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All You Need to Know About ERP Integration

Proper use of data can be the difference between profit and bankruptcy for business.  As modern businesses are made up of different functional areas like finance and accounts, human resources, supply chains, manufacturing, sales, advisory, maintenance, etc. 

Each area generates data that you as a decision maker can use to make informed decisions to achieve your organizational objectives. To make these decisions, you need access to all the data generated in a concise and readily accessible way.

But how do you keep track of all this data churned out by the different departments daily without getting overwhelmed? This is where ERP comes in.

What is ERP?

Enterprise Resource Planning is a system that ties the different business processes in an organization to make a central database for the different product lines or customers. If for example, your business operates in the supply chain industry like Walmart. This means that you not only work with suppliers, manufacturers, warehouse managers, and the likes but also the finance and human resource teams, and many others. Each team would hold different records of the status of their activities with each client or supplier.

What ERP does is that it compiles and integrates data from different departmental resources for cross-organizational knowledge into one database. With this central database, all analytics and data processing can be done seamlessly to meet organizational needs. This includes forecasting based on previous product knowledge, project pricing, hiring needs for HR, scheduling for production, warehousing and transportation, etc.

Summarily, ERP systems eradicate data duplication through organizing and analyzing relevant information for each employee and team.

What is ERP integration?

ERP system integration is the synchronization of the ERP software with other data sources in the organization to create a single source of truth from all the data collated. ERP can consume data from other sources, but, at the same time, it provides data for data visualization, marketing tools, etc. This improves collaboration between teams as they share a unified information view across teams. 

ERP systems collect inputs from different functional areas or modules to give a real-time update on each process. Here are the typical modules of ERP software:

  • Procurement
  • Finance and Accounting
  • Human Capital Management
  • Manufacturing
  • Order Management
  • Supply Chain Management
  • CRM (leads, sales, customers)
  • Ecommerce
  • Inventory Management
  • Warehouse Management

Functional areas that are left outside ERP:

  • Project management (could be included on a basic level to ERP also)
  • Marketing
  • Support (could be included on a basic level to ERP also)

What you can import to or export from ERP

Import to ERPExport from ERP
  • Time tracking data from time tracking tools.
  • Project management data
  • Website data (e.g., new sign-up on a landing page creates a new lead)
  • Emails, calls as a part of CRM activities
  • Customers to marketing tools (e.g., email marketing tool)
  • Orders for external delivery companies
  • Data for analytical tools
  • Benefits of ERP integration

    A study by Nucleus Research has proven that ERP returns $7.23 of every dollar spent on installation. Amongst the most common benefits introduced below, procedure automation allows employees room to focus on less mundane tasks, eliminating spot-checking procedures caused by human error which overall improves operational efficiency.

    Real-time updates: There are times when a department in a company needs information from another department, for example, a marketing team needing details of a recent batch of orders from the sales department. ERP integration provides real time updates whereby data is made available to everyone immediately as soon as it is uploaded. Once the sales team uploads the details of an order on the system, the marketing experts can access it immediately. With the real-time update ERP offers, there won’t be delays before teams can access specific data they need from other departments, as all updates would be reflected immediately across board. 

    Single source of truth:  As an SSOT, system integration in ERP involves collecting and vetting data from the different silos in the organization to create a centralized location for the data warehouse. If you have a well-integrated ERP as your SSOT, it will reduce the time spent validating records from different sources on the same project plan or client. This, in turn, will enhance your operational efficiency, eases business decision making, transparency in processes, and improved team collaboration.

    Visualized workflow: Working from a centralized database enables you to view cross-functional workflows across the spread of the entire organization. That way, team leaders and managers can get a status update on what the other team members are working on, scheduling, enhancing planning, etc.

    ERP system integration

    ERP system integration is comprehensive across the entire organization and would usually require a collaboration between the CEO, CFO, CIO, and other executive management leaders. Choosing the best type of integration for your ERP system would usually depend on the strategic goals of the organization, hence the need for all managerial hands-on-deck.

    Types of ERP integration

    There are several different types of ERP integrations, the most common are as follows:

    • ERP – CRM 
    • ERP – Ecommerce 
    • ERP – Customer service
    • ERP – Project management 
    • ERP – Data analytics

    Note: ERP integrations vary per business type and available software.  For example, if your ERP fully supports CRM, you don’t need to integrate it with other CRM regardless of your business objectives. If your company is not e-commerce, you won’t need this integration, and so on.

    Of this list, only the ERP – Data analytics integration will be useful for most types of businesses and software. 

    ERP and CRM integration

    If a seamless customer journey is one of your strategic goals, then, this integration type is for you.

