ERP data integration can be a serious challenge, particularly as ERP's domain encompasses the full gamut of manufacturing applications. ERP systems now have the potential to integrate and manage processes and data flow across all areas of a manufacturing organization, but only if the data is current, consistent and synchronized, experts say.
The ideal, or at least simplest, solution is to go with an ERP solution that provides a full set of manufacturing application modules that are embedded in the platform. Smaller companies with limited IT resources tend to go that route, according to Holger Kisker, a senior analyst at Forrester Research for software vendor strategy.
However, larger enterprises, particularly those with complex IT architectures and/or in heavily regulated industries, want the greater functionality and richer feature set of specialized, standalone third-party applications.
Whether applications are separate or embedded in the ERP platform, they need to be synchronized with and be able to regularly update ERP's master database, which contains basic information about product lines, customers and key resources.
However, companies can choose to have standalone application modules, such as CRM and SCM, share data directly with each other, rather than having everything go through the ERP system. Although directly connecting applications can be a more complicated management task, Kisker said, it opens the way to dynamic data sharing that can result in faster and more effective decision-making during the product lifecycle.
"SCM, for example, would know the lowest cost shipping route," said Kisker, "but CRM knows which important customers should be delivered to first."
Some ERP vendors provide data integration and synchronization services to facilitate the migration of data from other systems. Through the application of pre-defined business rules, the process of cleansing the data before it is loaded can be streamlined.
Still, extracting, transforming and loading (ETL) data can be a time-consuming task, particularly for large companies with legacy manufacturing systems that often reside on mainframes and house inconsistent versions of data. Companies must decide whether it's cost-effective to load everything into ERP or maintain separate application-specific databases with links to ERP.
Product lifestyle management (PLM), supply chain management (SCM) and manufacturing execution system (MES) vendors provide connections to help administrators transfer data from their applications to an ERP system, in usable form.
"Such links tend to work best when transferring a limited number of fields, under certain conditions," said Bill Swanton, a vice president at AMR Research who specializes in helping Fortune 1000 companies expand the value they receive from their ERP investments. In addition, automated transfer of a broad range of data can require a great deal of initial setup and tweaking.
Indeed, some experts believe that merging and integrating data between systems is often overkill. For example, if a salesperson needs to look at outstanding orders for a given customer, they can simply call up the information based on the customer ID with a Web-based querying tool without "all that complex movement and copying between your CRM and ERP systems," said Swanton.
"When it's just a matter of displaying data on a screen, business intelligence tools, mashups, or simple querying tools are perfectly adequate."
About the author: Elisabeth Horwitt is a freelance journalist who has covered business IT trends, issues and technologies for over twenty-five years. She is based in Waban, MA.