What Is ERP Integration and How Does It Work?

By Carole Achramowicz, Senior Director of Product Marketing

The current economic environment demands that companies deliver exceptional customer experiences throughout the customer lifecycle. Fifty-nine percent of consumers say that they now place more importance on the customer experience when choosing the brand from which to buy.¹ Enterprise Resource Planning (ERP) systems play a critical role in providing the data needed to deliver those customer experiences. Traditionally used as back-office systems handling accounting and financial information, ERP systems must now connect with customer-facing systems such as Customer Relationship Management (CRM), e-commerce, customer service, and many others to enable a seamless customer journey. 

Companies need a modern approach to ERP integration that overcomes challenges and puts them on the path to deliver exceptional customer experiences.

What Is ERP?

Enterprise Resource Planning is a business management software that helps automate a company’s essential business functions. For many organizations, ERP is the system of record that collects inputs from departments across the organization, including accounting, manufacturing, supply chain, sales, marketing, and more, to ensure there is a single source of the truth for its data.  

The term ERP system is often used synonymously with the financial system (accounting, invoicing, financial reporting). Eighty-nine percent of the respondents in a survey considered accounting the most critical ERP function.² But vendors with integrated business software also offer many other modules, such as business intelligence (BI), customer relationship management (CRM), omnichannel commerce, material requirements planning (MRP), supply chain management (SCM), and human resource planning (HRP). 

Since an ERP system handles many customer-facing activities such as orders, billing, fulfillment, and shipping, creating exceptional customer experiences requires connecting the ERP to other applications and data sources a business uses.  

What Is ERP Integration?

Simply put, ERP integration connects and synchronizes ERP software to other applications and data sources. ERP software integration gives you a unified view of information from different systems in real time, whether the data originates in the ERP or other systems. The importance of integration with ERP is that it increases the efficiency of business processes and workflows and increases collaboration between teams. 

Challenges Faced without ERP Integration

In today’s current economic climate, if your company does not have an ERP system integration, you face numerous challenges that stifle your ability to compete.

Data Silos

Data silos prevent companies from getting the most out of their systems. ERP systems that were implemented years ago might sit in legacy and on-premises data silos, while newer applications reside in the cloud. Disparate data silos lead to redundancy, inefficiency, and inaccurate data.

Slow Manual Processes

Without an ERP system integration, manual processes must move information between the ERP and other systems. For example, when a customer places an order, it goes into a CRM. If the order must be manually entered into the ERP system, the workforce’s burden increases and operational efficiency is hampered. The workforce required to do the manual processes are prevented from performing higher value work.

Lack of Real-Time and Accurate Data

Disconnected systems mean manual data updates, which create a delay in information exchange across the customer lifecycle. While manually processing a new customer order, the rest of the company does not have access to the order in real time. Manufacturing might build inventory for a different product than what was ordered. The customer will not receive the status of the order. Accounting won’t send an invoice to the customer or book revenue. Everything waits until the order is processed manually.

Inability to Achieve Strategic Customer Experience Initiatives

Integration is imperative if businesses are to deliver on customer experience initiatives. An ERP system contains crucial financial, product, fulfillment, and other customer-related information. Without an integrated view of customers, companies like Amazon could not make in-the-moment recommendations on products to buy or give real-time status when the product arrives at your door. 

Some companies custom-built integrations in the past which tended to be point-to-point integrations with no reusable code. These ERP legacy system integrations require changes or replacement to extend them to add special features or to connect more systems. Companies cannot achieve their strategic customer experience initiatives until legacy custom-coded integrations are made extensible.

Types of ERP Integrations 

The role of ERP systems in system integration is crucial as they hold customer, product, and sales order data. The types of ERP integrations that optimize business workflows are numerous; here are a few key ones to consider: 

CRM-ERP Integration: Connecting Demand with Supply

Sales focuses on increasing revenue by acquiring, satisfying, upselling, and cross-selling customers. The CRM system holds the customer contact and interaction information, but it must connect to an ERP for order management, fulfillment, and shipping. The CRM with the largest market share is Salesforce Sales Cloud, but there are many others, including Adobe, Microsoft Dynamics, SAP, and SugarCRM. Some ERP systems include CRM modules. 

