ERP System Integration: Everything You Need to Know

Data management, security, and storage are crucial for a business to prioritize in this twenty-first century. But, this is a time-consuming and expensive process to get through. Traditional methods were majorly inefficient due to isolated, manual processes, physical media for storage, and weak security measures. As a result, data was managed in silos with minimum to no automation and centralized control. 

Considering the needs and inefficiency of traditional methods, a wide array of applications and tools were developed. Among them, ERPs emerged as applications that are handy in overcoming conventional barriers by streamlining business processes. Its market is expected to grow to around $101bn by 2026, showcasing the increasing demand for ERP system integration globally. 

Enterprise Resource Planning (ERP) software can centralize data with adequate security measures. The process has been smooth and improves the efficiency of an organization. However, this all depends on the skills of a custom ERP development company. The right team will put in all the toil to ensure that a solution matches the expected needs of a business. 

What is ERP System Integration?

First, let’s understand what Enterprise Resource Planning is. ERP centralizes and coordinates the business’s resources more efficiently. Its integration is a method of connecting existing solutions, including databases, eCommerce applications, or platforms, within an organization to ensure flawless data flow and smooth operation. 

The goal is to unify all business processes and allow them to communicate with each other in real time. Hence, ERP integration minimizes data silos and improves decision-making of a business. 

In the above diagram, the workings of the ERP solution are underlined, as its centralized role.  

Suppose a company uses an eCommerce platform for online sales, an online marketplace for marketplace sales, a software app, and other applications to manage another brand. Every platform generates valuable sales, customer information, and inventory data. To gain a detailed view, the company has taken a step towards ERP system integration, and this is how it helped:

• Data from various software applications is sent to the integration cloud.
• The integration cloud uses API to connect and receive the information. 
• Data is transformed within it to ensure consistency and compatibility.
• The transformed data is then sent to the ERP solution for a complete picture of all the data throughout all the platforms. 
• Resultantly, the ERP integration improves decision-making through the consolidated and consistent view of data. 

Examples of Enterprise Resource Planning Solutions

Over the years, many organizations have shown interest in applying enterprise resource planning software in their business process. Some of the known solutions examples that a company has used majorly are: 

• SAP
• Oracle 
• Microsoft Dynamics 365
• NetSuite

Different Types of ERP Systems

An ERP application is designed to address all potential aspects of a business and improve its processes and operations. It typically comes in three types of deployment models, including:

• On-premise ERP Systems

These are akin to what their names are. This means that software is deployed and installed on the servers of a particular company. On-premise enterprise resource planning systems are licensed and can be upgraded or customized by a company’s expert team to streamline business processes. 

On-premise systems are best suited for organizations that want complete autonomy over their systems. This ensures an enterprise can handle its data and security independently. Hence, it is recommended that a skilled team be hired to help further through the process. 

• Cloud-based ERP Systems

Cloud ERP is installed and run on third-party cloud computing platforms. The benefit of using it is that you do not have to invest in purchasing heavy servers, just like on-premise ERPs require. These are popularly known as Software as a Service (SaaS) products, providing easy accessibility via the internet. 

These are best suited for companies that require flexibility, scalability, and hassle-free access to real-time data. Some common examples of cloud ERP software are:

• SAP
• Oracle
• Adobe

• Hybrid ERP Systems

One of the types of ERP systems that contains the benefits of both on-premise and cloud enterprise resource planning software. A business can use on-premise systems installed for some or all of the data and scale it up to the cloud platforms. The hybrid ERP is a mixture of public and private services based on the needs of a business. 

These are ideal for businesses with strict regulatory requirements and those using legacy software who want the flexibility of a web-based system. AWS is a common example of a Hybrid ERP system. 

Core Components of ERP System Integration 

For the proper work of enterprise resource planning, software revolves around its connection with various software and an organization’s databases. This ensures seamless data flow if done optimally, and ERP integration done in this way enhances operational efficiency. 

What are the Benefits of ERP Integration For Your Business?

