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What is an ERP and Why Do ERPs Get Integrated?

An Enterprise Resource Planning (ERP) system is a platform that acts as the centralized hub of your business’s data. It captures new sales, tracks inventory, and monitors financial transactions, and provides key data to decision-makers in most functions. When ERPs first started becoming popular in the 1960s, they were primarily used by manufacturing and warehouse teams to manage inventory. Now, that’s only a fraction of what modern ERPs can do within an organization.

ERPs have rapidly evolved over the last few decades, but business best practices have evolved even faster. In order to keep up with the pace of business, ERP integrations are critical. The practice of ERP integrations is growing; by connecting your ERP to other business systems within your organization, you can boost your analytical capabilities, optimize cross-functional processes, and even automate some of the more time-consuming tasks that your employees do regularly.

What is ERP Integration?

By definition, an ERP integration is the process of connecting one or more business systems with an existing ERP. There are thousands of ERPs available to business leaders, and there are even more business systems that can enhance the functionality of your ERP. If you have SAP as your ERP, but you use QuickBooks for most of your accounting tasks, an ERP integration would bring the two systems together to work in unison.

There are many ways to integrate software solutions with your ERP; having a thoughtful ERP integration strategy can make a world of difference in the overall architecture of your systems and IT infrastructure. For most new business systems, such as AP automation tools, invoice processing solutions, or even marketing platforms, offering a long list of built-in ERP integrations has become the norm.

Behind the scenes, when an ERP system integration happens, a technical expert may need to revamp the naming conventions in one or both systems so the data sets can match. By mapping one system to the next, you can create a one-stop shop for all your business data needs without keeping track of different data labels across multiple platforms.

Once you have a fully integrated ERP system that works together with a variety of other systems, your business will transform because of the new analytical capabilities and other features made possible by ERP integration.

The Primary Benefits of Integrating Your ERP with Other Products

Imagine if your main ERP could talk to QuickBooks, an AP automation solution, your marketing platform, and your warehouse ERP. With an ERP integration solution, you won’t have to verify data accuracy between each system or record new data in every system individually. Instead, these processes – and many others – happen without you lifting a finger. This is just one example; an ERP systems integration will bring a multitude of benefits to your organization.

Cross-Platform Data Flow

On average, businesses can tap into 400 different data sources at any time. Since data availability rapidly increases year-over-year, one of the main challenges from a data perspective is ensuring that every line item is usable, complete, and accurate. With so many different systems and solutions, manually verifying that every data source is giving the same information is impossible. But with properly integrated ERPs, you can rely on the two-way connection to break down data silos within your business and check that every platform is giving the correct information.

Better Efficiency & Operational Output

An integrated ERP system makes automation possible. There are plenty of solutions today that can automate everything from payroll processing to report creation, but without the right data available in the background, an automated process simply won’t work. You cannot get an accurate read on your AR turnover ratio if data discrepancies and disjointed systems are standing in the way. With ERP integrations, you can finally tap into new levels of productivity, resulting in more accurate and efficient outputs.

Advanced Reporting with Multi-Stream Dashboards

Any professional who has had to work with clunky Excel reports and multiple data sources knows how often files crash or refreshes fail because there are too many rows of detailed data being imported. With ERP systems integration, you can build reports that bring extensive data sets from multiple sources, refresh automatically, and even spit out dashboards for easy analysis. Automated reporting is something that was unlocked recently, don’t miss out on its business value.

Error Reduction

Humans make errors, but for computers, it’s rare. Before the world of ERP integration strategy, analysts spent an exorbitant amount of time reconciling systems, chasing down data errors, and manually tying out GL accounts on a monthly basis. When your systems are set up to work together and communicate, the presence of data discrepancies is minimal. Two-way communication channels allow the systems to talk to one another, verify cross-system data, and fix errors before they cause more issues.

Enhanced Workflows

Workflow automation – which is made possible by ERP integrations – increases data accuracy by 88%. Without the right infrastructure in the back end of your business, you can’t harness the power of process optimization and automation. ERP integrations enable enhanced workflows, and therefore, open your business up to new opportunities.