E-Commerce-ERP Integration: Making Front-End Data Available

The COVID-19 pandemic accelerated the move to e-commerce as companies were forced to shift from in-person to contactless sales and services overnight. E-commerce platforms provide customer browsing, ordering, and payment capabilities and are often the first contact with the customer. The e-commerce platform must integrate with the ERP to manage the order fulfillment process — checking or updating inventory and shipping the product. There are many e-commerce platforms, including Amazon, BigCommerce, Magento, Shopify, and others.

ERP-ERP Integration: Ensuring Accurate Financial Data

Companies may have multiple ERP systems, whether due to acquisitions, mergers, or departmental preferences. These ERP systems need to be connected to each other to work as integrated ERP systems to create a consistent and accurate view of customer and product data. The ERP systems used by many companies include Epicor, Microsoft Dynamics 365, Oracle NetSuite, SAP S/4 HANA, Sage, Workday Financials, and others.

Customer Service-ERP Integration: Tracking Support via Customer Service Systems

Excellent customer service boosts customer satisfaction, reduces churn, and responds to customer needs faster and intelligently. A broad range of applications handle customer service, support, and field service. Customer service software handles omnichannel capabilities, self-service capabilities, and proactive interactions through predictive analytics and AI. Customer support software often called IT Service Management (ITSM), manages IT desk and incident request management. Field service software manages warranty and contracts, returns and repairs, maintenance, and scheduling field service work. To ensure seamless customer interactions, companies must integrate all these customer service applications with the ERP. Popular customer service platforms include BMC, Cherwell, Jira, Salesforce Service Cloud, Oracle Service, ServiceNow, ServiceMax, Zendesk, and others. 

Benefits of ERP Integration

ERP system integration enables companies to make the most of their data and deliver exceptional customer experiences. Here are the specific benefits companies gain.

Drive Greater Efficiencies

Processing orders can be slowed down by the fact that sales-related documents are scattered in multiple repositories. By automating the processes to pull documents together from different systems, manufacturers can reduce bottlenecks in the order-to-cash workstream, and reduce time delays in the fulfillment, delivery, and invoicing process. Access to all customer and product information in one digital workflow reduces bottlenecks in order-to-cash and improves order turnaround time.

Personalize Customer Experiences

ERP integrations help your company to get intelligent insights on what a customer needs or might want. If you can access all that data sitting in the back-office, you can create uniquely tailored offerings for your customers. But the right technology is needed to combine this data with additional online, offline, and third-party sources to create a single, dynamic customer profile. Then you can use this single view of the customer and apply AI to recommend best-fit messaging and offers across all your digital commerce interactions. 

Optimize the Value Chain

Integration makes better use of data throughout your company’s value chain. A complete view of customer data enables manufacturers to better predict customer demand, quickly adjust to changes in the marketplace, accelerate the engineer-to-order process, and communicate more effectively. 

ERP Integration Tools: How to Integrate ERP with Other Systems

Integration Platform as a Service (iPaaS)

While there are older ERP integration methods such as point-to-point integration with custom code, Integration Platform as a Service (iPaaS) solutions are designed to make integrations easier and address ERP integration challenges. iPaaS solutions are typically built on the cloud and are used for application integration, data integration, B2B ecosystem integration, on-premises integration, API publishing, and other scenarios. iPaaS solutions are generally based on an API integration platform that provides connectivity, workflow design, data mapping and transformation, and an integration lifecycle. Most connect to the more commonly used ERPs, CRMs, customer service applications, or proprietary systems a company may have. 

There are a range of iPaaS solutions with a broad spectrum of capabilities, but there are some trade-offs in capabilities. Some iPaaS solutions offer pre-built components to connect applications and automate business processes, while others require IT to create the integrations themselves. iPaaS solutions with pre-built components simplify common integrations but may not provide the capability to handle more complex integrations. 

