Looking for an integrated AP Automation Solution for your ERP System? This article looks at different ways to handle ERP integrations – but as your here, let us quickly mention Zahara. Our software is an all-in-one AP-automation solution that does Purchase to Pay.
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We think we’re a great fit for service-based businesses. In part because we’ve got a whole host of ‘off-the-shelf’ integrations including AP automation for Sage Intacct and Microsoft Business Central. We also have everything you need to process invoices effortlessly and control your buying process with budgets and approvals. Interested? Read on to find out more.
With more and more organisations looking to make the most of intelligent automation to improve their business, when it comes to Accounts Payable, ERP integration is an increasingly hot topic. Unfortunately, ERP Integrations can be costly and difficult, but, if done well, can bring untold benefits to a business.
Efficiency. Simplicity. Cost Savings and data accuracy increasing in orders of magnitude – all the results of effective AP Automation integration with your ERP or accounting system.
But what is an ERP integration? Why should you consider one? If you’re a bit lost in the woods on this one, we don’t blame you. It’s not easy to get to the bottom of how it all works, let alone how you should implement one or how much to spend doing so.
In true Zahara fashion, we’re out to simplify things. To do so, we’ve put together this guide. It explains just about everything you need to know about ERP integration, from the big questions to the small details – and we’ve kept the jargon to a minimum.
Shall we get stuck in?
In short:
What is ERP Integration?
ERP Integration is the process of collecting all your business data in one place.
How to integrate with ERP?
By implementing software such as Zahara’s AP Automation, that can pass information and data from different aspects of your business, and make it easily readable.
Why use ERP Integration?
With all your data in one place, you get a better picture of what’s actually happening in your business.
Let’s expand on that. This might get a little technical, but we’ll try to keep it simple.
What is ERP integration?
First, let’s start with those three letters. ERP stands for Enterprise Resource Planning. It’s basically about creating a bird’s-eye view of your business – a place from which you can see all the moving parts, all the data, all the nitty gritty things that are often bundled together and labelled ‘sources of truth’.
A good ERP-integrated system should act a bit like an octopus with each of its arms in a different silo of your data. Everything the arms read is fed back to a central point (the octopus’ brain – your ERP-integrated software) where the info can be digested and presented.
You might have one arm in your Automated AP system, another might be feeding in data from sales, while the others work from marketing or your Purchase Order Software.
How does ERP integration work?
What’s happening then? Well, you might be running accounts from Sage and another aspect of your business from MYOB, and because all this business software is designed in competition, they aren’t readily compatible.
Your ERP solution acts as a translator between these systems. It creates bridges or links between all the various (and previously incompatible) bits of software that you run your business from. Doing this allows them to communicate and share the info that you want to use as a source of truth.
If you want the technical details, it’s done through APIs or application programming interfaces. An API is a gateway for info to move in and out of a computer system, and a port that can be used to connect several bits of software.
We can use these gateways to make all your various systems compatible. You’ll often hear words like ‘middleware’ ‘intermediary’ or ‘integration platforms’ used in relation to the software that builds the bridges between APIs.
Once it’s up and running the ERP system will be shooting info between the bits of your business that were previously unlinked. giving you an up-to-date, real-time view of stocks, budgets, figures, or whatever else you might want it to show you.
Why do it?
At Zahara we’re pretty hot on the source of truth. It’s one of the major benefits of implementing one of our Accounts Payable or Invoice Processing solutions. It’s also the main reason why you should be considering ERP integration.
Imagine a vision of your business where you can see all your wasted money, avoid problematic double stock orders or trim your staff’s work time right down, freeing them up to focus on the kind of work that will save your company money: cost analysis, building business relationships and focusing on growth.
When you’re not ERP integrated, you’re wasting your time and resources. All that data you’re storing isn’t doing anything beneficial for you. It’s sitting in storage not showing you the whole picture of what’s happening in your business. What’s more, you’re opening yourself up to the kind of errors that doing things the old way (manually) can lead to.
We could talk for days on the subject, but we want to keep things simple, so here is a quick run through what an ERP-integrated system will do for you.
UP YOUR DATA MOBILITY– ERP systems will allow your employees to access information remotely – highly useful in today’s work-from-home economy.
SCALE EASILY – As your business grows, an ERP integrated system will allow you to incorporate new tech and tools to your processes seamlessly.
MAKE SMARTER DECISIONS – You can use the information that your ERP system is feeding you to make more informed decisions on the direction your business takes, be it as small-time as buying in new stationery, or as mega as a merger.
