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ERP system integration: benefits, challenges, and best practices

ERP system integration: benefits, challenges, and best practices

As Helen Keller once said, “Alone we can do so little, together we can do so much”, this statement is highly relevant in today’s business world. In order to gain a competitive edge over its adversaries, an enterprise has to ensure that different sectors of the business are synchronized efficiently. Doing so, a business can achieve a plethora of benefits such as having centralized data, reduction in human error, automated processes, and many more. An ERP system integration software will bring to life such a concept, which in fact, is being religiously used all over the business world today.   

To begin with, let us first understand what ERP or Enterprise Resource Planning is all about. An ERP is basically software that unites the different data derived from different sectors or departments of a business so as to create a single platform wherein every type of data related to the business is readily available, as and when required. Now that you understand what ERP does, you need to know about ERP integration. ERP Integration is nothing but simply synchronizing and connecting your company’s ERP software with business apps such as Electronic Data Interchange or EDI, Customer Relationship Management or CRM, eCommerce, analytics, and other data points that your enterprise deals with. In a nutshell, it can be said that ERP integration is all about connecting the various dots of a business enterprise, wherein the dots refer to the various business leverages. This helps to manage and track vital business data. For instance, CRM enables the firm to assess the customer’s requirements while an eCommerce department is concerned with accepting and dispatching orders. Not to mention why creating a link between these two departments is a prudent decision in such a case. 

Benefits of ERP Integration 

Let us now examine the copious advantages of having an ERP system integration software.

Centralized data 

Having all the necessary information gathered from different departments in one place is an extremely significant part of a business. This way, the employees do not have to be kept waiting for one specific department to ratify and pass on some information which it has to use. For instance, the accounting team of your enterprise doesn’t have to wait for the sales team to update the revenue record every month. Having a centralized data reduces workload and ensures quicker functioning.

Automated processes  

Needless to say, computer knowledge has surpassed manual labor in many ways. It has largely eradicated the risks of erroneous data entries, which has been a huge help to businesses all over the world.

Reduction in human error 

Thanks to the amount of automation involved, an ERP system integration software will reduce human error to a huge extent. Typing mistakes and wrongly sent emails are a common sight in every business which doesn’t make use of such software. You can have the better of your competitors by abating such doltish risks.

More emphasis on labor-oriented projects

Since the integration software will now take care of trifling tasks like data entry, your workforce will be available for other works that actually require human involvement. This increases the overall productivity of the firm and keeps the employee morale intact.

These are four major advantages of employing an ERP system integration software in your business. Others include customization, freedom to adapt, staying competitive, and having control. Having comprehensively discussed the benefits, let us now throw some light on the challenges faced or downsides of ERP Integration.

Challenges faced with ERP Integration 

Despite the exciting benefits that ERP Integration has to offer, there surely are a few deterrents involved as well. As per data, 60% of implementations of ERP done so far have failed. These figures are staggering and to ensure that your business doesn’t fall under the mercy of such hurdles, you should be well versed about such challenges involved, which we have thoroughly discussed under.

Need a reasonable strategy 

We believe without hesitation that no two ERP system integration software will offer you the exact benefits and functions. Since every software out there is dissimilar, you will be required to clearly understand the needs of your enterprise and then find an ERP solution that aligns with the goals of your business. For doing so, you should enlist the various needs of your business and then ensure that the software vendor you are in touch with clearly offers those covetous functions. If you fail to do so, chances are your business will have spent its money on buying an ERP software but couldn’t reap the benefits out of it.

Maintenance of the program 

Another challenge faced is incurring the costs so as to keep the software updated. Many elements are added and removed from time to time, which calls for an update in the software. 

Difficulty involving Legacy Applications

It is an arduous and expensive task to integrate some legacy applications which do not easily get integrated with other platforms. Some middleware software does provide solutions to such issues but then they can prove to be an expensive alternative. Your best bet in such a case is making use of cloud solutions that are able to integrate with various ERPs. This is an inexpensive, user friendly, and more flexible option for integrating such legacy applications.

Best practices involved 

The best practices involved while integrating an ERP system would definitely take into account the functions of hr software and payroll software. This is the key to realizing a business’s fullest potential. The best practices involve the following steps.

Working on a Business Case 

Like an elite businessman, you will be required to carefully examine whether or not integration is required, the pros and cons involved, and how much to spend on it. Analyzing such details in an efficient manner will be fruitful to your organization in unimaginable ways. People mostly resort to the use of integration whenever they feel like it but a good businessman would first assess the situation and then act accordingly. A detailed business update case should clearly outline several things such as benefits of the integration, which department is going to be affected, time and money required, etc. Only after doing so can you make a call.

Involving the right people 

Even the most seemingly trivial ERP integrations could prove to be convoluted tasks for the most erudite employees out there. In such a case you’ll need to shake hands with a third party, one which is renowned for excelling at such tasks. You’ll most probably be needing a good team of people who have good knowledge of your integration tool.

Planning the integration points

Under this, you will have to plan to achieve your desired outcome. A few things need to be kept in mind such as the source of data, the target of data, whether the data is one-way or bi-directional, and the frequency of integration required.

Now that you’ve probably decided what data you wish to integrate, it is prudent to once audit the entire data to ensure that it is usable and relevant. Upon doing so, you would have to learn how your network is going to be affected while the data gets moved system to system. Long story short, these best practices highly encourage you to rigorously plan and study your integration before executing it. 

HR Software, Payroll Software, and Performance Management System

It is necessary for you to learn about the three aforementioned topics since they are closely related to ERP integration. Payroll and Human Resources (or HR) software basically provide you solutions that take care of the payroll processing and talent management aspects of your business respectively. As a result of this, your workforce can now focus on other work without having to worry about matters related to HR. One of the biggest benefits of such software is that amidst your tedious work, it reminds you to pay your employees on time, which in turn boosts the morale of your workforce. Keeping a record of the compensation that has to be paid to your employees is also done by payroll and Human Resources software. This software is also beneficial for the employees since they come along with some good features which allow them to estimate their pay as well. The performance management system basically involves assessing the job performance of the employees, collaborating with other employees, etc. Upon assessing such information, the managers are now able to easily communicate with the employees, asking them what areas they need improvement in. This helps to strengthen the employer-employee relationship which will be highly beneficial to your firm in the long run. Now that we have comprehensively discussed ERP system integration and how the software will help you do so, we are confident that you are equipped with the knowledge necessary for integrating various departments of your firm. All you need to keep in mind is that you should plan out the needs of your firm, get in touch with the right people, choose the most suitable ERP software and get going.

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