ERP Integration Challenges

By Lori Shepherd
Updated: September 21, 2011

ERP Integration Challenges

There’s no doubt that ERP integration presents wonderful benefits, however, getting around the challenges of integrating ERP can certainly be daunting. Knowing what to expect is an important element of quickly realizing your ERP goals.

Keep in mind that a primary reason for using an ERP is its ability to integrate data. For businesses, having a single definition for all information allows management to easily view the status of the organization and make decisions on up-to-the-minute data. A single source of information also means reduction of duplicate data entry. Information enters the system once from the appropriate source and is immediately available to everyone. Still the challenges of integration are real.

Specifically, organizations face the challenges of integrating various functional ERP modules, with integrating with other e-business software applications, and with integration with legacy systems. And so, it would seem that successful ERP implementation is directly connected with the success of ERP integration but also understanding the nuances behind these challenges so as to overcome them with ease.

For example, the challenge of integrating various functional modules exists because packaged ERP software comprises a variety of functional modules (production planning, inventory control, financial and HR); organizations typically install modules from the same ERP vendors of the initial ERP implementation. However, not all companies purchase ERP modules from a single vendor.
The challenge of integrating with E-business practice exists considering the combination of strategies, technologies and processes to electronically coordinate both internal and external business processes, and manage enterprise-wide resources. To get the most out of ERP systems, ERP should be tightly integrated with other e-business software—Supply Chain systems, CRM, knowledge management, B2B exchange and ecommerce storefront on the Internet.

Finally, the challenge of legacy systems occurs considering accumulated vast amount of data vital to the survival, operations, and expansion of corporations and non-profit organizations. Integration of ERP systems with legacy systems is more complex than the integration of ERP modules and Integration of e-business Applications. It routinely requires the installation of third-party interface software for the communication between ERP software systems and legacy system.

Understanding the genesis of ERP is crucial to realizing how these systems evolved much more into a methodology and design architecture. For example 20 years ago there were stand-alone applications which were merged into integrated suites called ERP. While some merely shared a database but not data definitions, others truly integrated by re-designing the applications to share a single definition for every object or data element in the system.
 

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