Enterprise resource planning solutions are gradually becoming the need of present-day businesses because of their business-centric benefits. For every business, the definition of the benefits of ERP integration might differ in some aspects, but some of the in-general ones are included below: 

• Enhanced Customer Service

You get a 360-degree view of each customer’s interactions within your application. For instance, you have integrated ERP into your eCommerce application development project. This will aid you in understanding more about your customers with their detailed information and allow you to make data-backed decisions more precisely. 

• Improved Inventory Management

Like customers, you have a detailed view of your business’ inventory in ERP. This allows you to make decisions promptly with real-time information about the stocks. Hence, you can better manage inventory and prevent overstocking or shortage issues. 

• Data Security

One of the benefits of ERP integration is data security. When all your data is stored in a single, secure location, this minimizes the threat of data breaches and other potent attacks. Plus, these systems also allow one to define user roles and permissions to secure sensitive data. 

• Increased Productivity 

ERPs are integrated with the automation software, ensuring mundane tasks are completed quickly and efficiently. This improves employee productivity by allowing them to focus on more value-added and business-specific tasks. Not only that, ERP system integration aids in streamlining workflows across departments. This eliminates bottlenecks and makes the process more efficient.

• Better Collaboration 

Enterprise resource planning solutions improve collaboration between different departments of an organization. This includes sales, finance, and other departments accessing the data in real-time and working more efficiently and with a clear purpose. 

• Centralized Data

You do not have to check on multiple locations to get a clear and complete understanding of the data. Instead, with ERP integration, you have a single source of all data, which aids in reducing data silos. As a result, this will improve data consistency and accuracy among diverse organization’s departments. 

ERP System Integration Methods

It is not akin to a low-code/no-code platform where you have to just drag and drop elements to build or integrate components. However, enterprise resource planning systems integration is a more detailed process, and that too with some specific methods, including: 

• Point-to-Point Integration 

Starting with the simple integration method. This direct method connects two computers/systems and allows seamless data exchange. Point-to-point integration is commonly used in supply chain management software development. Why? Because of the requirements of specific apps, direct communication is needed to ensure an efficient supply chain process, from inventory management to order processing. 

• Middleware Integration 

Unlike point-to-point integration, middleware acts as a bridge between different systems, allowing them to communicate and exchange data. This all happens without facing any disparities in the process. Business Intelligence Software is best suited for middleware integration, as it simplifies integration by centralizing communication and data exchange. 

• API-Based Integration 

This method uses Application Programming Interfaces offered by different programming systems to enable data exchange. API development connects one software to another and allows them to communicate freely. 

• Enterprise Service Bus (ESB)

It is a specific type of middleware architecture that facilitates communication between different systems using a service-oriented architecture (SOA). ESB allows for more complex integration and can handle multiple data formats and protocols. 

• Integration Platform As a Service (iPaaS)

It is primarily a cloud-based platform that provides specific tools and services, making data integration across diverse environments easier. You can opt for cloud consulting services to integrate iPaaS into your system and use its capabilities, such as workflow automation. 

• Custom Integration 

This is an approach that involves developing need-based solutions to meet the specific integration needs. You can either go for custom CRM development or other tailored integrations to achieve a competitive advantage in the market. 

ERP Integration Challenges You Must Consider

No process is left aside from specific challenges. You need to identify and address potential ones before moving ahead with the implementation process. Here are some:

• Data Migration Challenges

Data plays a crucial role, and when it comes to migrating it, there might be issues that can hinder the ERP integration process. These issues would be related to:

• Receiving inconsistent structured and poor-quality data
•  Complex data mapping leads to a significant loss of information
• Not performing data cleansing techniques to ensure data integrity. 

• ERP Complexities and Legacy Systems

Sometimes, while performing the integration, a business finds it difficult to choose a specific method based on legacy system capabilities and complexities. This makes it utmost challenging to transform the data from legacy systems to new ERP. The need for custom coding would arise sometimes. 

• Inadequate Testing

One of the issues in ERP system integration is not performing apt testing. This emerges as a significant challenge. How? When a business integrates an enterprise resource planning tool without performing the required testing, chances of operational problems and post-implementation issues will arise. 

