Direct Integration vs. Database Integration for ERP

By Sheila Shanker
Updated: August 15, 2011

An ERP system, also known as “Enterprise Resource Planning,” is a popular system within many industries. This type of software centralizes all information and processes, providing businesses with an integrated program using a common database. An ERP system uses modules that connect to each other, providing seamless and consistent results in real time or next to real time.

Integration is the key word when dealing with ERP systems. Many businesses have existing databases that they want to use within an ERP set up, especially in a manufacturing environment, where usually includes sophisticated plant floor equipment.

One way to integrate systems is to use a “direct integration” method, which connects the ERP system directly into the existing equipment. This set up requires vendors’ expertise not only on the new system, but also on existing product’s connectivity issues. Depending on the situation, direct integration may be very complex, too expensive or not worth it. In other cases, it could be simple, saving lots of money and time. If you have a modern system that you want to integrate with an ERP setup, most likely you can take advantage of a direct integration; however, if you have many systems using different platforms and logical backgrounds, you may not be able to use this option. This is a common problem when your existing programs are old and have parameters that are not compatible with the ERP modules.

To solve integration problems that cannot be resolved with the direct integration method, many firms use database integration, which uses staging tables that accumulates data of plant floor resources. Unlike the direct integration method, this setup requires the ERP system to read information in the tables. While this method can solve complex issues, it often requires the work of a systems integrator and is often more expensive.

There are firms and individuals who specialize in integrating systems, and they are often called on to solve issues during ERP installations. Many firms also purchase specific integrating programs to bridge differences between databases, and give the ERP system the ability to access data in various areas. If you want to integrate various disparate systems in one centralized location, most likely you will need to look at integration as a distinct step within the ERP implementation process.

ERP systems can help businesses by using one database throughout processes. For example, a manager’s information entered in the HR module can be used to approve inventory purchases in another module. Information from a plant module can be fed into an accounting system automatically or through the push of a button, saving lots of time and money in terms of manual entries.

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