Enterprise Resource Planning (ERP) software suites are the gravitational centres of enterprise technologies. They have been so for decades and continually evolve to maintain relevance in a changing digital world.
Notable evolutions include SAP S/4HANA Cloud and Oracle Cloud ERP – both companies are giants in the ERP space and have successfully expanded from on-premise systems to cloud-based solutions, notes notes Warren van Wyk, Director and Co-Founder at PaySpace.
Such changes have kept ERPs in step with modern technology opportunities. However, they remain complex and all-encompassing systems, posing a challenge for organisations that want better integration between their ERPs and other digital services.
This situation is particularly relevant to cloud adoption. Cloud platforms are helping enterprises access potent services at better costs and with more control without requiring hefty capital expenditure. Despite ERPs adding cloud to their DNA, they are still fundamentally singular systems that emphasise centralisation. Cloud services, by their nature, are decentralised and distributed.
“Integrating an ERP and cloud services is not a simple task because they are fundamentally different,” Van Wyk says. “ERPs use modules to add extra functionality, while cloud platforms are not modules. They are independent software not designed to conveniently slot into an ERP environment. Both are complex in different ways–that’s why integration can be challenging.”
Consequently, when companies try to integrate cloud services with their ERP, they can run into serious and expensive problems.
What goes wrong with ERP integrations? It’s easy to create integrations that don’t produce value, fail to win over users, or add garbage information into the larger system. There are two pitfalls: preparation and data.
Preparation problems emerge when the integration parties neglect to do enough planning and inclusion. They underestimate ERP complexity, focus only on technical issues and ignore business alignment and expectations, stakeholders, and the system’s users. The central issue is not how to integrate an ERP and cloud service, but how the integration will deliver expected results and empower users.
Some issues relate to data. Most basic integrations pass a limited amount of information between systems. However, an ERP is a data ecosystem, and the services that integrate into it must feed that ecosystem. Yet the different systems do not use the same data formats, and integrations require extensive (and often bespoke) data testing and comparison to ensure that data streams are coherent and reliable.
The integration project needs to build a solid understanding of both platforms, what makes their data different, and how to close that gap. Many ERP integrations fail because of assumptions about data compatibility.
The difference between failure and success often depends on the integration partner, says van Wyk:
“When integrating with a complex system such as an ERP, things will go wrong. The biggest mistake is often to rely on an inexperienced partner or a partner that wants to follow a standard integration roadmap. Here’s the telltale sign: if you have meetings with them and they don’t ask you lots of uncomfortable questions, they are not on the right track. They have to do their homework.”
ERP projects generally have a reputation for being complex and risky. Integrating cloud platforms into an ERP creates even more such issues. But the benefits are immense, combining the stability of your ERP with the progress of cloud services. Success and failure depend on the details: preparation, collaboration, and data integrity. When an ERP integration project follows those principles, it becomes a win for everyone.