    ERP-CRM integration is the synchronization of the ERP and CRM software to ensure consistent, automated sharing of information between both software. For businesses looking into ERP integration with CRM, a key tip is to find an integration platform that supports their CRM needs both now and, in the future.

    ERP – CRM integration benefits

    Customers and orders

    CRM software would usually contain client details, the status of conversion from lead to order, and, as a result of a sales process execution, sales orders. Whereas ERP would contain order’s processing data such as the order itself, invoicing, shipping, and similar details. Integrating each software eliminates duplicity of customer details, creating a more comprehensive overview of each client transaction.

    Inventory volume, prices, and product details are usually contained in the ERP while sales agents prefer to work with the CRM since they input the customers’ details in it. Integrating the information on both platforms would support sales agents in creating fact-based quotes, making the sales conversion process a seamless one.

    Payments

    Being the final stage of the sales conversion process, payment details and due dates are usually contained in the ERP. Integrating both ERP and CRM keeps Sales Agents up to date with payment deadlines and helps support prompt debt recovery.

    Ecommerce ERP integration

    Integration of ERP and an ecommerce site can benefit businesses through an increase in customer retention, a boost in revenue, and improved productivity. 

    Ecommerce – ERP integration benefits

    Sales consolidation

    One key benefit for businesses running an ecommerce store is centralizing sales information from the different sales channels business is conducted on. This could include a physical location, catalogs, social media, and other online platforms.

    Being able to pool information from the different channels through ERP-ecommerce integration helps monitor sales trends and traffic from the different sources. In addition, a sales forecast based on this data would help the business meet potential demand by informing stocking decisions across outlets.

    Avoiding markdowns 

    200 senior decision makers at US retail companies surveyed by Coresight Research and Celect indicated that overbuying and underbuying inventory are key challenges for retailers. So, one of the most common reasons to make this integration is to share inventory data with the e-commerce tool. 

    ERP -> E-commerce

    ERP contains sales data from all channels and it’s crucial to display accurate product availability on the website so as not to oversell. 

    Customer service – ERP integration

    ERP integration is not only focused on enhancing internal business processes but also improving customer satisfaction. Through ERP integration, businesses can consistently match demand with supply, track support, and improve customer experience. Here is the data you can import/export via this integration:

    ERP to Customer serviceCustomer service to ERP
    Orders statuses, account balance, transactions history, etc.Claims data, reclamations, orders cancellation, refund requests, etc.

    Customer Service – ERP integration benefits

    Better access to information for improved customer service

    The ERP-customer service software integration provides service agents with all customer data to solve any claim/case. This information can overall improve customer satisfaction and retention.

    Matching supply with demand

    With ERP integration, businesses can assign inventory to customers, define service level agreements and set location and priority location for customers. With these settings in place, the system automatically resets the inventory level and fulfills orders based on the settings already created.

    ERP – Project Management Integration

    Projects are an indispensable part of businesses, and project management tools provide details on the project: tasks and allocations, timelines, cost per section, and other activity-related information. Here is the data you can import/export via the ERP – Project management integration:

    ERP to Project management softwareProject management software to ERP
  • New project data
  • New employees data
  • Payments data (to calculate project budget)
  • Employees day offs
  • Actual time spending and stages closed (ready for invoicing)
  • Project plans and resources needed for new hiring or procurement processes
  • ERP – Project Management integration benefits

    • A simplified view of status updates with ongoing and completed projects for team leads, including the work schedule for employees.
    • Easy work scheduling and designation especially in cases where a team’s start date depends on the end date of another team.
    • Simplified hierarchical structuring of tasks and deadlines on projects for all employees.

    ERP – Data Analytics Integration

    ERP tools contain tons of valuable data that you can analyze to gain unprecedented insight into the performance of your processes. Many ERP solutions provide built-in tools for data analytics, but not all of them. Moreover, you may need more than they can give, so integrating your ERP with a data analytics or data visualization tool is an actionable option. 

    ERP – Data analytics integration benefits

    Supply chain optimization

    With ERP, you can get information about each stage of the supply chain. Atomization and further analysis of the supply chain data will help you identify any procedural gaps or errors and hence eliminate them. 

    Forecasting with top accuracy

    Collect your data from ERP to build actionable dashboards and advanced reports. This in turn will let you implement predictive analytics to project the future progress. 

    You can also rely on machine learning algorithms for your analytics, for example generate batch prediction via Google BigQuery ML. Such data-driven forecasts with ERP – Data analytics integration will give you more accurate results compared to guesswork-based predictions.