• Real-time Data Access

One of the main roles of enterprise resource planning software is to provide real-time data access. However, achieving this can be challenging if systems are not designed to offer real-time communication. 

• Scalability and Performance

If you do not adequately plan for the system capacity planning, scalability and performance issues are apparent. If you are using a cloud-based ERP, evaluating its potential data storage limitations is crucial. 

Overcoming Challenges in ERP System Implementation 

A structured approach is required to successfully overcome ERP integration challenges. When done optimally, this approach can yield the desired results. 

• Thorough Planning 

You must conduct a detailed data analysis to identify what data needs to be migrated. Prepare an outline to understand how data from legacy systems will be communicated in the new ERP. 

• Clear Integration Strategy

After preparing a plan, you must be well-versed in the legacy softwares you use. To do this, conduct a comprehensive analysis and build an ERP system integration strategy that outlines the work. 

• Comprehensive Testing 

Testing is crucial to ensure the integrated solution is working optimally. You can hire a quality assurance team from a known digital transformation services provider to get it done. This involves real-time world scenarios and iterative testing for continuous improvement. 

• Data Synchronization Implementation

You must select an enterprise resource planning system that supports real-time data access and implement data synchronization techniques to ensure data remains updated. 

• Adopting Scalable Architecture

Scalability plays a vital role. While planning to implement an ERP in your business, you must pay close attention to adopting scalable architectures. Detailed research would help in this aspect. 

How Much Does ERP System Integration Cost?

Now, you might be curious about the cost of integrating ERP applications into your business process. The price might vary based on the complexity of the process, the size of the organization, and the level of customization and development required. 

Future Trends in ERP System Integration 

The first ERP was on-premise back in 1960, and over the years, we have seen various improvements globally. Now, Cloud-based ones are the most prominent among businesses because of their flexibility and scalability. However, this is a current trend for ERP software for small businesses or large ones, and the future holds enormous possibilities in this area. Here are some:

• Artificial Intelligence and Machine Learning

The advent of AI and ML has been transforming every industry and product. This AI and ML integration can help analyze vast amounts of data quickly to identify patterns and predict related trends in the industry. 

Companies like Coca-Cola use AI-backed analytics to optimize their supply chain management.

• Big Data 

The usage of big data can help businesses gain accessibility to advanced data analytics. This way, an organization can gain more profound and real-time insights with big data. As a result, it helps them make data-backed decisions. 

Heineken uses Microsoft 365 to better use big data to make decisions based on data and improve their business processes. 

• Composable Architecture

Monolithic ERP systems were a trend of the past. Now, the advent of modular ERP systems with flexible components allows a business to customize its systems according to needs. This helps welcome newer technologies in enterprise resource planning applications. 

Oracle is the leading modular architecture-packed ERP provider. 

• IoT Integration 

The future holds a prominent trend in allowing businesses to gather data in real-time from different sources through sensors. By leveraging this data, organizations can enhance their operational efficiency. 

Siemens is a company that has implemented IoT-enabled ERP solutions to monitor equipment performance in real time. 

• Blockchain Technology

Blockchain is an emerging technology that enhances transparency, security, and traceability in ERP systems. It helps businesses create an immutable transaction record and streamline supply chain processes. 

IBM has developed and integrated a blockchain-based supply chain solution, which provides companies like Walmart with all the capabilities of this technology. 

Partner With SparxIT for Excellence-Led ERP Integration Services 

Enterprise Resource Planning software is gradually becoming necessary in current-day business because of its capabilities and benefits. However, integrating ERP software into existing business systems is typical and requires hands-on expertise. Here, ERP integration services from an expert company like SparxIT can help you move ahead in the industry while maintaining a competitive advantage. 

As an expert service provider, we precisely perform every step during the integration by considering the challenges. Our team creates a roadmap, including analysis and scope determination to data migration and support required for ERP system integration by aligning your business and project needs. 

We are well-versed in working with emerging technologies like AI, ML, Blockchain, and more. Our AI automation services providers have recently completed various ERP projects for automation needs. Experience the difference excellence brings to the integration process with modern-day emerging technologies.