IntegrationERP

A Complete Guide to ERP Integration: Types, Benefits and Challenges

By October 9, 2019 No Comments

ERP (Enterprise Resource Planning) systems help you to transform, integrate and scale your business. Industries that are into wholesale distribution, retail, and eCommerce are using ERP solutions. While it was eventually started as a system to automate core back-office functions, ERP has expanded to business intelligence that can also handle the front-office functions like eCommerce, sales and marketing automation. Due to this expanding scope of functionality in ERP systems, it is not enough if you don’t have your ERP application integrated with other business platforms like eCommerce or CRM, especially if you are a retailer, distributor or manufacturer. So, let’s look into why ERP Integration is needed for your business and everything else with respect to ERP Integration.

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What is ERP?

 

Enterprise Resource Planning is a business management software that helps simplify the way organizations elicit, track, manage and work with their data such as customers, products, finance, logistics, supply chain, and other vital business data and operations. An ERP typically keeps the data that is usually handled by different departments integrated so that managing company data becomes seamless. Though we will be focusing more on ERP Integration in this blog, we also have a blog written on further details: Why ERP is important for your business? The definitive guide to ERP selection and implementation. The blog guides you on what ERP is, why ERP is important for your business and a general guide towards selecting an ERP application that suits your business. So have a look at it, in case you want to know more about that.

What is ERP Integration?

What is ERP Integration?

Now that you know what an ERP does and how to choose a suitable ERP software, you need to look at what ERP Integration is. ERP Integration is simply connecting and synchronizing your ERP software with other business applications such as eCommerce (front-end), CRM (Customer Relationship Management), EDI (Electronic Data Interchange), marketing tools such as analytics, and other databases and data points that your business operates with. In short, connecting all the points a business leverages to input, manage, track and output data that are meaningful and important. For instance, an eCommerce storefront is where a visitor submits a lead, requests a demo, and/or purchases a product. A CRM is software you might use to manage lead data such as requirements, point of entry, lead quality, position in the sales pipeline, customer details and transactions. So, in general, it is also necessary that your ERP software communicates with all other platforms and synchronizes data from Omni-channels. That’s what ERP Integration provides you with.

Why should you do ERP Integration?

Though it’s relevant that ERP as a whole is an integrated set of different data points of an organization, it needs to integrate with several business systems so that it can improve the overall accuracy of operations. First, let’s look at what could go wrong if you don’t have ERP Integration in place for your business.

Manual Dataflow:

Now imagine a lead form submitted through your eCommerce website. Without integrating your ERP with eCommerce, it remains in your eCommerce unless someone manually makes an entry into the ERP. This increases workforce burden and lessens operation effectiveness. ERP Integration is a must to eliminate this time consuming, labor-intensive work.

Error-Prone Operations:

This pain point arises as a consequence of the above-mentioned point with manual data entry. Humans are error-prone and tend to make mistakes. This leads to entering wrong or missing customer and product data into ERP systems, resulting in departments working with incorrect information and an avalanche of other problems, which ultimately ends in customer dissatisfaction and dropouts. And all these are much more likely if you don’t integrate ERP with other systems.

Real-Time Data Unavailability:

As seen in the above two points, disintegrated systems mean manual data updates. This implies that the data is not communicated with the ERP immediately, as and when it arises. Ultimately, the relevant stakeholders in your company only tend to their activities, thereby wasting valuable days by manually transferring data. And after the operations are done, it takes even more valuable days to provide the end service to the customer. Ultimately, again, this leads to drop-offs and a loss of revenue.

Poor Sales Funnel Conversions:

Sales Funnel is the end-to-end cycle from a person visiting a website, to a person doing business with us, and ultimately even repeat business. This includes a lot of stages such as the lead, prospect, customer, repeat customer and business evangelist. An efficient sales funnel indicates higher conversion rates and reduced conversion times from one stage to another. This is an unlikely possibility without ERP Integration, thereby handing your business a poor sales funnel and making you lose out on a chunk of leads that can become customers.

