What is ERP system integration and how does it work?

Modern businesses rely on a combination of custom and third-party applications to facilitate the customer experience, fulfill orders, oversee sales and marketing initiatives, and so on. Each of these contained systems collect and manage information in their own way, which ultimately creates problems for growing organizations, such as inefficient internal workflows and unsatisfactory customer experiences, as well as unavailable, inaccurate, or duplicate data.

Modern businesses rely on a combination of custom and third-party applications to facilitate the customer experience, fulfill orders, oversee sales and marketing initiatives, and so on. Each of these contained systems collect and manage information in their own way, which ultimately creates problems for growing organizations, such as inefficient internal workflows and unsatisfactory customer experiences, as well as unavailable, inaccurate, or duplicate data. That’s where enterprise resource planning (ERP) systems come in.

With a modern ERP system, you can centralize data from sales, marketing, accounting, and other departments—and ultimately create a single source of truth for all of your business’ data. The process of ERP system integration can be complex, especially for organizations with a wide range of software applications. But with strategic ERP system integrations, your company can establish a highly efficient, secure, and scalable technological infrastructure.

Let’s take a closer look at the main benefits, technologies, and processes involved in ERP system integration.

Benefits of ERP system integration

Investing in a modern ERP system will help your business compete in the digital age via faster and more intelligent tools and processes. Here are the main reasons why so many organizations are placing increasing emphasis on ERP system integration.

Superior data synchronization

When separate business applications remain unconnected, they turn into data silos—where information is collected but not effectively managed or utilized toward a common goal. In other words, more data silos mean more inaccurate and redundant information, which ultimately stifles business innovation and scalability.

Advanced ERP system integrations offer a solution to this problem. By funneling data from each application into one platform, you can create a single source of truth, where key business data—such as customer behavior, business expenses, sales and marketing metrics, and more—are visualized accurately and intuitively. This leads to a clearer understanding of your business and therefore better strategic planning for the future. For instance, you can leverage data to make improvements to the customer experience, as well as allocate budgets and resources among internal teams more efficiently.

Streamlined internal processes

ERP system integrations help automate workflows, enabling teams to work smarter, not harder. Without this, data must be manually transferred from one system to another, which adds complexity and uses up significant time and resources.

Let’s say a customer purchases a product on your business’ website. Your ERP collects the relevant data—like the product SKU, as well as the customer’s name, address, payment credentials, and so on—and then sends notifications to all applicable systems. It could send one notification to your eCommerce platform to process the transaction, another to your inventory management solution to update product availability on the site, and another to your shipping provider to carry out order fulfillment.

With sophisticated middleware, all of these processes can be automated and tracked under a single ERP system. This means fewer time and resources need to be spent on repetitive operational tasks, employee training, and so on—resulting in higher productivity, lower costs, and greater business scalability.

Enhanced customer experiences

Being able to automatically share information and trigger tasks between systems allows you to improve the customer experience in a variety of ways. First of all, you can reduce bottlenecks in the order fulfillment process by ensuring that all departments—whether it be sales, accounting, or shipping and logistics—have the information they need to complete their share of the work.

This means the customer doesn’t end up waiting for long periods for their order to be processed and delivered. Also, with real-time data processing, you can communicate the status of an order to the customer via email or SMS, as well as add personalized content—such as product recommendations, promotions, and upsells—based on that user’s behavior. The use of real-time data allows eCommerce companies like Amazon, eBay, and Etsy to deliver fast, transparent customer experiences. And without a sophisticated ERP system, none of this would be possible.

Key ERP system integrations

Determining which software applications should be connected to your business’ ERP system will depend on a variety of factors. For most organizations, these are the most important integrations to build out and maintain:

• CRM: For sales and marketing teams to automate certain tasks, as well as track inventory, order fulfillment, and shipping, they must connect their ERP to their CRM. With access to accurate, real-time data, salespeople can move prospects through the sales process much faster and more efficiently.

• eCommerce: For businesses that sell products online, syncing their ERP and eCommerce platform plays a crucial role in delivering positive customer experiences. This enables real-time order updates for the customer, as well as reliable inventory monitoring—so that, for instance, sold items are not displayed as in-stock to live online shoppers.

• Human resources (HR): HR departments deal with a high volume of information related to employee management, documentation, onboarding, and training. Effective ERP integration with HR tools and processes leads to smoother workflows and more accurate data reporting in this domain.

How ERP system integration works

Integrating different technologies with your business’ ERP system can be a long and complicated process. With a digital transformation partner like Codal, you can rely on a team of technical experts to choose the right tools and integration methods, based on your organization’s unique goals and requirements.

There are several different methods used to integrate ERP systems with eCommerce platforms, CRMs, warehouse management software, and other critical business applications. These include:

• Integration Platform as a Service (iPaaS): This cloud-based technology is designed to help businesses build middleware with flexible coding and low costs, making it the preferred solution for young organizations that don’t require an on-premise ERP system.

• Enterprise Service Bus (ESB): ESB software provides an architecture that allows data from systems with different programming languages to be translated into one consistent format. Unlike iPaaS, ESB solutions are intended for on-premise ERP systems, making them less ideal for lean startups with a wide variety of third-party applications.

• Point-to-point integrations: This is a simple method where a specific integration is built out between two systems, such as a business’ ERP and CRM. While this may be the most straightforward and necessary solution in certain situations, it’s not the most scalable approach, since the middleware can only be used to synchronize data between those two systems.

When evaluating methods and vendors for your business’ ERP system integration, it’s imperative to understand exactly what data will need to be synchronized, and which systems should be prioritized first. For eCommerce businesses, data from inventory and order management systems are usually placed at the top of the list—as it has a direct impact on the customer experience.

In addition, you’ll want to consider the following when approaching ERP integration projects:

• Technical resources: What level of in-house and/or third-party technical support will you need to build out and maintain these integrations? And what are the technical constraints that the new integrations must abide by?

• Training: What new processes will be implemented as you roll out the new middleware? And how will you train your team and new employees to ensure maximum efficiency moving forward?

• Security: What kind of security measures do your third-party vendors take to safeguard business and client information? Are there any data security concerns associated with connecting certain applications?

• Custom integrations: What pre-built integrations does your ERP system offer? And what middleware will you need to develop from scratch?

• Budget: How much of your budget can be allocated to ERP system integration? And what is your expected ROI?

Team up with Codal for cutting-edge ERP system integration

When it comes to ERP system integration, there are many tools and processes available. So how do you know which approach is right for your business? Planning, executing, and maintaining ERP system integrations require significant time, resources, and technical expertise. And that’s where Codal comes in.

We’re a web design and development agency that specializes in optimizing ERP systems for organizations across all industries. While you focus on running your business, our team will evaluate your current technological infrastructure, identify valuable third-party tools, build any necessary custom solutions from scratch, and ultimately establish an efficient, scalable ERP system that enables your business to get the most out of its data.