What is an ERP system integration?

The way I define ERP system integration is it’s the process of making the ERP software “work” with related applications or solutions in an automated fashion. Integrating ERP with related applications is typically done after you are live on your ERP, unless the integration is mission critical to the success of the initial implementation.

Most common ERP system integrations

I have seen a lot of integrations over the years, and even some ERP legacy system integrations, but these are the most popular and useful:

• CAD and ERP System Integration: These integrations basically synchronize a CAD (Computer Aided Design) system with the back-end data in the ERP. Products are designed in the CAD system so that they have a bill of material and routing; and instead of re-entering that information in the ERP, the integration automatically brings the data over, and creates the needed materials in the ERP.
• Shipping Carrier and ERP System Integration: If a company ships product via carriers like UPS or FedEx, this integration is helpful. The shipping information is sent to the carrier, and the carrier sends the freight charges, tracking number, etc. back to the ERP. All the information about the shipment is in the ERP system and can be used for customer communication purposes (for example, updating customers with ship dates and tracking numbers).
• Ecommerce and ERP System Integration: If a customer takes product orders via their website, an ERP integration will help them avoid having to re-key purchases in the ERP, which is time consuming and error-prone. The ecommerce and ERP systems will be synched in real time.
• CRM Solution and ERP System Integration: It is common for customers to have a best-of-breed CRM (Customer Relationship Management) solution that is not integrated with their ERP, largely because it can be complex to integrate the vast amount of data typically housed in CRMs. The data can include information on customers, prospects, pricing, quotes, orders, shipments, invoices, open balances, tasks, and follow-up activities. But a strong integration can be critically important to a successful sales process. Your CRM and ERP integration should involve discussions about which system is the “owner” of the data, and if the systems should be integrated in one direction or a bi-directional manner. Here's a Strategy for Selecting  a CRM Solution.
• Supply Chain Management/Accounts Payable Solution and ERP System Integration: Companies can keep their ERP up-to-date automatically with an integration that helps manage the purchase order and ship date process. An ERP system is only as good at the data that is in it, so these integrations make sure vendors acknowledge a purchase order and a product is going to ship on the promised date. The ERP, which is using that information to schedule production and make management decisions, is updated accordingly. Accounts payable automation is usually a part of these solutions as well, where the integration will automatically pay vendor invoices based on parameters you set.

Related: ERP Integration Considerations for Manufacturers

Related: Infor ERP Evaluation Criteria—Integration Capabilities

In conclusion

ERP system integrations are typically a fantastic way to get real return on investment and make users’ lives easier. Not to mention the value of having real-time and accurate data in the ERP!

Are you looking to get the most out of your ERP system? We would love to have a conversation with you—please feel free to drop us a line here.