    ERP integration tools

    ERP integration tools are meant to move and orchestrate data from ERP software, such as SAP, Netsuite, Odoo and many others. While they all do the same basic thing, each of these tools have their differences and unique selling points. Here are some examples of the efficient ERP integration tools for process optimization you should try out:

    Boomi

    boomi

    The Boomi AtomSphere integration platform-as-a-service is a 100% cloud-based system. Some of its state-of-the-art features include cloud-to-on-premises, cloud-to-cloud, on-premises-to-on-premises, and B2B integration. This system supports real-time integration and elastically stretches to meet high-volume needs in various tech environments.

    Workato

    workato

    Workato is an integration-led automation platform to implement end-to-end automations that work across your ERP system. You get out-of-the-box connectivity to thousands of SaaS apps, legacy systems, etc. Workato also provides you with automation templates so you can set up custom automations with no-code or at least with low code. 

    Coupler.io

    Figure 2.4.3. Coupler.io to import data from Facebook into Excel Google Sheets and BigQuery

    Coupler.io is an iPaaS software that automatically syncs information between different sources to create live dashboards and reports, transform and manipulate values, collect and back up insights in one place. The destination apps include the most popular spreadsheet apps, Google Sheets and Excel, as well as Google data warehouse – BigQuery.

    With Coupler.io, you can set up an ERP – Data analytics integration with just a few clicks. It supports ERP and CRM systems as data sources, so feel free to check out all the available integrations.

    ERP integration example

    Let’s check out the most frequently used integration example – ERP and CRM. The idea is to integrate two separate solutions:

    • An ERP system, in our example, this is Odoo
    • A CRM system, in our example, this is HubSpot CRM

    Both Odoo and HubSpot CRM store information that is vitally important to business growth. So, when integrating these systems, you will get a sales and marketing hub for the data instead of separating record-keeping processes for it. 

    Here is what the Odoo – HubSpot CRM integration can give you:

    • Sales & marketing automation
    • Contact management
    • Email scheduling
    • Multiple deal pipelines
    • Email marketing
    • Lead analytics dashboard
    • Custom revenue reporting
    • Predictive lead scoring
    • Event-based segmentation
    • Smart notifications
    • And many more

    As a result, instead of using two separate systems, you get a synergy of integrating them into a single source of truth. 

    Best practices in ERP integration

    Everything you need to know about ERP integration for your business would be incomplete without best practices for your consideration when deciding on your ERP Integration system. For starters:

    Consider all beneficiaries of the proposed system

    Integrating all your business data in one place would improve your operational efficiency but have you considered the end-user of the integration system? A consideration of the sales agents or other team members, how much time/money/effort will be saved from the integration including the customers’ experience goals will roughly give an idea of what features to look out for in the proposed ERP system.

    Get the right people on board

    A proper ERP integration would require an application specialist for both systems, a specialist in your integration tool, and a project manager at the very least. It’s important to have these specialists on board for a smooth transition process rather than learning ‘on-the-job’.

    Plan your integration points

    With due consideration for the beneficiaries of the proposed system comes a plan for the points with the most essential need for integration. The plan should include:

    • Source: Where is your data coming from?
    • Target: Where is your data going?
    • Direction: Which direction does the data need to flow? One-way, Bi-Directional? What is your master system that contains the source of truth for each type of data?
    • Frequency: How often does the integration need to run? Hourly, Nightly, On-Demand, Real-Time?

    Data Audit

    Knowing what data was intended for the ERP system, you should audit the integration to ensure that it’s current, relevant, and usable.

    Once confirmed, estimate how much data will be moving from system to system and how that may affect your network. Updating all records every five minutes will take a lot more bandwidth than checking for changes every half hour.

    ERP integration challenges

    Some of the challenges faced in the ERP integration decision process include:

    1.    The decision of the Right ERP Integration Strategy: Businesses can be similar but unique. The ERP system you incorporate for your business must align with your business goals and operations.

    2.    Maintaining your ERP Integration: As businesses expand, goals and ultimately data points might also require modification which in turn requires updates in the integration as well. At other times, there might be a problem in data transfers between the ERP and other systems, resulting in an integration failure. This is why the no-code platforms, such as Coupler.io, have become so popular these days, since they allow you to set up an ERP integration with a few clicks rather than lines of code.

    3.    Standardizing Data across Applications: Data types and formats can differ across applications, for example, the unique customer ID accepted on CRM might not be relevant in the ERP. The key is to ensure that the different data types are standardized across applications for seamless integration.

    ERP integration meaning for your business

    Now that you know about the different types of ERP integration available, the question is, which integration type should you use? Well, there is no one-rule-fits-all thing with ERP integration, the type of integration to use is dependent on your goals and needs.

    It’s quite straightforward to say that an Ecommerce company will be best served using Ecommerce ERP integration. While the ERP CRM integration will come in handy when you are trying to move a customer along from one point of the customer journey stage to another.

    The key is to choose an ERP system that considers your business specifications, and following our recommendations in this article of course!

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