Jitterbit Customer Experience API360 (CX API360) – The Modern iPaaS Solution for Enterprises

Jitterbit’s iPaaS solution offers both the ease of use in common integrations and the depth to address complex integrations. Jitterbit’s Customer Experience API360 is a solution designed to accelerate the automation of popular business processes across the entire customer lifecycle. The CX API360 methodology, built on Jitterbit’s industry-leading API360 framework, leverages best practices from thousands of integrations by Jitterbit customers and partners.

CX API360 comes with a complete lifecycle APIM tool and comes with these capabilities. 

• Single Platform for Integration
  

  CX API360 is based on Jitterbit’s API Integration Platform, which has the robust capabilities to design, templatize, deploy, and manage integrations.

• Out-of-the-Box Application Connectors, Integration Recipes, and Process Templates
  

  Application connectors provide pre-built and reusable connectivity to a specific endpoint, such as Salesforce or NetSuite. Integration recipes are single, pre-built integrations that move data in one direction between like objects across two applications or systems (e.g., sync contacts between Salesforce and SAP). Process templates are pre-built use cases that accelerate the execution of specific business processes (e.g., Opportunity-to-Order for Salesforce and NetSuite) requiring connectivity to multiple objects and fields between the source and target application.

• Intuitive Graphical Interface for Customizing Complex Integrations
  

  For most companies, pre-built components can handle the most common aspects of integrations. But for more complex integrations, customization may be needed for transformations or other business logic. CX API360 offers the best of both worlds; pre-built components for the most common integrations and a drag and drop intuitive graphical interface to create reusable code. IT resources are minimized, and the reusable code is extensible as the company grows.

• API Management
  

  API Management enables a company to create, run, secure, manage, and analyze all APIs and microservices using a single platform. APIs can access any application or data source either in the cloud or behind the firewall, any time.

  The CX API360 toolkit is proven to speed up the automation of business processes by up to 80%.

Customer Success with Jitterbit ERP Integration 

Oracle NetSuite is a popular cloud ERP used for accounting and financial tasks. But to get the most out of NetSuite, companies need it to connect to other applications and data sources – sales, marketing, logistics, procurement, and more. Integration is the key to creating an end-to-end 360-degree view of your customers.

Jitterbit’s customers across industries have integrated ERPs with other systems and have been able to:

• Get sophisticated customer insights
• Automate and accelerate operations

Jitterbit’s customers integrated NetSuite ERP with CRMs, third-party systems, and EDI to grow their companies, across verticals:

• Technology companies have integrated with CRM systems to synchronize customer and billing data to replace expensive manual processes and provide a complete understanding of the customer.
• Media and publishing companies have connected to internal customer databases and CRMs, making customer usage data available and offering new insights into customer behavior.
• Retail companies have integrated with EDI, completing the last mile of integration between EDI and retail customers.

Learn more about Jitterbit’s Customer Experience API360 solution for NetSuite Integration.

The Takeaway: ERP Integration Delivers Exceptional Customer Experiences

Enterprise Resource Planning systems play a critical role in the customer lifecycle. ERP systems must be connected to customer-facing systems and other applications and data sources to provide a 360-degree view of the customer. Using an iPaaS solution offers a single platform for integration, pre-built components, and extensible code. Jitterbit’s CX API360 is a modern iPaaS that provides a powerful toolset with pre-built templates for the most common application integrations and the ability to build customizations for more complex integration needs. With Jitterbit CX API360, ERP integration enables companies to deliver exceptional customer experiences throughout the customer journey.

Download the ERP integration customer success eBook to learn about successful ERP integrations across industries.

eBook: Customer Successes in ERP Integrations

¹ CX Trends Challenges Innovations, August 2020 Market Study, CCW. August 2020.

² Gheorghiu, Gabriel. The ERP Buyer’s Profile for Growing Companies. SelectHub. 2018.