For Toyota to meet or exceed customer expectations, its critical the links are real-time, which are often the most expensive to initiate and maintain yet the most reliable over time (Sharif, Irani, Love, 2005).
Analysis of Best Practices in Enterprise Resource Planning and Systems Integration
Integration is a strategic advantage when done well, significantly increasing the accuracy, speed and reliability of responses of companies to their customers. Integration predicated on unifying business processes that are aligned on the customer and their needs with defined levels of performance as measured with key performance indicators (KPIs) and metrics have a significantly higher probability of success (Sharif, Irani, Love, 2005). The technology related to integration is secondary to the business benefits that these technologies provide across ERP instances, all aimed at attaining a strategic objective (Gartner, 2010)(a).
The best practices that are emerging in the area of ERP integration arte quickly progressing beyond application integration to the formation of entire value-based networks (Gartner, 2010)(b). Gartner has called this approach to integration the creation of a Demand Driven Value Network (DDVN). The concept that DDVNs are based on unifies the entire value chain of a company and makes the response to market conditions orders of magnitude faster than if manually-based integration approaches had been taken (Gartner, 2010)(b). This is being completed in conjunction with analytics and Business Intelligence (BI) to evaluate the contributions of real-time integration across CRM, supply chain, logistics, services and support systems (Griffin, 2007). Of all the critical success factors (CSF) that pervade ERP system integration and planning, the ability to define and execute real-time integrations with enterprise systems outside the four walls are the most valuable, yet the most challenging as well (Malhotra, Temponi, 2010). Integrating to SaaS-based systems has emerged as a critical best practice (Gartner, 2011).
References
URL Section
Gartner (2010)(a) Magic Quadrant for ERP for Product-Centric Companies http://sme.news-sap.com/files/2011/01/SAP-vol2art5.pdf
Explanation
The 2010 Magic Quadrant for ERP for Product-Centric Companies provides insights into the integration strategies companies are using to create enterprise architectures that encompass CRM, SCM, WMS and MES systems. The Magic Quadrant...
The use of customer references is prominent in the methodology, further ensuring that companies relying on this analysis to define which ERP systems they purchase align with critical success factors included in systems integration.
Gartner (2010)(b) Manufacturing 2.0: A Fresh Approach to Integrating Manufacturing Operations With DDVN
http://www.apriso.com/library/white_papers/Apriso_WhitePaper_Gartner_Manufacturing_2.0.pdf
Explanation
The Manufacturing 2.0: A Fresh Approach to Integrating Manufacturing Operations with DDVN (Demand Driven Value Network) defines how integration across ERP systems is fueling an entirely new class of value-based network. These networks are capable of responding quickly to variations in customer demand. A DDVN becomes a strong differentiator from a strategy execution standpoint. The analysis shows how Manufacturing 2.0 is being driven by intelligence and insight over competing purely on price alone.
Gartner (2011) SaaS ERP Only Reduces Part of the Effort Needed to Implement and Operate Your ERP
https://cours.etsmtl.ca/gti727/notes/H11/sem4/SaaS%20ERP%20Only%20Reduces%20Part%20of%20the%20Effort%20Needed%20to%20Implement%20and%20Operate%20Your%20ERP.pdf
Explanation
Software-as-a-Service (SaaS) continues to dominate much of the industry's focus as this approach to delivering software can drastically reduce operating costs and total cost of ownership over time. The point the authors and researchers make in this study is that SaaS is much more difficult to integrate to and make useful -- much more challenging than the vendors portray it as. The study also shows how the greater the number of system integrations in an enterprise platform the higher the probability of failure.
Peer-Reviewed Journals and Articles
Jane Griffin. (2007). BI and ERP Integration: Five Critical Questions. DM Review, 17(5), 6.
Malhotra, R., & Temponi, C. (2010). Critical decisions for ERP integration: Small business issues. International Journal of Information Management, 30(1), 28.
Amir M. Sharif, Zahir Irani, & Peter ED Love. (2005). Integrating ERP using EAI: a model for post hoc evaluation. European Journal of Information Systems: Special issue: making enterprise systems work, 14(2), 162-174.