Examples of Integrated ERP Workflows

ERP integrations are a lot easier to understand when looking at specific examples. There are so many ways that organizations can optimize business processes with integrated ERPs. Some of our favorites are:

Connect Your ERP with Nanonets

Nanonets is an accounts payable automation platform. When connected to your ERP, it can provide deep insights around invoice processing, automate the vendor payment approval workflow, and even send an ACH, wire transfer, or EDI payment to the respective vendor.

Sync Orders Between Your ERP and Salesforce

When customers place an order, if your Customer Relationship Management (CRM) tool can communicate with your ERP, it can notify the production team of a new order, identify backlogs or delays that might happen, and even share order updates with the customer directly – all without human intervention.

Merge Workday Functionality with ERP Functionality

Workday is a human resources planning tool. When integrated with your ERP, it can embed open positions and resource constraints into your financial planning process.

Other Examples and Use Cases

Still looking for ways to make ERP integrations work for you? Check out these game-changing opportunities ahead of you:

  • Create a single-source-of-truth reporting dashboard.
  • Build customized Business Intelligence (BI) reports for organizational leadership.
  • Add new files to your content management system.
  • Manage projects and their budgets seamlessly.
  • Track customer behavior on your website to highlight cross-sell opportunities for your sales team.
  • Automate the monthly close process.
  • Build a self-service vendor or customer portal to check the status of their transaction.

What Integration Methods and Services Exist for Teams Today?

The ERP integration solution your business chooses may not be the same as the way your competitors go about it. There are many ways to integrate business systems with your ERPs.

Direct Integrations

One of the first ways ERP integrations were done was with the direct integration method. In this arrangement, your ERP and another business system are directly connected to one another. Sometimes, this can be the most complex approach because it requires a specific configuration that requires the integration developer to be intimately familiar with both data systems.

API Integrations

A common way to bring multiple systems together, Application Programming Interfaces (API) integrations rely on both systems’ API connections to open lines of communication between two systems. Since API integrations enable two-way communication, security is top of mind with this method.

Webhooks

Unlike two-way API connections, Webhooks only allow for one-way communication. These ERP integrations are trigger-based, meaning an action will trigger a behavior. For instance, if your accounts receivable team sends an invoice to a customer but doesn’t receive payment as the due date approaches, this method makes automated email reminders possible.

iPaaS

For Cloud-based integrations, an Integration Platform as a Service (iPaaS) is your best bet. Because the Cloud is so prominent in the business world today, the use of iPaaS will continue to grow.

Flat File or Manual CSV Uploads

Probably the least effective method, using flat files or manual CSV uploads can be helpful in a pinch. But remember, you’ll have to manually update these connections as new data becomes available.

What Solutions and Services are Available for Teams Seeking Help with ERP Integration?

Managing ERP integrations can be daunting, especially if your business is new to this method of bringing business systems together. If you’re still stuck on “What is an ERP integration?” there are many different services and solutions to help you along in the journey.

Webhooks

This simple ERP integration method is perfect for beginners. Since it’s a one-way, trigger-based communication channel, it’s easy to see if the integration was successful. If you use Webhooks to send an automated email for near-late invoice payments, and for some reason, it doesn’t send, you can work to pinpoint the issue and get a better understanding of the connection without putting other business systems in jeopardy.

Third-Party Tools

ERP integrations are such a hot topic that there are entire companies built around helping businesses set up and benefit from these integrations. Zapier, Workato, and IFTTT Integrations are a few companies that have centered their models around helping business leaders establish and optimize ERP integrations. If you need a lot of help in this arena, don’t hesitate to ask the experts!

ERP Service Providers

Sometimes, going straight to the source is the best option available. If you need help finalizing the integration between Salesforce and your ERP, reach out to your ERP service provider for support. The teams behind SAP, NetSuite, Syspro, and other ERPs want you to be able to optimize your experience with their platforms, and today, ERP integrations play a big role in that.

ERP Integration Platforms

Similar to third-party tools above, ERP integration platforms are tools designed specifically to integrate business platforms. Some business leaders choose to use an ERP integration platform if they have complex ERP integration needs.

Which Platforms Should You Integrate with Your ERP System?

