Application Integration for the emerging reality of ERP+Business Applications

Now that the majority of companies do not have one base ERP and use an increasing number of cloud solutions for some of the business applications, a new strategy is required.

So, while in the past you would either build on the ERP vendor provided integration capabilities or on best of breed ESB, ETL etc while aiming to grow an ICC handling all the requirements in a systematic way, these days, companies effectively have a hybrid environment, which is significantly reshaping the ERP integration landscape and its requirements. According to Gartner’s CIO survey, this will grow from 50% in 2014 to 63% in 2019.

Businesses are also responding to regulatory and commercial pressures to externalise parts of their value chains, with new demands from an integration and security viewpoint.
Finally, there is also an emergence of what is often called “adaptive integration” – iterative, line of business based integration (sometimes based on an ICC, other times based on locally defined methodologies and governance processes).

In our view, there is a clear need to adopt a strategic approach to application integration capabilities in this postmodern ERP application landscape.

This strategy should address the following key focus areas:
a. Maintaining data integrity and synchronisation between on-prem, cloud and outsourced business processes.
b. Enabling business teams to develop better integrations. There is an increase in the development of integrations outside IT control that we should not try to constrain but instead leverage and direct. And, according to Gartner, the majority of the costs of implementation of large systems will be on application integration. This alone should guarantee good coverage in the CxO agenda.

More than ever, integration requirements should be evaluated from a business process viewpoint, to determine the application functional overlaps and the default touchpoints. Key processes go beyond procure to pay, enquiry to cash, to other operational end-to-end processes, such as those found in finance, HR (like “from need to onboard”, performance management and “excess to rolloff”), manufacturing and distribution (from “product order to shipping”, or even “from ideation to packaging and logistics”), service and the supply chain (like “from procure to receipt”).

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