewed by anyone in the organization, which encourages accountability and efficiency across an organization.
A few examples are:
JIRA from Atlassian
3. Customer Relationship Management (CRM)
Organizations need processes to acquire and manage leads and customers. Customer Relationship Management (CRM) systems standardizes this process by storing valuable data such as contact information, account details, sales opportunities, purchase history data, etc. Organizations, mainly sales and marketing teams, use this information to get a better understanding of their customers for future interactions and sales opportunities.
A few examples of CRM softwares are Salesforce, SAP, Oracle, Adobe, and Microsoft.
4. eCommerce Platforms
eCommerce platform integration (connecting an organization’s eCommerce system with a cloud-based ERP solution) is key for organizations that primarily focus on online sales. The combined systems offer valuable data such as leads, customer contacts, orders, shipping times, taxes, customer support, website traffic, and much more for organizations to create a better online experience for clients and also to generate more leads and revenue.
Magento, Shopify, and WooCommerce are a few eCommerce vendors to mention.
5. Human Resources
Between payroll, recruitment, evaluations, job offers and overall employee relations efforts, human resources (HR) departments handle many back-end tasks that provide an overwhelming amount of data, and its mismanagement could be costly and dangerous for security breach purposes. There are many benefits to integrating HR softwares with ERP such as secure storage of employee information, simplified payroll, improved communications with employees, more efficient onboarding, and many more.
Benefits & Challenges
Of course like all business decisions, ERP integration comes with challenges and risks. Choosing the wrong program, integration costs, lack of resources and guides, and software security risks. However, when done right, benefits of it are guaranteed to surpass these challenges.
Integrating ERP solutions is the best approach to attaining a big picture view of operations across an organization. By compiling data from and creating an overview, it establishes an up-to-date interface all members of an organization can use to access accurate information through a single platform.
Other benefits to ERP integration include:
- Operational accuracy
- Automated processes
- Increased efficiency
- Optimized workflow
- Increased bottom line
Precision Technology can help build and implement your team to drive the ERP implementation process into action for you company.