As great as ERP suites are, organizations often have needs that outpace the core functions they offer. The good news is that integrating an ERP suite with other software or services is very common and tends to work out well (though not without some cost or inconvenience). These ERP bolt-ons or add-ons sometimes require additional hardware and additional IT skills to support and data may need to be synchronized to the data in your ERP system. Although the integration to outside services may not be as seamless as the integration that goes on among the various models inside your ERP system, it typically does work out well.
Common add-ons include:
- Payroll – Outside payroll services manage the details of pay calculations, deductions and tax filings.
- Finance – Integrations to bank statements, bank lockbox and tax services are common integrations and the integration routines are often built into the core ERP. Budgeting and forecasting may occur inside or outside of the ERP system. When done outside, the budgets are often brought into the ERP system through integration.
- CRM/Sales – CRM manages the front-end activity of interaction with prospects and customers for the winning of new sales orders. CRM systems often share data with ERP systems. CRM supports the front-end to get the order while ERP supports the back-end services to fulfill the order and collect cash. Other sales functionality that may integrate with ERP includes eCommerce, call center systems and customer portals.
- Operations – Integrations may be used to connect to CAD (computer-assisted drawing) and PLM (product lifecycle management) systems for engineering, logistics services and supplier portals.
In smaller ERP systems, add-ons are sometimes used for project management, time and expense entry, eRequisitions and employee expense reports.
Integration (in a Nutshell)
The key advantage of an ERP suite is the built-in integration it offers. Before ERP suites, a lot of time, money and effort went into the integration of various stand-alone systems. Today, perhaps the most common type of ERP integration is a simple flat file interface such as comma separated values (CSV) or a spreadsheet format (XLS). These integrations may be somewhat manual but they are simple and easy.
Another type of integration — automated integration — is often accomplished using an application’s API or application programming interface. In more complicated cases, data mapping, ETL (extract-transform-load) tools, scripting languages and simple SQL commands are used to transform data and format data for integration.
Pre-built connectors make it easier to integrate data between many pairs of data types. If needed, higher end tools for middleware broker services are available.
For users of ERP software, moving beyond the ERP core may become necessary. Add-ons can extend your ERP and make it more valuable by integrating your ERP system with additional data and services. If you would like help reaping greater business benefits from the software that you have already installed, talk to the independent ERP experts at Panorama Consulting today.
Blog post written by Greg Griffith, a project manager and business analyst at Panorama Consulting Solutions.