Enterprise Resource Planning, abbreviate as ERP, is a software tool using small and large companies for their overall business management.
Installing ERP software helps automate and streamline everyday operations to enhance work efficiency and reduce business costs. ERP also takes care of all business data and makes real-time data available for efficient business reporting.
ERP tools are designed to assist in managing customer data, business finances, inventory and orders, distribution logistics, retail delivery, and many other vital business operations.
An ERP system is a set of integrated applications that collect, store, and interpret data from various business activities. An ERP system will help your company run more efficiently. By streamlining the flow of information across all departments in your business.
Initially, ERP was introduced as a software tool to automate back-end functions. However, with time, ERP systems are also being used to manage front-end business tasks like marketing automation, eCommerce customers, and online sales.
This expanding scope of ERP software increased the need for ERP system integration. This hugely benefits all business owners, especially manufacturers, distributors, and retailers.
ERP system integration means connecting and synchronizing your ERP tool to other business applications. Such as eCommerce tools, CRM (Customer Relationship Management) systems, marketing and analytics software, EDI (Electronic Data Interchange) tools, etc.
In general, ERP software integration ensures that your ERP tool can communicate. It shares data with all other business platforms and tools. This helps your business function without any ambiguity and grow manifold.
ERP is a complete system in itself. But with modern-day advancements and due to the online (using the internet) approach to conducting business activities. Such as marketing, customer acquisition, sales, and others, it has become non-negotiable for you to implement an ERP integration strategy for your business.
In the scenario of a lack of an integrated ERP system, there are a few challenges that your organization can begin to face. Let’s have a look at them here :
If you feel that your business is currently facing one or more of these problems that we’ve discussed, it’s best to consider ERP system integration for your business.
An ERP system integration all the resources and functions of an organization. It connects IT, sales, marketing, accounting, human resources, and other departments to share information from one integrated database. Departments and employees can access this information through a web browser or an app on their mobile phones. Doing so helps improve communication between employees. It ensures that everyone can access the most up-to-date information about your products and services.
With an integration ERP system, you have better control over your inventory management. Because you know what materials and items are available for production or sale at any given time without manually checking stock levels in each department or store location. You can also track sales more accurately, knowing exactly where your profits are going. Which helps avoid potential losses due to theft or poor inventory management practices like overstocking certain items while understocking others.
ERP vendors have developed a wide array of integration tools for their customers, but many enterprises don’t use them. Many companies don’t know how to use these tools properly. Businesses often lack knowledge about this subject, so they decide not to go through the integration process. A study shows that 45% of ERP software integration rely on manual data entry or spreadsheets. Suppose you want to avoid these challenges and successfully implement an ERP system software and get the most out of it. In that case, you need to know about the different types of ERP integration strategy available for businesses today. So, let’s take a look at some of the options you have:
An ERP implementation is a complex process that involves many moving parts. The integration can process tied closely to the overall ERP implementation plan and its associated timeline. Testing of these integrations must also complete before going live. So it’s essential to allow enough time for them to be successful.
To help ensure that your integration strategy goes smoothly. You first need to understand the different types of ERP integration strategy and how they affect your project. ERP system integration can categorize into two major types, namely:
This type of integration involves extending the functionalities of an ERP financial management system to integrate it with other systems within the same organization. For example, a manufacturing enterprise uses an integration ERP system for management. Its core manufacturing processes and wants to integrate it with the billing and accounting system into a single, consolidated system. In general, connecting disparate systems across departments makes for a seamless flow of information.
This integration involves integration ERP system with third-party systems that extend its functionalities. For example, a company may need to integrate. Its CRM (Customer Relationship Management) software with its ERP system to better access customer data.
It can be more complex than horizontal integrations because it depends on two different software types working together in harmony.
Integrating CRM and ERP is vital for a business to grow and achieve sales success. In addition, CRM can provide valuable, accurate customer data to streamline and enhance your business development process. As a result, by understanding customers’ requirements, a company will offer products and services that are customized as per the customers’ requirements.