Hampered Team Collaboration:

Consistency of data between systems is imperative for different teams to work with the same objective and intensity and without conflicts. This means that without ERP Integration, team collaboration is bound to be hampered, such as in this scenario of inventory management:

  • The product has gone out of stock in the eCommerce store.
  • The sales team requests the inventory team makes sure the product stock is maintained.
  • The inventory team finds availability of stock in the ERP product section and gets back to the sales team to recheck the product in eCommerce.
  • A series of interactions goes on between the sales and inventory team, thereby leading to conflicts and dissatisfaction between both teams.
  • The end result is counterproductive in terms of business revenue.

 

Benefits of ERP Integration:

Benefits representationBy now, you will have understood what an ERP Integration is in detail, why you need it, and the different types of ERP Integration that can be beneficial for your business.

Automated Business Processes:

Since we discussed that customer data, order details, and other key business-related information arises from many applications and points such as eCommerce, CRM, EDT, EAM and so on, it is paramount that your ERP software gets all this data, as and when it arises. This can happen only by integrating your ERP with your other business applications. Otherwise, you have to break your heads by manually making the data entries into the ERP, which wastes your productive time. ERP Integration helps you to streamline business processes and workflow across various office departments.

Single Source of Truth:

Integrating ERP systems with other applications ensures that data from different applications, such as eCommerce and CRM, remain updated in the ERP software. People from all departments would have access to omnichannel business data. For Instance, the inventory management team would have access to the real-time inventory of products available in eCommerce, and can immediately act upon a shortage of products. The accounts team would not have to wait for the marketing and sales teams for revenue details. Moreover, having all data in the ERP ensures that it remains the single source of truth for data and employees refer to data in ERP in case of any discrepancies.

Accuracy of Operations:

We now already know ERP Integration automates business processes and reduces the human workload of manual data entry, and it also provides the advantage of a reduction in human error. The accuracy of data in ERP software increases as a result of teams working with the right data. For instance, without ERP integration, the operations team would have to manually make entry of customer orders from eCommerce, which is error-prone, ultimately leading to the wrong products being delivered and/or sales personnel approaching leads with incorrect requirements.

Efficiency of Time Spent:

You are eliminating one of the major time-consuming parts of the work, which is manually entering data into the ERP. This frees you of useless burdening work and facilitates you to spend the equivalent time in other useful business operations, such as market penetration, new feature implementation, business expansion, process optimization, and so on. Since ERP Integration makes accurate real-time data available in the system, you can easily make use of the data to derive high-level actionable insights and make decisions that help take your business to the next level.

Enhanced Workflow:

Integrating your ERP with your primary business tools, such as project management, enables the centralization of work-related data. This means everyone in the company will be able to see what others are working on, and you can set priority levels to employee tasks and schedule processes. Also, knowing what teams are working on will not only help you understand whether the on-going activities are aligned with business objectives, but also make modifications in tasks wherever and whenever necessary. For instance, if you had asked for a project report from your employee, but see that they are working on a priority development task in a project, you can then reschedule the task you assigned accordingly.

Accelerated Sales Conversions:

Accelerated conversions in sales mean more website visitors are getting converted into leads and more leads are getting converted into customers in shorter time spans, compared to what it was before integrating your ERP application. Lead information from CRM and eCommerce immediately flows into eCommerce, which enables all departments to collaboratively work towards specific customer demands and needs. More and more leads are processed effectively in less time, which provides a dual advantage of increased customer satisfaction as well as business revenue.

 

Different Types of ERP Integration:

Types figureThere may be numerous kinds of business software that can be integrated with ERP, however, ensuring ERP integration with the following major applications is pertinent. Based on what business purpose it fulfills, what pain point it solves and what platforms the ERP integrates with, we can classify ERP Integrations as:

eCommerce ERP Integration:

When it comes to organization, data collection should always be associated with implementation. Most of the customer data or those that are external to the organization originates at the eCommerce store – the point where your business talks with its intended customers. Data such as leads, customers, orders, transactions and shipping stats arise at eCommerce. Integrating your ERP application with the eCommerce store ensures that data is available to all members of the company who need to work on fulfilling a requirement that arises in the eCommerce store. Most businesses implement their eCommerce stores on platforms such as Magento, Shopify, and SAP Hybris, where the quantum of the depth of information that’s generated in the front end is huge, so it will be an uphill task without ERP Integrating with these platforms

Common Benefits of eCommerce ERP Integration:

 

  • Uniform availability of front end data across departments
  • Automatic update of inventory levels both in the front end (eCommerce) and back end (ERP)
  • Dynamic pricing can be implemented, customer-specific and in real-time
  • Easy to operate and execute in case of contingencies, such as the immediate requirement of the product that’s out of stock

How Cloras helps?

