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Read MoreERP Integration Explained
By Robert Taylor
Co-Founder & CTO – Salesorder.com
ERP stands for enterprise resource planning. It references the software and systems that bind different aspects of a business together. In essence, it is the bridge that connects sales to manufacturing and everything in between.
So, what is ERP integration? Well, if ERP is the bridge then ERP integration is the engineer that oversees its creation. It’s the process of connecting multiple systems with ERP infrastructure.
In the following guide, we’ll address all of the following questions:
- What is ERP integration?
- How does an ERP system integration work?
- What are the benefits of ERP integration?
- What is CRM ERP integration?
- What types of ERP are there?
Get an ERP quickly with Salesorder or keep reading to learn how these systems work and why they are so important.
How Does an ERP System Work?
Simplicity through standardization. That’s ultimately the goal of an ERP system. It
consolidates multiple different business systems and streamlines various processes. An effective ERP can reduce the number of resources needed to keep a business ticking over while also making operations more efficient.
An ERP system gathers data from various parts of the business and stores it in a central and easily accessible location. It means that information relating to sales, marketing, order management, and customer relations is not spread across various digital silos and is all within reach of the company’s various departments.
As an example, if a “low stock” warning is triggered, a new shipment can be arranged, and the inventory will update accordingly. Relevant departments will then be notified to expect the shipment, the sales team can let customers know that new stock is incoming, and the marketing team can adjust its strategies accordingly.
An ERP system gathers data from various parts of the business and stores it in a central and easily accessible location. It means that information relating to sales, marketing, order management, and customer relations is not spread across various digital silos and is all within reach of the company’s various departments.
As an example, if a “low stock” warning is triggered, a new shipment can be arranged, and the inventory will update accordingly. Relevant departments will then be notified to expect the shipment, the sales team can let customers know that new stock is incoming, and the marketing team can adjust its strategies accordingly.
The Three ERP Integration Methods
The answer to “What is ERP integration?” ultimately depends on the integration method used. The one that works best for you is determined by your current resources and specific business needs:
- Enterprise Service Bus (ESB): ESB uses on-premises software architecture that serves as a centralized tool through which all other applications communicate.
- Point-to-Point Integrations: One piece of software is connected to another, creating a simple and fast solution for smaller businesses. However, point-to-point integration becomes complicated with larger enterprises that utilize many different software solutions across numerous departments.
- Integration Platform as a Service (iPaaS): A cloud-based approach that is both inexpensive and flexible. iPaaS connects ERP systems to SaaS products and is suitable for larger and more modern businesses. Unlike ESB, there is no need for an on-premises hardware component.
Key Benefits of ERP Integration
1. Automated Processes
Humans are fallible. They make mistakes. And when those mistakes relate to other employees and customers, they can be very costly. By automating simple data-based processes, ERP can eliminate the risk of costly human errors.
Automation also streamlines processes and reduces the strain on resources.
2. Real-time Data
Real-time data updates provide the necessary departments with actionable information. For
instance, if a product is sold, the inventory will drop, and if supplies are running low, both front-end and back-end teams will be informed.
3. Single Source of Information
ERPs provide a single source of accurate and up-to-date information that can be shared throughout the organization.
It eliminates the risk of mistakes resulting from misinformation, oversights, and poor communication.
4. Regulatory Compliance
Businesses are required to track a product from source to production and through to final delivery. They must ensure that it meets compliance guidelines every step of the way. By combining all system processes, ERP software creates a single source of truth, making those processes more transparent and more accessible, thus ensuring they meet all necessary
regulations.
5. Supply Chain Optimization
Real-time data insights give businesses a new perspective on their supply chain, allowing them to monitor stock on its journey and find ways to optimize the process. As noted above, inventory tracking also makes it easier to order new stock when supplies are running low and to ensure that relevant departments are notified.
Large quantities of stock don’t need to be ordered in advance just in case there is sudden demand. It can be ordered as and when needed, thus freeing up space in the warehouse and ensuring potentially perishable stock is not sitting around.
Large quantities of stock don’t need to be ordered in advance just in case there is sudden demand. It can be ordered as and when needed, thus freeing up space in the warehouse and ensuring potentially perishable stock is not sitting around.