If you want to have a connected business that isn’t trapped in data siloes and operating ineffectively, you need an ERP system integration strategy. Most platforms that store or process data are eligible to integrate with your ERPs. At the very least, prioritize these systems:

Your AP Automation Software

AP automation is one of the best ways to save time and reduce costs within your finance function. When you connect your AP automation software to your ERP, both platforms become more valuable. ERP integration enables automated invoice processing, three-way matching, seamless approval workflows, and even GL data corrections within your ERP. Consider these solutions:

  •  Nanonets
  • Tipalti
  • Stampli
  • BILL
  • SAP Concur
  • Sage Intacct
  • AvidXChange

Your CRM

Closely tracking customer behavior in your CRM is great, but pairing those insights with actual transaction details allows you to curate tailored customer experiences on an individual level. If you know that a customer got a form of outreach and then went on to buy 10 of the products advertised to them, you can enhance future advertising initiatives, gather information to build a better product in the future, and assess the financial impact of certain business decisions. Under this umbrella, you might have one of the following systems:

  • Salesforce
  • HubSpot
  • Insightly
  • Apollo
  • Sugar CRM
  • Accelo
  • Marketo

Your BI Platform

Business intelligence has come a long way in the last 5 years. No more making graphs and basic pie charts in Excel; with tools like PowerBI or Tableau working with your ERP, you’ll have cutting-edge, automated dashboards that provide actual value. Aside from PBI or Tableau, popular BI solutions are:

  • QlikView
  • Sisense
  • Looker
  • Embeddable
  • Trevor.io

Your Project Management Software

Even your project management software can integrate with whichever ERP your organization uses! Track issues, assign tasks, plan resources, and monitor project budgets with ease. You might use one or more of the following PM solutions:

  • Jira
  • Trello
  • Monday
  • Asana
  • Notion
  • Airtable

Key Integration Challenges to Be Aware Of

Like with any technology-related changes, ERP integrations come with their own set of challenges. With the right information and a top-notch team, you can avoid many of the potential roadblocks that come with integrating your business systems with your ERP. To know what to avoid, you have to know the possibilities. Some of the most common hiccups experienced in integration endeavors are:

  • Poor or outdated source systems causing data issues or faulty connections.
  • Lack of leadership buy-in killing the project before it even starts.
  • Selecting the wrong third-party tool for integrations.
  • Failed implementation efforts due to inexperienced project managers.
  • Financial constraints and limited resources curbing investment in the right tools.
  • Unhelpful customer support from either the ERP team or the target system team.
  • Security risks associated with adjusting your technology infrastructure.

We’ll be honest, there are many things that can go wrong when trying to integrate new systems with your ERP, but all of them are very manageable if you’re prepared. Continuing our honesty, there is a lot more that can go right in these situations, too! Don’t let the potential challenges steer you away from investing in the future of your business.

How to Integrate Your ERP with Nanonets

Since AP automation is considered an “easy win” to kickstart larger automation initiatives, connect Nanonets to your ERP to unlock the most revolutionary AP automation capabilities on the market. With our platform, you can rest easy knowing that invoices are being read and processed correctly, payments are being sent without issue, and supplier onboarding is only a 3-click process. Pair Nanonets with your ERP and you’ll be unstoppable. To do so, follow these steps:

  1. Identify your team’s integration needs and opportunities.
  2. Schedule a demo with our team.
  3. Sign up for Nanonets.
  4. Connect your ERP with our handy integrations guide.
  5. Get in touch with our support team for extra care.

Our integration possibilities don’t stop at your ERP, Webflow, Outlook, Asana, the Apple App Store, and Apollo are just the tip of the iceberg. For a full list of our available integrations, read this!

Integrate Your Systems; Integrate Your Business

For far too long, business verticals operated within their own silos. Marketing focused on marketing, finance focused on finance, and manufacturing focused on manufacturing. There wasn’t a lot of cross-functional collaboration because, with the traditional system infrastructure, cross-functional collaboration was clunky, time-consuming, and confusing for many employees.

Now, with a technology-based approach that provides the insight needed to understand other functions, businesses are more collaborative and cohesive than ever. ERP integrations may not solve all your problems, but they will start to break down walls within your organization and open your teams up to new ways of working together. As your systems become more intertwined, your diverse staff members will follow suit.