Clicking on this article means you either own ERP software and need to understand how to perform an ERP integration or are a potential buyer concerned about whether an ERP system integration can work for your specific solutions.

You can rest assured that you’ve come to the right page! This article covers everything from forming an ERP integration strategy to methods, benefits, challenges and more.

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Table of Contents

• What Is an ERP Integration?
• Primary Benefits
• Best Practices for Your ERP Integration Strategy
• ERP System Integration Approaches
• Challenges
• FAQs
• Next Steps

What Is an ERP Integration?

ERP integration involves the merging of different systems into your ERP software for better consolidation, cross-department collaboration and more.

Maria Opre, cybersecurity expert and senior analyst at EarthWeb, said ERP integrations “essentially connect the dots between sales, marketing, HR, finance, production and other business units.”

Kelly Indah, tech expert and security analyst for Increditools, said an ERP system integration “is crucial for enhancing company workflows as it ensures communication between different organizational functions.”

Primary Benefits

ERP integrations come with multiple benefits, from saving money and boosting productivity to centralizing workflows and more.

Boost Productivity

Centralizing workflows can ensure effective communication and improved efficiency.

For example, integrating manufacturing and PLM tools ensures product development and production floors stay on the same page regarding distinct changes. This communication can lead to higher market times and customer satisfaction scores.

Improve Mobility

Mobility allows you to access the ERP system from any device, such as cell phones and tablets.

Gain real-time data and notifications from virtually anywhere instead of waiting until you return to the office.

Make Better Decisions

Smooth ERP integrations mean simplified data gathering.

Use business intelligence (BI) or business analytics (BA) tools to check metrics, create role-based or customizable dashboards, and garner vital company information so you can make quicker decisions for workflows, profitability, employee retention and more.

Opre said, “With all data flowing into a unified platform, leaders can identify inefficiencies, optimize resources based on real-time needs and tailor strategies based on holistic insights across the organization.”

Strengthen Department Communication

ERP integrations boost cross-collaborations and communication across company departments.

For example, HR personnel can share payroll data with the accounting departments for better recordkeeping. Sudden changes mean you only have to input information once, and it automatically updates across the system.

Save Money

Instead of buying numerous systems, you can save money on integrations. You can also improve budgets, reduce costly errors and more.

Indah said integrations “automate routine tasks and consolidate operations, highlighting inefficiencies and cost-saving opportunities. This efficiency not only saves money directly but also improves the overall ROI by enhancing operational effectiveness.”

Len Reo, president of Attivo Group LLC, described why companies should prioritize their obstacles and find integrations that address them.

Usually, there is some issue that keeps business managers and/or owners up at night. Prioritizing these issues is the first order of business. Then, by removing data silos, the organization can connect or integrate applications. Without silos, information is passed around easier, making data available in real time.”

Opre added that “companies leverage ERP integrations to do more with less. Integrations directly save money by automating manual processes. This prevents duplication of efforts, eliminates errors that would require rework and reduces labor costs.”

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Best Practices for Your ERP Integration Strategy

Planning, training and maintenance are some necessary steps to include in your ERP integration strategy.

Planning allows you to effectively know what you’re integrating and how to go about the merge. Opre stressed that careful planning “is essential to align on goals and choose the right integration method.”

Training ensures employees know what they’re getting into. Reo said ineffective training is “like having a shiny car in the garage that you know how to turn on, but don’t know how to use all the bells and whistles that came with it.”

Maintenance helps you determine the best way to find and resolve problems if any arise.

Indah said, “System maintenance guarantees the ERP system remains current and functional.”

Reo mentioned that successful ERP integrations require “many tests of the system in the actual environment of the business before going live. It’s the practice that makes perfect.”

Lastly, Opre said data migration “seems simple, but can make or break the implementation, so strong data governance must be ensured.”

ERP System Integration Approaches

There are several approaches to take when implementing ERP software, including point-to-point, Enterprise Service Bus (ESB), APIs and more.

Indah said the best approach “depends on specific business needs. APIs offer flexibility. ESBs facilitate complex integrations. Point-to-point suits simpler scenarios, iPaaS supports cloud-based integrations and native solutions ensure seamless compatibility.”

Let’s take a closer look at some of these approaches.

Point-To-Point (P2P)

Bridge two apps together with custom coding skills.

Pros

• Improve Speed: Minimize manual data transfers and automate processes by directly merging with systems and using existing functionalities.
• Obtain Flexibility: Determine high-priority integrations for faster fusions to meet company and client needs.
• Save Money: Reduce licensing and maintenance fees. This option also saves you from external vendor dependency for more independent integration workflows.

Cons

• Boost Complexity: Since each integration requires attention and troubleshooting, maintenance, complexity and obstacles increase, taking a toll on your system’s overall performance.
• Lack of Centralization: P2P methods need an epicenter to monitor data maps, formats, integration processes and more, leading to more system errors.
• Require More Technical Expertise: You need experienced coders and IT professionals to perform P2P integrations for designs, implementations and maintenance.

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Enterprise Service Bus (ESB)

Enterprise Service Bus (ESB) streamlines the integration process with real-time data exchanges across separate systems.

Pros

• Improve Centralization: Add as many integrations as needed to the ESB for a better hub of workflows and operations, enabling greater scalability and management.
• Strengthen Transparency: Gain better workflow visibility to examine and resolve issues across several real-time platforms.