The Challenges with ERP Integration
Project Management
There are multiple variables involved with ERP integration. Employees must be informed and trained, processes need to be designed, planned, and tested, and all of this must happen almost synchronously to ensure everything stays on track. There are a lot of moving parts and many things that can go wrong.
Quality of Data
As multiple departments interact with the same customers, existing systems may retain duplicate sets of data. This data can exist across different departments and will need to be checked, cleaned, and prioritized to ensure only the highest-quality datasets remain.
Security Risk
The more systems and complexities you add to your ERP, the greater the risk of unsecured
connections. Cybercriminals are known to target ERP software as a means of disrupting or blackmailing companies. A properly integrated and utilized system will help to negate these threats.
Integrating Different Data Sets
Before data can be integrated into a single source, it must be located, and this is
complicated with older and larger organizations. Data could be hiding away in accounting systems, applications, or even on paper.
Budget Concerns
It’s not uncommon for ERP implementation to go over budget. Oftentimes, modifications
are made to improve usability and these send the costs spiraling above what was initially
expected.
Working with a trusted provider can help to keep those costs down without jeopardizing the end result.
Working with a trusted provider can help to keep those costs down without jeopardizing the end result.
Managing Roll Out Across Departments
ERP systems need to be rolled out across multiple departments, and this takes time.
Employees must be taught how to use the new system. They may also need encouragement—if they have been using existing systems for years, they could be resistant to change.
ERP Integration Types
CRM Integration
CRM solutions track leads, new purchases, repeat purchases, contact information, and more. CRM ERP integration works by assimilating this data into existing processes, creating a complete solution that puts everything in one place. See our guide to CRM for wholesalers to learn more about these systems.
Ecommerce Integration
What is ERP integration in the ecommerce sector? Well, it’s simply a process of combining an ecommerce system (such as WooCommerce or Shopify) with an ERP solution, thus integrating all of the brand’s data and procedures and making it more accessible to everyone within the organization.
Customer Service Integration
Customer service ERP integration combines multiple customer-facing processes with a view to improving inventory control, managing leads, and creating a better customer experience.
Customers are at the heart of every e-commerce business and streamlining and the automation provided by ERP can ensure they get their products faster, are updated about their orders, and are assisted as and when needed.
Customers are at the heart of every e-commerce business and streamlining and the automation provided by ERP can ensure they get their products faster, are updated about their orders, and are assisted as and when needed.
Talk with an Expert
We’ve answered the question, “what is ERP integration?”. We’ve looked at the pros and the cons and we’ve shown you just why ERP is central to the current e-commerce revolution. The only thing left to do is consider how ERP can benefit your business.
To learn more, talk with one of our experts today. We can guide you through the ERP integration process and help you to reap the benefits of this simpler, faster, and more accessible way to do business.
FAQ
Where is ERP Used?
ERP can be used in many different businesses and for a number of different purposes. ERP systems that serve specific needs are often known as “modules”. For instance, a module relating to order processing may include information such as order entries, inventory, shopping, reporting, and credit checking; a module relating to project management may deal with project planning, project costing, billing, and expenses.
What is ERP in Wholesale?
Most wholesalers and distributors now use ERP. It helps to consolidate numerous processes and streamline production and shipping. Stock levels are monitored in real-time, supply chain issues are rectified in advance, and orders are tracked. This is where SalesOrder’s expertise lies.
What is ERP Integration in Human Resources?
HR departments collect data relating to job offers, evaluations, payroll, and more. It’s all sensitive, it’s all important, and it must be handled with care. ERP systems help to organize and secure these databases.
Is GRP the Same as ERP?
GRP stands for government resource planning. It works in a similar way and to the same end goal, but it focuses on the public sector and the automation of government systems.
What Types of ERP are There?
There are numerous variations of ERP and different ways they can be implemented and used. In terms of the most basic “types”, they can be boiled down to “on-premises”, “cloud-based”, or “hybrid”.
What is the Main Benefit of ERP Integration?
ERP creates a single source of truth, from which businesses can derive a number of benefits. It offers real-time reporting, improved productivity, increased compliance, and company-wide automation.