In case you are looking for ERP integration with eCommerce, here’s CLORAS for you. CLORAS – the go-to iPaaS integrator for integrating your ERP applications with market leader Ecommerce platforms such as:

  • Magento
  • Shopify
  • BigCommerce
  • SAP Hybris
  • Salesforce Commerce Cloud.

CRM ERP Integration:

Any successful business is marked by superior customer service and satisfaction. CRM is a datahub for everything that’s related to customers, their transactions, orders, communications and much more. A lot of times, salespeople are blamed for poor sales funnel performance, when in reality the other departments such as order management, logistics, and inventory teams function poorly. This arises due to non-communication between your ERP software with the CRM application. That is why integration between ERP and CRM is crucial, mainly for creating a synergy between Demand (CRM) and Supply (ERP).

Common Benefits of CRM ERP Integration:

 

  • Teams can work collaboratively towards fulfilling a customer requirement
  • Optimized sales funnel conversions and performance
  • Quick effective customer service and consequential customer satisfaction
  • Uniform customer information across systems and departments due to synchronized ERP CRM systems

How Cloras helps?

CLORAS seamlessly integrates with top CRM software such as

  • Salesforce
  • Oracle Netsuite
  • Microsoft Dynamics 365
  • Oracle Sales Cloud
  • Hubspot and more.

In case you are looking for a middleware that it integrates and automates transactions between your ERP and CRM software, CLORAS is the best fit for you.

Project Management Integration with ERP:

Project Management is another indispensable activity for any organization, especially enterprise ones. It is what provides all information related to the project currently being worked upon, who works on what tasks, deadlines, and other activity related information. Most ERPs provide an inbuilt project management solution, however, we recommend you to go for a stand-alone tool since it provides many more features and sophistication with respect to project management. And, integrating your project management tool with your ERP does wonder for not only the manager but also every employee.

Common Benefits of Project Management Integration with ERP Software:

  • All department leads know the completed, on-going and scheduled works of employees
  • Easy for work schedule in cases where a team can only start the process after another team completes
  • Easy for employees of all hierarchies to prioritize tasks and consequent deadlines

How Cloras helps?

CLORAS can integrate with leading project management software. Request a Demo or Contact Us stating your integration requirements in terms of what project management tool and ERP software you are using, and we will have them integrated in just around a week’s time.

Business Intelligence Integration with ERP:

Business Intelligence software help take your organization to the next level. It facilitates by providing insights on various fronts that help make stakeholders decisions regarding new feature introduction, business diversification, new product launch, penetration of new markets, forecasts and targets for the upcoming financial year, and so on. Though I have mentioned only high-level actionable insights here, one can leverage the tool to make any level of decision, even right down to the employee level, such as workflow changes facilitating efficient ergonomics, and so on. By integrating your ERP application with BI software, you make sure employees across departments and hierarchy are able to access these actionable insights and make decisions within their degrees of freedom.

Common Benefits of Business Intelligence Integration with ERP:

  • All employees are empowered by data and insights
  • Everyone in the employee hierarchy can collaborate in providing organization level suggestions that can create a breakthrough
  • Accurate forecasting and consequently enhanced decision making
  • Transparency, openness, and freedom to make decisions for all would mean elevated employee satisfaction

How Cloras helps?

CLORAS facilitates integrating your Business Intelligence software with ERP. Request a Demo and one of our experts will take you through the integration process.

