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Organizations use enterprise resource planning (ERP) programs to meet the needs of an always-on culture in which a business's ability to pivot efficiently is important.

Our five key takeaways about ERP integration and its business potential are:

  • ERP integration connects disparate software programs, unites a business's many departments, and unifies business processes. Instead of a disjointed organization, the result is a cohesive, interconnected organism.
  • Enterprise resource planning system integration is the process of linking your ERP system with your software programs, data storage, and other programs and systems to enable synchronized data exchange across departments and functions.
  • Some common types of ERP integration include APIs, middleware, file-based, webhooks, custom adaptors, and third-party applications
  • Providing your ERP solution with data gathered from your everyday business operations offers multiple benefits, including retaining proprietary tools, upgrading legacy solutions, and an improved understanding of your supply chain.
  • The most common ERP integration challenges are technical or organizational in nature.

Understanding ERP Integration

Imagine your entire company in an epic tug-of-war battle against your worthiest competitor. Just another day at the office, right?

Not necessarily.

In this tug-of-war, the losers of this match fall into a pit of business destruction. Your organization's survival depends on every employee, department, and C-suite executive coordinating every inhale and exhale, feet firmly planted, fists holding tightly, and muscles perfectly synched; everyone holding position and pulling in unison — unison here is a successful ERP software integration.

But ERP integration doesn't just connect your disparate customer relationship management (CRM) programs — it joins whole departments and streamlines processes through the automation of once-menial, manual processes. Instead of a disjointed organization, the result is a cohesive, interconnected organism. A successful ERP integration is the unison that unlocks the true, tremendous potential of your business.

What is ERP Integration?

ERP is a company-wide software solution for integrating your organization's people, teams, and departments. ERP integration helps streamline the management of essential processes in Human Resources (HR), accounting, customer relations, manufacturing, and more.

Enterprise resource planning system integration is the process of linking your ERP system with your software programs, data storage, and other programs and systems to enable synchronized data exchange across departments and functions. In this unified landscape, visibility is enhanced, efficiency improved, and decision-making more informed as information sharing happens in real-time.

How Is ERP Integration Important in Modern Business Environments?

ERP integration results in system unification, increasing an organization's efficiency, productivity, and competitive edge. When a company consolidates disjointed teams, departments, and processes, the result is an automated, streamlined workflow. With increasing technological advances, the speed of modern business constantly gets faster. The less friction a business has between its moving parts, the more agility and ability to pivot when necessary.

What Are the Different Types of ERP Integration?

Some common types of ERP integration methods include:

  • Application Programming Interface (API) integration: Integrate.io offers multiple APIs so you can build the integration you need to send, call, or make updates to data. API integrations work well if your business requires data sharing in real-time or if our pre-built connectors don't precisely meet your unique use case requirements.
  • File-based: File-based ERP integration exports a system or program's data in one of the various file formats, such as CSV, .xls, .xlt, and others, and then imports it to your ERP program. File-based integration is a manual process that's more time-consuming than the other methods mentioned here, but it's a suitable method for intermittent updates absent other methods.
  • Webhooks: Webhooks allow automatic communication between applications. A webhook is a message sent from a source application to another app whenever certain actions occur. This message then triggers a subsequent action in the receiving app. In real-time applications, immediate responses are required, and webhooks are particularly useful in these event-driven environments. 
  • Customized adaptors: Some organizations employ native or legacy systems that don't communicate with other programs without a means of translation between the language of the programs. Customized adaptors are the translators for these proprietary or legacy systems.
  • Third-party applications: Third-party app integration solutions* are like custom adaptors in the sense that they facilitate communication between two programs, such as Salesforce to Bill.com or QuickBooks to HubSpot. For example, Ecommerce platforms might use several third-party apps for things like inventory management, storing customer data, shipping orders, or sending a loyalist a Happy Birthday email.
  • Middleware: A middleware platform acts as an intermediary connecting your data sources to your ERP system. Middleware platforms are perfect for organizations that have multiple data sources requiring complex data integration and transformation. Popular middleware platforms include:
    • Integrate.io
    • MuleSoft
    • Boomi
    • Jitterbit

With pre-built connectors and user-friendly Extract, Transform, Load (ETL) and Reverse ETL functionality, Integrate.io is a type of middleware that connects all your programs and systems in a no-code environment.