For example, if a sales executive sells a custom product. We need information about pricing, lead time, stock levels, and availability. It ensures that the customer is creditworthy. This information comes from the ERP system integration, which eventually improves customer satisfaction and reduces churn rates.
The amalgamation of the human resources function is a critical aspect of ERP. The integrated HR management software for small business can help the company develop a talent pool and workforce planning, help recruit appropriate employees, streamline the performance management process, and provide self-service tools for employees. In addition, it allows you to keep track of your employees and their timesheets in one place. A human resource ERP system allows easy payroll processing for employee records and benefits. Finally, if a company has multiple locations, integrating an HR performance management system into an ERP system can help streamline and standardize the whole process from start to finish.
Inventory tracking integration with ERP allows companies to keep track of their inventory levels. ITS are designed to minimize the amount of inventory on hand without hurting sales. This type of ERP integration strategy is critical for companies that have high-volume inventory needs.
Sales tracking integration allows companies to track customer data and sales performance metrics. For example, a company can keep track of its best customers by dollar amount spent or number of products purchased. This type of ERP integration strategy is critical to know where a company is making money and identifying areas for improvement.
Point-to-point integration:
It is the traditional method of ERP integration strategy. In this method, each ERP module directly connects to the business applications it needs. An ERP integration hub is a middleware layer that connects the ERP system with other systems in the organization. This architecture allows the ERP system to communicate with multiple systems through a single integration point. The hub manages the flow of information between each system, eliminating the need for communication between individual systems. For example, the CRM module in an ERP system may integrate with a marketing automation tool using point-to-point integration.
Hub-and-spoke integration:
It is an alternative to point-to-point, where all your different business applications connect to a central application, which communicates with the other apps. The central app is a hub for all the data from your different business apps, including your ERP Software For Manufacturing Industry.
Connector Integration:
Such integration service is provided by the ERP vendor, which helps the business connect a module in the ERP system to another system. The connector is pre-built based on the specifications set by the user. The business can choose from a list of systems they want to integrate with. And then, they can specify what needs to integrate and how it needs to do.
API Integration:
On the other hand, API integration requires more time and effort when compared to connector integrations. In addition, a developer might be required for API integration since a custom API needs to be built for integration. This type of integration can prefer when there is no out-of-the-box solution available for the required integration. Some specific requirements that need to be met.
Business Intelligence(BI)/Enterprise Service Bus(ESB):
Business Intelligence based on an enterprise service bus provides an abstraction layer for the exchange of data between applications and can support more advanced use cases more quickly than other integrations.
By now, we are sure you understand the need to have an ERP integration strategy. Now, let’s understand the advantages of implementing ERP software for your business :
Fully Automated Business Processes – Once your ERP software is connected to other business tools, you’ll no longer have to enter data from one application to the other manually. This leads to full automation and helps you save a lot of your productive time.
Ease And Accuracy of Operations – As data is automatically exchanged between business applications, there is reduced human error and ambiguity, which leads to increased accuracy. This also simplifies business operations and makes it extremely easy to execute complicated processes.
Unmatched Operational Efficiency – Since the major time-consuming tasks are automated, your business saves immensely on human workload. Reduced manual effort for admin tasks ensures that your teams can focus better on other useful operations such as market penetration, business expansion, new feature implementation, process optimization, and others.
Single Source of Truth – When real-time business data is available to all departments, no team has to wait for other teams to conduct their operations. For instance, the finance team can make account statements without waiting for income or revenue details from the marketing and sales teams. This is how the ERP system becomes the single source of truth.
Increase in Sales Conversions – This is undoubtedly the most significant advantage of ERP system. ERP integration strategy ensures data flows seamlessly, and this helps convert website visitors to leads, leads to customers, and customers to repeat customers in less time than ever before!
ERP integration offers significant advantages for your business, including a centralized data repository, lower operating costs, and higher customer satisfaction. Some other key benefits include:
Users don’t have to wait for or switch between different applications to access data. Which helps improve data quality and employee productivity.
Greater sales effectiveness
After reading all about the numerous benefits of ERP system integration, if you are excited and considering ERP software integration for your business too, the first step would be to decide upon the types of ERP integration strategy that is the best fit for your business.
