The Complete Guide on ERP System Integration

In 2020, the global Enterprise Resource Planning (ERP) market was estimated at $94.71 billion. By 2024 it expects to reach $97.15 billion.


ERP is not a novelty in the tech world and has already been used for several decades. Now it goes through a new era of market development. The adoption of ERP systems increased due to the growing popularity of cloud-based technologies and the mobile app market. The companies are investing in cloud computing and mobile development. This causes the demand for ERP systems that can be accessed from a smartphone.

Today, the ERP software industry has a tight connection with advanced technologies like IoT, AI, Big Data analytics. Their development generates new opportunities for ERP and advances its adoption by small and medium-sized companies.

By 2024, North America is going to hold the biggest cloud ERP market share. Its wide adoption explains this by new industries. The businesses that already use ERP switch from an on-premise system to a cloud-based one. Asian countries are also expected to face the highest growth due to a large number of small&medium companies adopting ERP solutions for their business management.

What is ERP Integration and Why Your Business Needs It?


Companies of all sizes use ERP software for automating different aspects of a business. An ERP system powers customer information, products, finance, logistics – everything. It acts as a centralized hub to manage critical parts of your business and keep the data from the different departments in one place.

This facilitates coordination of the work of different departments, increases security, regulates information access and sharing, and automates some routine processes.

Functions of ERP

ERP software is a complex system, and companies from different industries require different specific functionality. Yet, let’s consider some basic features useful for any company regardless of its business area.

  • Finance management & accounting

  • Storing the documents and templates

  • Tracking the company’s money flows

  • Automated calculation, making simple operations

  • Preparing financial reports


  • Procurement & inventory management

  • Keeping the lists of approved vendors and goods

  • Automated generation & sending the purchase orders

  • Shipment tracking


  • Manufacturing

  • Planning production management, tracking that the company has the necessary materials and production capacity

  • Real-time status of production of the different goods

  • Calculating the production time, supply-demand comparison, production planning


  • Order & Warehouse Management

  • Integration with warehouses, distribution centers, retail stores

  • Real-time tracking of order delivery to the customer

  • Preventing order losses

  • Planning the work according to the expected order volume

  • Cutting shipment expenses


  • Supply Chain Management

  • Tracking each stage in the supply chain: sub-suppliers & suppliers, manufacturers & distributors, retailers & customers

  • Managing returns, refunds, and replacement of goods

  • Integration with procurement, manufacturing, order & warehouse management


  • Customer Relationship Management (CRM)

  • Storage of customer & prospect information and communication & purchase history

  • Sales management, lead generation

  • Handling marketing campaigns


  • Workforce Management & Human Resources Management

  • Monitoring the workers’ schedule, task management

  • Overtime & KPI management, preparing salary & tax reports

  • Tracking time off, vacations, sick leaves

  • Employee document storage: performance review, job descriptions, benefits



ERP Market Overview

Traditional ERP systems are hosted on the company’s premises and are installed locally on the machines. During the last years, cloud technologies spread worldwide. The ERP industry got changed as well. Today, companies prefer creating ERP systems accessible over the internet. They also choose to host them at cloud providers to create their datacenters.

In 2019-2020, many organizations moved to the cloud, which is a common tendency among mid-sized enterprises. They used to run their businesses at the legacy ERP systems and are now moving to a cloud model. Although the conditions of different cloud providers are variable, the cloud ERP-system requires fewer implementation costs than on-premise ones.


Among the companies adopting a cloud ERP system, 86.3% preferred the SaaS model to the hosted one. It helps to cut the IT costs since the SaaS software is fully maintained and updated by the vendor. At the same time, the SaaS buyer has limited capabilities of customizing the software.


Pandemic Impact on the ERP Market

The COVID-19 pandemic has affected the majority of businesses. At the same time, travel restrictions and remote working increased the demand for IT services, especially cloud and SaaS-based collaboration, productivity, and ERP tools.

The pandemic forced the companies to shift to the remote working model. ERP systems played a vital role in establishing business consistency, remote access to internal systems, and real-time data management.


The Use of ERP in Different Industries

ERP software first appeared in the manufacturing industry in the 1990s. The first systems were used for managing accounting and human resources. Today, they can be fully customized and applied in different departments and industries. Let’s see the ERP system examples for four different industries.

Manufacturing

Manufacturing involves lots of complex processes united into a single system. A cloud-based ERP integration solution will connect different departments into a single logical system and will help to coordinate their work more efficiently:

  • Supply chain management, procurement control

  • Delivering the goods to the final customer

  • Monitoring the operations and equipment

Research conducted by Aberdeen Group states that 48% of manufacturing companies say that a business-specific software system helps increase company efficiency work.

Healthcare

According to a HIMSS Analytics report, the adoption of ERP software in the healthcare industry reached 38.4%. By 2025, the US healthcare market size is expected to reach $2.1 billion with 5.6% of GAGR growth. Except for common business benefits, like automation of routine works, ERP implementation is beneficial for the patients as well: