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ERP consolidation and integration

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ERP system integration poses ongoing challenges

Despite improvements on the technical front, ERP system integration faces new obstacles, such as cloud and mobility.

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There's good news and bad news on the ERP system integration front, according to industry experts. While far less of a business obstacle today thanks to emerging technologies and maturing platforms, ERP integration remains an evergreen challenge for IT organizations as they advance enterprise systems to support a plethora of next-generation capabilities, including the cloud, mobility and new data types.

Historically, companies have struggled with nailing down the right integration architecture for syncing an ERP backbone with other best-of-breed (BoB) enterprise systems, such as customer relationship management (CRM) or supply chain management -- or even trying to create synergies between disparate ERP platforms. However, experts say many of the complexities surrounding point-to-point integrations between ERP and BoB systems have been mitigated thanks to technologies such as Web services, and because ERP vendors are fine-tuning their platforms and integration strategies to better support a heterogeneous environment.

"If you do integration right and make use of underlying technologies like service-oriented architecture, Web services and using standard business objects, it makes it much easier to integrate than it ever used to be," said Cindy Jutras, president of Mint Jutras, a research and advisory firm specializing in enterprise applications.

Despite the progress, ERP system integration is still far from being a slam dunk. The growing requirement to integrate not just with internal applications, but with the core systems of key suppliers and customers has upped the ante, experts say, and many manufacturers still have to contend with syncing up with legacy systems that tax custom integrations as the core ERP system is upgraded with new functionality over time.

Complexity around integration is also tied to the growing requirement to sync ERP not just to one or two primary systems, but to an array of sources, typically from multiple vendors and each with different upgrade schedules, according to Christian Hestermann, research director for ERP at Stamford, Conn.-based Gartner Inc. "The more connections and integrations, the more complex the whole picture is," Hestermann explained. "We're talking supply chain systems, product lifecycle management, CRM-- all of these systems follow individual roadmaps in terms of when upgrades need to be deployed."

ERP system integration gets cloudy

One of the newer wrinkles surrounding ERP system integration is cloud services. On one hand, the cloud delivery model makes it easier for companies to get up and running on core applications like ERP and CRM more quickly. On the other hand, basic integration can be more straightforward, especially if the vendor incorporates specific pre-built connections as part of their overall service offering simply by supporting standard Web services, experts said.

It was ease of deployment and integration that led The Lean Companies to pick Epicor's Express cloud-based ERP offering when it decided to replace a legacy warehouse distribution system as part of a move to standardize three divisions on a common platform. "Cloud is where the future is going, certainly for smaller companies," said Terry Edgar, president and CEO of The Lean Companies, a contract manufacturer of wire and cable harnesses as well as a provider of logistics services. "That's driven by the fact that it's more cost-effective from the perspective of personnel and equipment purchases."

Edgar anticipated that The Lean Companies' long-term integration needs will be served more cost effectively with the cloud approach, as the delivery paradigm creates an easier path when it comes to upgrades and patches. "The good news is when software upgrades happen you have to make them," he said. "In the past, when software revisions came up, it was a significant task to go and retest all the integration points and make sure you were pulling data correctly."

While the cloud closes the door on some integration challenges, it is also an entrée into other related issues. Many companies have a standardized ERP system deployed at the corporate level while various divisions turn to a cloud-based approach for CRM or other complementary applications -- an easier approach that doesn't require bringing in IT, noted Josh Greenbaum, principal at the Enterprise Applications Consulting firm. The problem then becomes trying to integrate those cloud-based silos with the existing on-premises enterprise systems.

"A lot of companies woke up after the Software as a Service binge and found themselves with cloud-based HR or a Salesforce cloud that can't be easily integrated to the back office," he said. "It's an interesting new dynamic in integration when you're trying to connect the cloud and on-premises and you need to do it without the kind of command and control that exists in the data center [where] everything is under one roof. The irony of the cloud is that it's easy to deploy and provision, but it doesn't integrate out of the box."

Mixing mobile with ERP integration

The rise of the industrial Internet is having another impact on ERP integration, Greenbaum noted. As companies start to gather data from sensors on plant floor equipment or on shipping pallets, for example, that data needs to be integrated with traditional ERP data, which is a completely different animal. "It goes from being a transactional integration to an analytical one, and you have to take into account very different kinds of data and different notions of what is real time," he explained.

Mobility poses another greenfield integration area, according to Jutras. "Whether on a business trip or at the soccer field, company execs are going to want to get answers immediately," she said. "That means you have to take the mobile device into account and maybe run a smaller, purpose-built app [that] connects back to the data supplied by ERP."

Despite all the progress that's been made, Greenbaum stressed that there is still no magic bullet for ERP integration. "At the end of the day, you've got to plan this with IT and line of business sitting down at the table from the get-go," he said. "I've been giving that same advice for 25 years."

Follow SearchManufacturingERP on Twitter @ManufacturingTT.

Next Steps

Understand the limits of ERP integration

Read about risks in cloud ERP integration

Learn about ERP integration tools

This was first published in September 2013

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Essential Guide

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