The common phrase, “United we stand, divided we fall,” applies to more than just war movies and superhero TV shows. It’s also a great example of why ERP integration is key to running a successful business. By putting together multiple “best of breed” applications to build or fortify a near-custom ERP solution, your business can automate processes and increase revenue. So, what exactly is ERP software and what does integration mean in this context? In this article, we will explore these basic definitions along with looking at some of the benefits, pitfalls and challenges involved in ERP system integrations.
What Is ERP and What Is Integration?
Enterprise resource planning software is a tool that is commonly used by businesses of all sizes to streamline and automate business functions. This could include components such as accounting, distribution and human resources. One of the main appeals of ERP software is that it operates as a centralized data hub for a variety of workflows, which makes it easier to share data insights across departments. ERP systems also automate processes across departments that typically need to be completed manually. For example, an ERP could take information from a sales order and automatically send its relevant financial data to your company’s accounting program.
Integration is a way of connecting ERP software to other systems to ensure that consistent information is shared while also automating workflows. It is useful because it affects relationships between ERP software and other vendor systems so that businesses can customize and select the specific tools they want to have in their solutions. The most extreme form of this is called postmodern ERP strategy. This method is a new way of developing a personalized ERP system for a company that uses solutions from various vendors to essentially build a completely unique ERP program.
Even if you go with a more traditional ERP strategy, implementation can assist in the streamlining of processes by improving the communication between various modules. For example, it is incredibly time-consuming to take data generated from your ERP and input it into a different program. Integration can streamline this process and reduce the potential for human error to occur. Human error can have horrible consequences for your business. A 2016 study found that 57% of sampled prescriptions had typos. For your business, a typo might not be life or death, but it can create inefficiency.
The bigger your business gets and the more advanced your software solutions become, the more likely it is that inconsistent data and clunky workarounds will become part of your day-to-day business. ERP software integration is critical in reducing the potential for inefficient workflows through its centralization of information. It also often leads to increased collaboration among employees and improved transparency.
Benefits of ERP Integration
Now that we have a basic understanding of ERP integration and what exactly it does, we can go into more detail. Let’s examine some of the key benefits associated with ERP system integration and how they could positively influence your company’s bottom line.
Having all of your data in one accessible location can significantly improve internal workflows. For example, your accounting team wouldn’t have to reach out to the sales team every month for an updated record of revenue made. Ultimately, having data available in a centralized location helps to facilitate business processes and reduces the amount of time that employees spend waiting on people in different departments to provide them with information necessary to complete important tasks.
The more automation, the better. ERP integrations can streamline processes across various departments and workflows. This reduces the amount of manual input required and the time that it takes for tasks to be completed.
Higher visualization of the tasks and workflows of your business goes hand-in-hand with data centralization. Additionally, integration with a tool such as project management software can allow employees to see what their peers are working on. This can be beneficial when requesting feedback from a fellow employee or assigning a priority level to tasks. For example, if you need a standard report from a manager, but see that they are working on a direct request from the CEO, you might downgrade the severity level of your inquiry accordingly.
Reduction in human error
Because ERP system integration can increase the amount of automation that occurs along business workflows, there is an opportunity to reduce human error. Typos and emails sent to the wrong client can negatively impact your business, so automation is a huge benefit. The amount of human error that occurs every day is incredible, so a reduction in this rate could give your company a competitive edge.
More time for labor-intensive projects
When you reduce the amount of time spent on tasks such as data entry, you free up employee time for other duties. Because of the wide range of processes that can be automated, your employees will now have more time for essential tasks that require human input, therefore improving productivity.