Adopting Leading Edge Integration During Your ERP Migration
Posted by Mike Canniff on August 11, 2011
In my previous post “ERP Migration to the Cloud”, I introduced the general trend of companies moving “up the stack” to a more advanced ERP software application. In so doing, companies encounter a variety of new integration requirements. These can range from new trading partner formats, other application integration, master data mangement, and participation in market places.
Today’s post focuses on changing from flat file import/export models to a more business oriented services model. I’ll also detail some issues on maintaining master data.
First, I’ll dive into data migration from your old ERP application to a cloud-based solution. In my opinion, many line of business managers think that migrating the old ERP data to the new system is as simple as dragging a folder from one window to the next. Of course, IT Managers understand the need to clean up the old data, transform the data for the new system, keep data in sync between old and new for a period of time, and many other processes and requirements.
Typically the data needing to be migrated to the new ERP platform includes customers, vendors, employees, banks, items, inventory balances, and open items (like POs and SOs). There may be some look-up data such as a special unit of measure or fixed asset rules that also may be copied. It’s true that the data migration task primarily occurs during the new ERP implementation phase. But this does not mean it is a single event. Software vendors such as Informatica recommend that companies convert early and often throughout an ERP migration project.
During the design and development phase of the ERP migration project, one needs to address the ongoing integration requirements required in your implementation. Unfortunately, many ERP implementers leave integration tasks to the testing and go live phase or even later!
I break this down into two categories :
- Application Integration – Most desktop or small server ERP systems provide basic flat file (spreadsheet) import/export capability. But their real-time transaction driven capabilities are limited. In contrast, mid-sized and cloud-based ERP solutions provide robust web services and other transaction oriented APIs. From the business perspective, you might have an existing Point of Sale (POS) system that can provide batch extracts as well as transactional updates. So with a cloud based ERP solution, the POS application can transfer data in real time to the ERP financials. This will provide more up to the minute sales activities.
- B2B Integration – One justification for moving upstream with a cloud based solution is the ability to ramp up eBusiness opportunities. There may be large suppliers or marketplaces that can be tapped into via web services. Or new customers may demand certain data formats be sent electronically. So it is important that the ERP vendor you choose has a strong partner network that provides eCommerce connectivity. Various protocols such as SWIFT, EDI, ACH, XML OAGIS, punchout, etc, need to be in the vendor’s portfolio. Additional work will be needed to implement new trading partners. But this type of connectivity would not even be possible with most desktop based accounting solutions.
Since cloud based ERP solutions do not run within your data centers, there are different integration issues to address. I recommend implementing a cloud based eCommerce / B2B Integration provider to integrate with the ERP system. You will then have cloud to cloud data transfer which can be more efficient than implementing an on premise integration solution. Of course, you will need to address security and data retention issues. Ideally, you do not want sensitive data to reside on an integration server in the cloud. It should be used only as a “pass through” conduit to the trading partner.
Addressing these new opportunities during the initial requirements stages of an ERP migration project will smooth the overall transition. Integration requirements are inherently technical; but they need to matched to business drivers (such as integration with new line of business applications, new marketplaces, new work flow procedures, etc). Once the business drivers are identified, justifying new B2B integration software will make sense.
Tags: B2B Integration, Cloud-based ERP, ERP integration, ERP Migration
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