Cons

• Yield Low Performance: Since you’re operating several solutions simultaneously, you can overload the ESB. Modern ESBs with advanced infrastructures can combat sluggish performance.
• Require Additional Help for Upgrades: Updates may need cross-team collaboration and significant tests to ensure the hub acts flawlessly across all platforms.

Integration Platform as a Service (iPaaS)

iPaaS is a cloud-based integration method consisting of numerous connectors, APIs, coding and more.

Pros

• Save Money: Thanks to effective subscription methods and less demand for expensive hardware, iPaaS relieves your wallet.
• Obtain Scalability: Let this approach grow with your company as you add more tools, locations, employees and other assets.

Cons

• Require Training: Unless you have a tech-savvy IT team or plan on training your employees, this ERP integration strategy has complexities.
• Suffer Security Risks: Some users are concerned that iPaaS has problems safeguarding sensitive data with unauthorized access, data breaches and compliance adherence to HIPAA and other standards.

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Challenges

ERP integrations come with challenges, including cost, resistance to change, customizations and more.

Opre listed a few other hazards to be aware of during implementation.

Potential roadblocks like data security, system compatibility and vendor selection come down to thorough planning and due diligence. Robust security and access controls must be implemented, especially when handling sensitive customer information. Vendor selection should be driven by industry experience and integration capabilities, not just cost.”

Indah said overcoming data migration and system compatibility concerns “requires thorough planning, leveraging expert advice and choosing flexible, scalable ERP solutions.”

Time Management

Not allocating enough time to integrate your system or train workers on the new upgrades can cause issues.

Reo said an ERP system integration is “not once and done. It is an apparatus of continuous improvement.”

Indah said addressing time management, costs and other issues requires “clear communication of benefits, engagement with stakeholders, comprehensive training and phased implementation strategies to manage time and costs effectively.”

Costs

It can be costly to integrate your system.

Integrations can also cost you time, productivity and revenue because you will likely have to stop workflows for implementations.

Opre explained that “good partners can supplement internal capabilities cost-effectively. Gradual rollout and training preempt adoption issues.

Resistance To Change

Some employees fear the transformation of an ERP system integration.

A few remedies for resistance to change include planning and preparation, helpful training packages and continuous communication.

Reo said getting the company on the same page is the best way to manage and address concerns.

Implementing a vibrant new ERP system can be a waste of resources if there is no advance planning. The company should assess if they are outgrowing their current processes. This happens especially when they are simpler systems like QuickBooks. It is important to get all executives and all departments on the same page.”

Finding the Right Sellers

Ultimately, choosing the right vendor or reseller is vital to performing an effective ERP integration.

Opre said, “I’d certainly recommend working with vendors or partners with specialized integration experience versus trying to puzzle it out internally. Their knowledge can avoid pitfalls and optimize time and resources.”

Reo stated, “It is better to work with a vendor-neutral ERP consulting company. Companies that sell one system do not have an unbiased approach. If they have one tool in the shed, they will tell you to use it.”

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FAQs

What is an ERP system?

An enterprise resource planning (ERP) system is a program for all business sizes to streamline processes across different departments, such as accounting, manufacturing, marketing and more.

What is an ERP integration?

An ERP integration is when you merge modules from other ERP software into your current system for a centralized workflow.

What are some popular ERP integration examples?

• CRM
• BI
• BA
• Manufacturing
• Accounting
• HR management
• PLM

Why is ERP an integrated system?

ERPs have integrations so they can meet company department demands without the need to buy disparate platforms.

What are some ERP integration methods?

Some ERP integration methods include point-to-point, enterprise service bus (ESB) and Integration Platform as a Service (iPaaS).

Do robust ERP integration strategies always lead to successful integrations?

Our featured SMEs gave their thoughts on this question.

Opre said, “Yes, having a sound integration strategy is indispensable, but successful execution hinges on the quality of implementation. Strategy informs the roadmap, but practical planning and change management determine outcomes.”

Indah said a strong strategy is vital but doesn’t “guarantee success. It serves as a blueprint that must be executed with precision, requiring adaptability to address unforeseen challenges and ensuring the strategy remains aligned with evolving business needs.”

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Next Steps

Performing an ERP integration doesn’t have to be scary. A solid integration strategy and approach while communicating and training your employees saves stress.

A successful integration helps your business save money, boost productivity, improve decision making and more.

Ready to take the next step? Review our free comparison guide for a practical, unbiased look at different ERP solutions and their integrations.

How have ERP integrations helped your company workflows? What integrations are you looking for to streamline your company’s needs? Let us know in the comments!

SME Contributors

Kelly Indah is a tech expert and security analyst at Increditools. She has worked in the tech field for over a decade, primarily as a software developer and security analyst. She also has a Master’s in Computer Science and holds a Certified Information Systems Security Professional (CISSP) certification. Indah has hands-on experience with ERP systems across numerous roles and has completed certification courses. She was also featured in Forbes, CNET and MSN.

Len Reo is president of Attivo Group LLC, an ERP consulting service launched in 1992. Reo has a knack for solving business problems with best practices and the latest technologies. He started Attivo with the vision of achieving the highest level of operational effectiveness for small and mid-sized companies. He holds a BS in Accounting from Providence College and an MBA in Finance from Cal Poly Pomona. Reo has a vast knowledge of food and beverage, metal, medical device, plastics and other industries.

Maria Opre is a cybersecurity expert and senior analyst at EarthWeb. Opre holds a Master of Science degree in Risk Analysis from King’s College London. She is also a freelance writer who has collaborated with more than 90 brands and is a passionate advocate for innovation, sustainability and technology.