EDI ERP Integration:

Electronic Data Interchange (EDI) is a platform that facilitates electronic data transfers in a prescribed format across organizations such as trade partners, suppliers, distributors, and more. Data such as purchase orders, transactions, shipment details, inventory levels need to be instantaneously communicated between organizations, as and when they sprout up and in a secure manner. That’s exactly what EDI serves to accomplish. But where will the EDI get the data to be transferred? All the above-mentioned details arise either in eCommerce, ERP or PDT devices in offline stores. But since ERP is the primary source of truth for data, it goes without saying that your EDI application must be integrated with the ERP.

Common Benefits of EDI ERP Integration:

  • Instant data transfer among business partners enabling seamless order management (NOTE: eCommerce must be Integrated with ERP for real-time data synchronization in order to achieve this)
  • Accuracy in data communicated with respect to inventory, orders, invoices, shipping (and much more) improves, leading to faith in data received or sent
  • Ultimately improved supply chain and logistics for your eCommerce organization

How Cloras helps?

CLORAS Integrates your ERP platform with the top EDI platforms in the marketplace. In case you haven’t leveraged an EDI platform for your business, especially if you’re into eCommerce, now is the time for you to purchase one. Request a Free One-on-One Demo in case you have an immediate EDI ERP Integration.

EAM ERP Integration:

Enterprise Asset Management (EAM) is a software that helps you to manage an organization’s assets such as raw materials, installation devices, vehicles, heavy equipments that ensure production. EAM is a must especially if you are into the manufacturing sector. Even otherwise, EAM might streamline the way all your organization’s assets are managed. All activities such as managing inventory, supply chain, demand planning and forecasting, maintenance management that are related to handling companies’ assets, These functionalities of an EAM can be optimized and made much more efficient by integrating the ERP application, thereby synchronizing inventory, logistics, human resource and other relevant data with the EAM system.

Common Benefits of EAM ERP Integration:

  • Effective utilization of physical and financial assets for asset maintenance management by keeping the corresponding data points between two systems connected and synchronized
  • Advanced planning of human resources required for managing assets
  • Comprehensive planning of inventory requirements well in advance since the ERP Inventory data point is in sync with the EAM

How Cloras helps?

In case it is a top priority to integrate your ERP and your EAM, just Request a Demo at your convenient date and time, and our experts will brief you through the integration process with the help of CLORAS.

How to Integrate ERP with your Business Applications

Integrating your ERP with your business-critical applications is simple and straightforward. The steps to configure your ERP Integration with systems using a simple iPaaS Integrator are as follows:

Add System Credentials

Firstly, you will need to configure the credentials (API token) for your ERP and other systems that you wish to integrate.

Create Flows

Set up the base template for the interaction between your ERP and other applications as to when and how data should be transferred, and how CRUD (Create, Read, Update, Delete) operations should be performed.

Configure Integration Pipes

Pipes are nothing but data points in your systems, such as Customer Data, Product Data, Order Data, and so on. All you have to do is configure similar pipe connections (e.g. Inventory Data) in the connected systems (ERP and eCommerce).

Set up Mapping and Modifiers

Up next, set up connections between the data fields of ERP, eCommerce, and CRM systems. (e.g. “Customer Name” field from ERP split and mapped to “First Name” & “Last Name” fields of CRM.) Set up advanced business logic on how data fields should interact with each other. (e.g.: Split “Customer Name” in ERP into data fields “First Name” and “Last Name” of CRM).

Enable Auto Mode

Make it so the integration between the ERP system and other applications goes live after automating and setting up the sync schedule and frequency (real-time synchronization, if needed).

Your Integrator application takes charge from now on.

Typical Challenges in ERP Integration:

Challenges in ERP IntegrationWhile it is obvious that ERP Integration solves several business pain points as stated above, it does not seem to be a cakewalk. There exists few major challenges that come with integrating your ERP with other business applications. These challenges can be classified as pre-integration and post-integration challenges, and they need to be paid attention to before stepping in.

Deciding on the Right ERP Integration Strategy:

Business objectives vary from one business to another. So, it is important that the ERP you incorporate for your business aligns with the business goals and operations. For example, if you are in an eCommerce business, you might want to look for an ERP vendor that caters to eCommerce specifications. In case your business has certain custom requirements, you have to look at whether that can also be implemented by your ERP application. Selecting the appropriate ERP combined with the right strategy for ERP Integration, such as applications that need to be integrated with ERP, should be the first thing you consider before integrating.