REMOVE HUMAN ERROR – Every time a human inputs data, there’s a risk of error. Scrapping the dark-age way of doing things means that your information will be more accurate
SAVE TIME – Time not spent manually inputting data can now be used for the kind of work that’s not going to drive your employees to desperation. Instead, they can be used for rewarding work and focusing on saving – and making – you money.
IMPROVE COMPETENCY – As your data is now stored in one handy place, your employees will only need to train on one piece of software. This means you can put more time into getting them competent and further reduce error.
DO AWAY WITH MANUAL DATA ENTRY – Ever felt the tedium of inputting figures and crunching numbers? No longer. With your ERP-integrated systems, data only needs inputting in one place. That frees everyone else to get on with something a little more, well… interesting.
How should I get started with ERP integration?
So, now you know how ERP integration will benefit your business. Maybe you’re even itching to get integrated. Here’s how to get stuck in.
An ERP integration can be done in-house if you have the technical knowledge. It can also be outsourced if you don’t. The integration could be business-wide, but on the other hand you might only want to integrate certain segments of your business. For example, you could choose to integrate accounts and sales, or solely integrate the systems in your invoicing process or payment runs.
The first step is to figure out exactly what parts of your business you want to integrate. Then you’ll need to choose a method of integration. Here’s what you need to know about the three main methods to getting your data integrated.
Types of ERP Integration
Integration Platform as a Service (iPaaS)
- This is the daddy of ERP integration methods. The real benefits here are that iPaaS is delivered as a service rather than a software – in other words you don’t have to maintain it yourself.
- It will also offer smoother integration between the kind of modern, cloud-based SAAS (Software as a Service) tech that so much of business is built around these days. Speed and simplicity will be yours once you’ve got the system running.
- If we haven’t driven the point home enough, iPaaS is the modern way of doing things. If you want to keep your business run on cutting-edge tech, this is where you’ll want to be doing it from.
- The drawback is that it will probably cost more than managing your own ESB or P2P system in-house. You may have to pay an up-front cost as well as a monthly subscription fee, and at times the software that’s designed to make your business data more visible might seem like it’s not so clear on where your return on investment is hiding.
- But if you’re looking to grow your business and you want to keep adding new bits of software without making your data swim through a maze of integration channels, iPaaS is probably the one for you. Consider it future proofing your business.
There are a couple more options…
Point-to-Point
- Point-to-point integration is ideal for small businesses with only a few platforms they want to connect up.
- It requires minimal support
- The thing is, though, that P2P relies on people to code the system in. This can be labour-intensive and costly if you don’t already have the know-how in house. It may also require maintenance.
Enterprise Service Bus (ESB)
- ESB is much like P2P but with the option of better vertical integration (the kind you do in-house).
- The drawback is that it’s not so good for including third-party businesses or clients (what would be referred to as horizontal integration).
- So why use it? Well, if you’re a small business it can be a relatively cheap way to link up the various bits of software.
- Like its P2P cousin, ESB will require a good bit of maintenance. Largely because it lacks the qualities of newer, cloud-based ERP software that make automation super simple.
Picking the right ERP integration plan
You’ve got a decision on your hands. Which method of integration is best for you? At Zahara, we reckon these are the six main points you should consider.
- HOW MUCH TO SPEND – This should be obvious. The first point of any business consideration is cost. You’ll be spending more in the long run with an iPaaS system, but if you’re running an ESB or P2P system you’ll have a large upfront cost and you’ll need to pay for someone to maintain it.
- WHAT YOU NEED TO INTEGRATE – You’ll want to think about what platforms you’re going to integrate, and how many. What kind of code do these systems run on now and if you’re not going with iPaaS, do you have the expertise to link them together?
- WILL IT BE SECURE? – When we make our software, security is always a big concern. It should be yours too. You’re likely going to have customer data stored – as well as sensitive business info – and you don’t want that being stolen.
- WHO’S RUNNING YOUR SOFTWARE? – If you’re doing this in-house, who will be managing the integration? Do you even have the resources in your IT department to handle the job?
- THE FUTURE – Don’t think solely about the present. What happens when your business grows to include new software and systems? Are these additions coming from inside the business or from third parties? Remember that software changes and technology develops. It’s unlikely that your ERP integration will work forever. In that case, how can you be adaptable?
How much does ERP integration cost?
This is something you’re no doubt wondering about, but we’re afraid there’s no straight answer. It really depends on the size of your business. A medium-sized firm could pay anything from £100,000 to £1 million depending on the complexity of the integration.
