ERP integration is a common practice followed by businesses for decades as a means to streamline processes across all business vertices. Yet, in a global survey by Fivetran, it was revealed that 99% of businesses face data-related issues during ERP integration to date.
While the particular reason for failed integration cannot be pinpointed, the lack of planning and testing plays a major role. As a business beginning the journey towards automation with ERP integration, this blog will guide you through all integration challenges and ways to tackle them.
Meaning and Types of ERP Integration
To understand ERP integration better, take the example of a manufacturing firm. We can assume that different departments would be operating on their individual tools and software. While the marketing team would rely on CRM, the accounts team would be drawing insights from payment gateway transactions.
ERP integration essentially integrates the ERP with all these business applications and third-party tools. By integrating with practically all your day-to-day applications, ERP integration boosts collaboration and efficiency.
Some of the most common types of ERP integrations have been listed below:
CRM Integration: From order management to customer satisfaction, CRM integration with ERP streamlines the entire sales funnel.
Payment Gateway: Integrating ERP with the payment gateway allows order processing, customer activity tracking, and data synchronization to avoid human errors.
Business Intelligence: Since all business-related data is managed at a centralized location, integrating BI tools with ERP allows fact-based decision-making and real-time insights.
Project Management: Project management tools are also integrated with ERP systems to enhance project visibility and improve resource allocation.
eCommerce Integration: eCommerce integration with ERP is a great way to boost data collaboration, bringing the front end and back end on the same page.
Overview of Integration Methods
Now that we have clarity on the “Why?”, let us focus on the “How?”. ERP integration can follow different approaches or methods, based on your business requirements. Let us understand these different ERP integration methods:
Point-to-Point: Point-to-point integration uses custom codes or vendor APIs, favorably for organizations with a simple IT infrastructure.
Enterprise Service Bus (ESB): EBS integration adds a middleware layer between ERP and third-party applications to facilitate system communication and data transfer.
Integration Platform as a Service (IPaaS): IPaaS is a cloud infrastructure comprising data roadmaps, connectors, workflows, and more. Best suited for users with cloud IT infrastructure.
Common Challenges in ERP Integration
The process sounds simple enough, doesn’t it? You pick an integration method, choose the areas of integration, and go live. But the process is much more complicated than that. Here are some of the most common challenges that businesses face at the ERP integration step:
Data Compatibility Issues: Managing a smooth data flow amid varying data formats is a challenge that many businesses face. The absence of a structured data mapping approach can lead to loss of information during data transfer and migration.
Legacy System Integrations: The extra steps of importing data from legacy systems during ERP integration can be cost-heavy and time-consuming. Moreover, future-proofing such integration can be a challenge, since most legacy systems operate on outdated technologies.
Cost and Budget Constraints: While the integration methods may seem straightforward, business IT infrastructures are much more complex. Custom developments to meet the complexities of different business models can take a toll on your budget and resources.
Data Security and Loss Prevention: At times, ERP integration with third-party applications comes at the price of data security issues and privacy breaches. In addition to that, the risk of data loss at the migration stage cannot be mitigated completely.
Unskilled Integration Partner: All the challenges listed above can be attributed to the inability to find a skilled integration partner. An unskilled integration provider with a limited understanding of your system requirements can negate your efforts instead of boosting your efficiency.
Best Practices for Successful ERP Integration
Picking the next buzzing ERP without proper planning can do you more bad than good. Here are some expert tips for guaranteed ERP integration success:
Identifying Business Needs
Our manufacturing firm from the previous example operates at scale, with a logistics department, sales team, accounts, and customer support executives. The business integrates the ERP system with only the CRM and accounting software.
Aftermath is a mismanaged logistics staff, communication gap between marketing and support, and inaccurate accounts. You can avoid this mistake by identifying key areas of ERP integration and clearly listing down the requirements of your business.
Roadmapping Integration Process
With a clear understanding of your business requirements, the next step is to create a clear and precise roadmap for integration. This will include system requirements, database formats, integration methods, and a detailed timeline.
Based on these factors, set milestones and allocate a budget for each step of migration. This will not only facilitate smooth data transfer but also optimize budget allocation.
Mitigating Data Loss in Migration
Data loss is irredeemable in the absence of a prompt migration strategy. Prepare a data backup plan and implement a mapping technique that fits your business requirements.
Downtime during the integration process is something that most businesses fail to account for. By scheduling the migration during off-peak hours and maintaining a data log during such downtime, businesses can prevent data loss and ensure a smoother transition.
Testing and Validation
ERP integration does not follow a plug-and-play approach. A 2024 survey report revealed that integration testing is the biggest challenge faced by businesses. By deploying through testing techniques post-integration, businesses can save themselves from potential failure.
Here are some types of tests to ensure ERP integration success:
Unit Testing: Testing individual components of the ERP system in isolation.
System Testing: Testing the entire ERP system in a complete environment.
User Acceptance Testing (UAT): Comparing integration performance to success benchmarks.
Training and Support
Let’s go back to our manufacturing firm, which successfully integrated its multiple business processes with the ERP system. What they failed to do was train their different teams to properly use the system.
Result? Mismanaged workflow, disorganized data, and overall inefficiency. It goes without saying that to leverage the system to its fullest potential, proper training is important. Organize employee training sessions and dedicated support to increase the ERP adoption rate.
Monitoring and Maintenance
Your job doesn’t end here. As your business requirements change, make sure that your ERP systems match your needs. Conduct routine performance audits and schedule maintenance to keep the ERP system updated.
Ensuring Security and Compliance
Lastly, ensure that the ERP software meets the data security and compliance needs of your business. A reliable ERP integration partner like InnovateNow will maintain data security through routine backups and recovery plans.
Additionally, the right consultant will also meet industry-specific compliance needs as well as the General Data Protection Regulation (GDPR).
Choosing the Right ERP Integration Partner
Managing the hassle of integration while also keeping track of your routing business activities can be resource-intensive. The right ERP integration partner like InnovateNow can handle the stress of integration and data flow, allowing your team to focus on core business operations.
With a proven track record of successful integrations, we handle the entire integration process, including system selection, customization, and roadmapping. Our team works out integration plans considering your unique requirements, key areas of improvement, and data structure.
The journey doesn’t stop at integration itself. Our dedicated team performs extensive testing and offers end-to-end support, ensuring the smooth flow of your ERP system.
Conclusion
ERP integration is a necessity for modern-day businesses to streamline their workflow and centrally manage business data. However, the complexities of integration can cause challenges related to data compatibility, native system integrations, resource management, and user adoption.
These challenges can be easily tackled by following expert tips and guidance on successful implementation. An ERP integration partner like InnovateNow can offer you the expertise that you need for smooth business operations. Whether you need consultation on the method to adopt or an end-to-end integration with existing systems, our expert team has it all covered.