Maintaining your ERP Integration:

Having your systems integrated is not the only responsibility of a successful ERP Integration strategy. As businesses expand, and goals and activities undergo a change, data points with which the operations happen might also go through modifications. New databases might be added, or the specifications of data fields (such as “Customer Name”) in the existing data points might be changed, thereby requiring such changes to be updated in the integration as well. Otherwise, there might be a problem in data transfers between the ERP and other systems, resulting in an integration failure.

Standardizing Data across Applications:

Different applications provide different data types and formats. What might be relevant in one application (e.g. CRM) might not be relevant in the ERP. Sometimes your ERP does not accept certain data, such as a unique customer ID that comes from the CRM. You have to make sure that all these different data types are standardized across applications. Not only that, before integrating the systems, you have to make sure the APIs of the ERP and other systems accept the transfer of data from/to one another. Standardizing data is a challenge that, once taken care of, will work wonders and reduce a lot of the burden that comes with ERP Integration.

Incorporating Customization:

Interfaces that come native with your applications such as ERP, eCommerce, CRM, and others, does not always cater to all your business needs. Most of the applications provide a standard set of solutions and their respective interfaces support a standard set of data inflow and outflow. Businesses today are evolving, and a lot and requirements are becoming more complex in nature, requiring customized solutions from ERP applications and corresponding customized support from their API Interfaces. So, you have to make sure the ERP software vendors adapt themselves to your custom needs, or else you might have to look for an integration solution provider who can provide you with a custom interface or API.

ERP Integration Specialization:

As both ERP and your business needs are complex in nature, it is crucial that all the people you deploy for ERP Integration are specialized in the same and are properly boarded onto the integration process. Though you can deploy in-house personnel for integrating ERP with systems, it is recommended to outsource your integration requirements to partners specialized in ERP Integration, with an integration platform that caters to all your custom integration needs and solves all your integration challenges.

Do make sure to take care of these predominant challenges while performing your ERP Integration.

Successful ERP Integration Strategy using CLORAS

 

By now, you know how quintessential ERP Integration is, the types of ERP Integration, the need, and benefits, as well as the challenges that need to be attended to while integrating your ERP software. You must now be thinking, where should I start and how should I implement ERP Integration? Don’t worry, you are at the right place! CLORAS is an iPaaS middleware that completely takes care of integrating your ERP with your business applications, and it automates your data transactions between applications. CLORAS also solves your custom integration requirements through an array of features such as custom flow builder, advanced mapping and modifiers, and so on. Want to know all the integration capabilities CLORAS provides? Have a look at our entire feature suite. Moreover, CLORAS can also provide a Custom API for your ERP and business systems, tailor-made to suit your integration requirements.

CLORAS has been providing seamless integration solutions for several customers using leading ERP platforms like SAP, Oracle, Microsoft Dynamics, Epicor, Netsuite, Distribution One, DDI Inform, and much more.

Now, all you have to do is Request a free one-on-one demo at your convenient date and time with our integration expert who will take you through your ERP Integration process using CLORAS. You can also Contact Us by filling out a simple form stating your integration requirements.

Conclusion:

If you have been with us till now, you will have understood everything you need to about what ERP Integration is, why you need to Integrate your ERP, the different types of ERP Integration your business must incorporate, the benefits and challenges of ERP Integration, implementing your ERP Integration, and how CLORAS provides a supreme ERP Integration solution. If you’re wondering how to integrate your CRM, checkout this article on a complete overview of CRM Integration.


 

References:

  • https://selecthub.com/enterprise-resource-planning/best-erp-software-integrations
  • https://docinfusion.com/blog/what-is-business-integration-in-erp
  • https://www.aphixsoftware.com/blog/ecommerce-erp-integration.html
  • https://adeptia.com/blog/erp-integration-unlocking-new-ways-work-erp-solutions

 

Srivatsan

Srivatsan

Srivatsan, Digital Marketing Executive at DCKAP, has vast experience working in B2B space. Being an enthusiast, a passionate learner and a business blogger of B2B enterprise applications, he has a keen sense to write on trending topics and address business challenges and solutions.