There can be all sorts of hidden costs involved in ERP integration. It’s very common for projects to run over budget.
Many people will tell you that a budget of 1-3% of your annual revenue would be a good place to start, though we would recommend budgeting more along the lines of 5% – that way there are less likely to be any nasty surprises (and your CFO isn’t going to blow a fuse if costs balloon).
Potential problems
Before we go any further, let it be said that ERP integrations are complex, messy projects and a lot can go wrong if you’re not organised. We’ll have more on getting your ducks in a row later, but for now: what problems should you watch out for?
SCOPE CREEP – This is the term often used to describe integration plans ballooning. It occurs when you don’t clearly outline what you want to achieve from the get-go. If you treat an ERP integration like impulse buying in the snack aisle of a supermarket your integration will become overly complex, with each layer of complexity adding extra costs.
LACK OF RESOURCES – Integrations will use up money and manpower. Some of your staff may be tied up with an integration for months or even years.
You might task a team with the sole job of completing the integration. You might have a team make space for the integration alongside their current workload. Either way, it’s extra work, so you’ll need the ability to take it on.
You’ll also need the money, and an emergency fund in case the integration runs over budget.
LACK OF TESTING – Many ERP integrations fail because the system wasn’t tested rigorously enough before it was put in. The issues might come from bad data or a lack of employee training, but the results are the same: your integration isn’t working.
Make sure you’ve ironed out all the creases before you go live with your integration.
A CULTURE RESISTANT TO CHANGE – Change isn’t easy… It sounds trite but it’s true. An ERP integration may change the way your whole business operates. Because of that, it’s likely to grind a few gears with employees who liked things the old way.
In our experience, employee resistance often comes when people feel rushed to learn the tangled ropes of new procedures. Give your employees plenty of time to get their teeth sunk into the workings of your new system.
A few things to do before you get started
Ok, so you’ve picked your ERP system and you’re ready to get integrated. Now for a few Zahara Best-Practise Tips before you begin implementing.
Get your ducks in a row
It’s important to have everything in house organised before you begin your ERP integration. A key thing to do here is to do a good spring cleaning, data wise. Clear out all those bits of data you don’t need. Seek out duplicates and delete. Prioritise data with integrity – the data that’s complete. Files that are corrupt or no longer have any use for your business can go.
Make sure everyone is on the same page
An ERP integration can be a big job. Be clear with your staff as it’s likely that your integration will impact their jobs. They might be using new software after the integration so make sure everyone is trained up and competent. A good tip here is to get your staff in the loop as early as possible. You don’t want them to be playing catch-up.
Think carefully
Take a long, hard look at your business and figure out which parts of your business will benefit most from an ERP integration. Start there and work your way out in diminishing orders of priority.
Think carefully before you begin about how much integration you need. Poor planning in the early stages will leave you with vague ambitions and that’s when your budget can start to swell.
It’s probably worth saying here that in future, choose software that will be easy to integrate with the software your business currently runs on. Zahara does this, bridging the gap between automation and your chosen finance platform with our very own SmartSync application.
Be secure
We mentioned this before, but we can’t stress this enough. As more and more businesses store data digitally, the risk of data theft is on the rise. Make sure your data is secure both when it’s being transmitted and when it’s at rest.
Zahara’s take
Undertaking a complete overhaul of the way your company handles data, or just integrating a few data-heavy departments? Whatever you’re looking for, ERP integration is the way things are going. The benefits are massive.
If you’re reading this, it’s likely because you know you’ve got a lot of data sloshing around and in ways that aren’t benefiting your business. With an ERP integration you’ll be making that data work for you.
Smoother business operations with less errors and a whole new view into the way your company runs will be yours. Trust us, our software is ERP integrated so we’ve had plenty of experience getting our heads around the benefits.
We’re compatible with most of the major accounting/business platforms. Take these systems for example…
- AP Automation for Sage 50
- AP Automation for Sage 200
- AP Automation for Sage Intacct
- AP Automation for Xero
- AP Automation for Business Central
- AP Automation for Quickbooks
- AP Automation for MYOB
- AP Automation for Zapier
- AP Automation for Pegasus Opera
- AP Automation for Exchequer
- AP Automation for Twinfield
… if you use any of the above, our software can integrate your data and give you all the benefits of ERP integration.
We often say that we’re ideal for service-based companies with big paper trails, but we’d happily discuss the benefits of Zahara software with anyone – Interested to hear more? Find out what we’re all about here.