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Benefits of ERP Integration

Providing your ERP solution with data gathered from your everyday business operations offers your organization multiple business intelligence benefits, such as:

  • Retaining proprietary or upgrading legacy solutions
  • Improved understanding of your supply chain
  • Better insights into business process value
  • Greater data integrity and security
  • Find and removes data silos
  • Centralizes data sources
  • Automates processes
  • Faster analytics using real-time data dashboards
  • Improves analytical capabilities
  • Enhances organizational efficiency
  • Reduces operational costs

However, these benefits can only be attained with proper ERP integration.

Implementing an ERP Integration

Integration has many definitions depending on who you ask. But a working explanation of integration is:

Facilitating the communication between two or more programs or apps with different coding languages or formats.

An integration platform as a service (iPaaS) is a popular approach. An iPaaS provider offers cloud-based integration services that allow fast and easy app synchronization. iPaaS is a no-code environment with multiple applications in business; most notably, connecting your software as a service (SaaS) solutions with your ERP system.

ERP integration requires assessment and planning:

  • Assessment: What are your unique business needs? What are your integration goals?
  • Planning: What ERP system do you plan to use? What integration tools will you need?

Here's what implementing an ERP integration with an iPaaS service like Integrate.io might look like, depending on your unique integration needs:

  1. Configuring an API token for the ERP and all other apps, programs, and systems you're integrating.
  2. Creating workflow interaction definitions regarding data mapping, transfer, and migration strategies for data traveling between the ERP and your apps, programs, and systems.
  3. Configuring pipeline connections.
  4. Setting up data maps and modifiers.
  5. Setting up sync schedules and sync frequency.
  6. Testing and validating processes.

Consider the following ERP integration tips and practices to ensure your integration implementation goes off without a hitch.

Best Practices in ERP Integration

You know what they say about best-laid plans… Even with proper planning, missteps can happen.

Some ERP integration and implementation best practices include:

  • Cleaning up your data. Normalize data formats, validate inputs, remove duplicates, and double-check access controls.
  • Reviewing requirements. Take a look at what you need for a solid, working integration.
  • Planning (this can’t be stressed enough). Write up a detailed outline of the tools you need, the steps you have to take, the order of those steps, the staff that must be on site, and how your team will execute each step. Your plan should include time for mapping dependencies, encrypting data, and verifying privacy- and security-related compliance measures. You should also detail any tasks that require signoff, such as system upgrades or maintenance.
  • Evaluating security. For instance, security in ERP systems is sometimes overlooked. This is a great time to review security protocols and ensure PCI compliance. Review:

Finally, your ERP integration plan should include some buffer time just in case you run into any of the following challenges.

Overcoming Common ERP Integration Challenges

The world generates almost 329 million terabytes of data daily — which explains why some business owners feel like they're drowning in data. Further compounding the issue of data size are the multiple tools, programs, and systems the average business uses today.

The most common ERP integration challenges are of two types:

  • Technical: Compatibility, customizations, data quality, migration issues, etc.
  • Organizational: Change management, training, user support, etc.

ERP companies would have you believe these systems are simple to use and adopt, so most companies have high hopes for ERP integration benefits. But just 20% of companies will see even half what they hoped for in return.

Understanding and preparing for ERP integration challenges is key to unlocking your data's true potential, so be wary of:

  • Data silos: Depending on the age of your company, your tools, processes, programs, and business applications might be proprietary software, legacy systems, or a bespoke application written just for your brand. Manual data entry processes leave room for human error, whereas different naming conventions or coding languages can spell incompatibility during an ERP integration.
  • Personal ideas: Certain departments may not want additional eyes on their data, so it's important to explain how implementing an ERP integration is beneficial across the business. Explaining how ERP integration improves business performance can help win over anyone still resistant to change.
  • Operational impact: Changing over to an ERP system requires training — if your staff doesn't fully understand the potential value, they're less likely to engage. When you're in your assessment and planning stages, be sure to ask for input.