We’ll discuss in detail about them here :
eCommerce ERP Integration – As an increasing number of customers are acquired online, your eCommerce store is the hub of all crucial customer data. With eCommerce ERP system integration, you can share all data, such as leads, customers, orders, transactions, and shipping statistics, with all other departments in real-time.
The most common eCommerce tools for ERP software integration are – Magento, Shopify, and SAS Hybris. After ERP system integration, the inventory is automatically updated at the front end and back end. In addition, businesses can also implement real-time dynamic pricing that is customer-specific and time-bound.
CRM ERP Integration – CRM for any business is the central place for all customer data such as orders, transactions, communication, etc. As customer service and satisfaction form the backbone of the success of your business, CRM and ERP systems integration is no more a choice.
After the implementation of CRM and ERP software integration, different teams can work towards fulfilling customer requests and offer quick and effective solutions to their queries. This also further helps optimize sales funnels and grow your business.
Project Management ERP Integration – Project management tools help understand the status of different projects, their timelines, pending tasks and deadlines, along with the team members working on the projects.
Integrating ERP with your project management tool helps your business to work more effectively where all managers can look at the ongoing tasks, schedule the next list of operations, and also change priorities for tasks or assign new members to them.
Business Intelligence ERP Integration – Business intelligence software has the power to drive your business to the next level, and integrating it with your ERP tool can turn it into a growth machine!
Implementing an ERP integration strategy for business intelligence tools can be revolutionary for your business. You’ll be able to have access to accurate forecasting that will help in enhanced decision-making. This will also empower your employees with data and insights, which is magical for your business growth.
EDI ERP Integration – Electronic Data Interchange is a platform that helps with electronic data transfer across the organization. Data such as purchase orders for raw materials, customer details for order and shipment, and inventory levels can be shared between partners, vendors, clients, suppliers, and distributors.
As soon as your business implements EDI and ERP software integration, you can rest assured about the accuracy of data being communicated immediately between trade partners of your business. This also helps improve the supply chain and logistics for your company.
As ERP software integration involves connecting your ERP software to different business applications, it can be a challenging process. Even if you carefully design an ERP integration strategy, there can be some pre-integration and post-integration challenges that you encounter.
Let’s have a look at a few of those :
Integration means making two or more systems work together without glitches. For this to be possible, you need APIs (Application Programming Interfaces) to ensure these multiple business processes can communicate with each other and exchange data seamlessly.
There is a new cloud-based approach to integration that is getting widely popular. It is called iPaaS (Integration Platform As A Service). This allows all applications to sync faster. There is no requirement to write any code, and you can connect ERP systems to your SaaS products.
The iPaaS code is available for some of the most widely used business processes and SaaS tools. However, these might sometimes require some tweaks from the developer.
Here are a few things that we can do to minimize the chances of facing challenges during ERP system integration :
Create an ERP software integration plan with your team. Ensure the plan aligns with your business goals, and remember to follow the plan religiously.
Reduce all roadblocks by informing all your vendors, partners, and team members about the upcoming change due to ERP software integration.
Ensure good data management by cleaning data, normalizing formats, deleting redundant data, and reviewing who has access to what data.
If you are keen on implementing ERP system integration with your eCommerce store to provide more value to your customers and grow sales, you must consider Shopify.
It is not only the market leader for eCommerce stores but has also partnered with the world’s leading ERP tools, namely Microsoft, Oracle, and Netsuite. All these ERP tools follow the guidelines of certification programs and work directly with the developer success team at Shopify.
They are highly recommended as they leave no stone unturned to offer a memorable merchant experience.
The right ERP system can make the difference between a company that succeeds and fails. As a result, ERP software integration has become essential for businesses looking to streamline internal processes, increase productivity and reduce costs. The primary purpose of ERP integration is to ensure that all the processes are operating effectively within their respective units. An ERP system integration has been performed. Many of the world’s successful companies, and this trend is not going away. As a result, There can expect to grow in popularity in the coming years.