Most of all, be sure your staff knows these changes are for the business's good and not designed to call out any particular department.

ERP Integration Case Studies and Success Stories

ERP integration is not an easy task. The benefits of a successful integration far outweigh any challenges during implementation. Now and then, a company comes along with a really big "ask" and makes ERP integration look simple.

LG Electronics Corporation

LG Electronics is a multinational home appliance and device company headquartered in South Korea. With more than 100 subsidiaries around the world, LG is a household name.

As you can imagine, with an organization like LG, Human Resource data consolidation was not an easy feat. Subsidiary companies could use the HR program(s) of their choice. The disparate nature of LG's HR information and unproductive management practices hindered LG's HR staff efficiency.

LG could see the roadblocks posed by disparate HR data and needed to simplify administrative procedures, many of which kept the company from recruiting top talent and retaining its best employees. Poor decisions, improper use of resources, and manual procedures led this global company to stop manufacturing smartphones in 2021.

Part of any ERP integration plan is having a rough idea of how long your implementation should take. LG's case is unique — it took five years for its ERP integration to be successfully implemented! But by not giving up and putting the work in, LG Electronics saw incredible changes, such as:

  • Greater transparency during employee evaluations and of overall hiring practices
  • Better flexibility to make updates locally via a central Human Resource Management (HRM) system
  • Improved management through information access in real-time
  • Better document sharing and learning outcomes for employees
  • Saved time and money
  • Improved employee morale and satisfaction

So, what can we learn from a company like LG?

When preparing for and undertaking an organization-wide integration:

  • Know your business objectives.
  • Understand the difference between what you need to do and the limits of ERP systems.
  • Choose an ERP program with scalability that can grow with your business.
  • Perform ongoing spot checks to make sure the system works as intended.
  • Pulse check: Are employees seeing the benefits? Are they using the program correctly?
  • Collaborate closely with your ERP vendor and your integration team throughout the implementation and integration processes.

Integrating your ERP system isn't a nice-to-have — ERP integration is a must for business functions in our data-centric world: from saving time and money to genuinely boosting the morale of your team and elevating the customer experience.

Simplify Your ERP Integration with Integrate.io

Are you ready to see the benefits of ERP integration for your organization? See the transformative power of Integrate.io for yourself with a free, 14-day trial tailored for your unique business. If you're not sure where to begin, or how to optimize your current ERP integration strategies, schedule an intro call. You'll get 30 uninterrupted minutes with one of our Solution Engineers during this live demo. Bring your questions and learn how Integrate.io can put the power of your data in your hands.

FAQs

What are the first steps in planning an ERP integration?

The first few steps are the most important when orchestrating an ERP integration. First, assess what you have, what you need, and how much time you have. Then, begin planning and preparing for the integration. Next, choose the best ERP integration partner. Ensure the ERP solution is configured and customized to your unique business. Then, everything from data migration and integration to testing the integration and training your employees can fall into place.

How does ERP integration impact data analytics?

Implementing ERP integration positively impacts an organization's ability to analyze data. Disparate and disconnected data doesn't show the full picture, whereas integrating your ERP system lets you:

  • Analyze current trends
  • Plan for potential best/worst case scenarios
  • Allocate resources better
  • Make better decisions with data to back you up

The analytical capabilities of today's ERP programs can help you discover inefficient processes, optimize how you do things, and predict future customer behavior.

Can ERP integration help in compliance and regulatory challenges?

If you're having trouble meeting regulatory compliance, an ERP tool is a helpful addition to your arsenal. An ERP program can't help you meet compliance measures on its own, but companies with centralized data through an ERP integration enjoy:

  • Enhanced data and project management
  • More insightful business reports
  • Better supply chain management
  • Improved audit preparation

With an ERP system, you can identify areas in which potential compliance problems could occur and take action proactively.

What are common mistakes to avoid in ERP integration?

The greatest mistake made during an ERP implementation or integration is failing to plan beforehand. Other issues can arise from data siloes, differences of opinion, failure to properly introduce the ERP program, and a lack of training in or buy-in to the new system.