ERP integration projects rarely come without challenges, so most teams dread the project in advance. Yet, by being aware of the risks and challenges of the projects beforehand, you will be able to scope your project better and prepare your project plan and timeline accordingly – and perhaps, the project will be less dreadful than you initially thought.
We have collected the seven most typical challenges of integrating ERPs and listed the main benefits you can gain from completing the project.
1. Lack of IT resources
In almost every case we have seen over the years, the need for more tech resources can be a severe road blocker for the project. While many treasury and finance departments have dedicated resources to help them manage processes and projects, a large undertaking may put your IT personnel in a difficult position. They may not have experience with certain technologies like APIs, RPA, or AI that could come up in some cases, which can initially seem overwhelming.
Be sure to discuss your resources with the vendors you’d be working with early. Most vendors have their own resources for ERP integrations and bank connection development, and they deal with similar projects daily so they can support your IT team.
2. Lack of documentation
If the documentation on your ERP setup or the proprietary communication format is missing or not detailed enough, it may slow down the implementation project. While experienced developers will be able to make the connections work, the data mapping between systems can take time and resources to get it right.
3. Lack of data quality
You must address and ensure that the data from the ERP to your treasury management solution is high-quality and comes with high data integrity. This will ensure that, for example, communication with the banks will be free of errors, and it can also allow you to build more accurate cash flow forecasts as due to the integration, you will have all necessary cash flow data at your disposal automatically.
4. Time pressure
Never underestimate the time you need to implement a project – it’s good to be optimistic but being too confident with an ERP integration project is often a mistake. Try to be realistic about the timeline and ensure you include all the internal and external specialists that know best how long it can take to send the first files between the two systems. Having high-quality data available already for testing will be very helpful to stay on your timeline.
Whether you can deliver the integration project on time depends on both parties (the client and the solution provider): responsiveness is one of the secret ingredients of getting everything done.
5. Don’t break the underlying processes
If you have some processes in place already, you should carefully plan the changes to not break the processes that are already working. Instead, make sure you build on what’s working and fix the processes that could use improvement.
6. Consider the project team
Having an excellent team to deliver the project is more important than you think, so choose your team carefully! When starting the project, establish the standard ways of working needed to achieve the best outcome. Start by setting up a meeting cadence, a communication channel, and work together on the project plan. Also, when you hit significant milestones, don’t forget to celebrate your success – it’s way too often overlooked!
7. Changes in management & communication
Upon successful implementation of the ERP integration, a lot may change in how you work. Whether you are adopting a single solution for cash or treasury management or implementing a complete TMS, you need to identify how it will affect people’s work and how you will communicate the changes to ensure everyone is aligned.
Depending on the size of your project, it may take a few weeks/months to even a few years to get everything done. It would be best if you communicated with all the relevant stakeholders throughout this time so they are continuously prepared for any upcoming changes.
What are the benefits of a successful ERP integration project?
Today, there aren’t many systems in a company’s arsenal that aren’t integrated with other systems. The most typical benefit of integrating different systems is the automation aspect which is often accompanied by operational efficiency and thus cost savings. When ERPs are integrated with treasury solutions, you will also start building a more strategic treasury as you will be able to automate manual work and free up time to add a new variety of more strategic tasks to your to-do list.
When your ERP is connected to a treasury management system, you will benefit from better automation that will not only reduce operational cost but also provides the opportunity to shift the treasury’s focus.
Here are the main benefits you will realize once you have implemented the integration between your core systems:
1. Automating processes
We often still come across treasury teams that handle some of their processes partly or entirely manually. In such cases, starting an automation journey and aiming for full automation is the best option, and it will also have the biggest upside. The automation journey almost always begins with an ERP system integration – and of course, you should not forget how you will deal with bank connectivity.
2. Reduce operational costs
Most of the time, starting an ERP integration or treasury solution implementation project is not driven by cost savings, but it’s an additional benefit. Typically, treasury teams can realize one-time and annual savings when they achieve better automation between systems.
You will be able to realize savings in different ways. By implementing better processes, you will discover more efficiency in your working methods as your personnel can focus on tasks other than manually extracting data from various systems. IT integrations can save you hundreds of thousands of euros yearly, and reducing errors and improving compliance should also be accounted for. When building a business case for connecting all systems and implementing new treasury solutions, it’s good to do the initial math to quantify the ROI of the project.
3. Turn the treasury department into a strategic advisor to your organization
The treasury department is a vital function for an enterprise, and thus, processes and new solutions should be aligned with how to serve the business better. From ensuring that payments are executed securely and timely to handling guarantees faster and predicting future cash flows better, the treasury function can provide businesses with great operational advantages. With integrations, a lot of the manual processes can also almost be fully eliminated, and treasury can focus on managing the organization’s cash positions and risk better. In addition, having better access to data and deriving direct insights from them is an excellent starting point for turning the treasury organization into a strategic advisor.
To succeed, align your treasury & IT departments better.
Integrations are the basis of all treasury technology processes – no matter what solution you will implement, whether it’s an entire TMS or just a standalone solution on top of your ERP, you will most likely need to connect one or more ERP and multiple bank accounts.
To do so, building a relationship with IT is crucial. In some treasury teams, we have seen an emerging trend that the team has its own dedicated IT resource who doesn’t only help with the technical implementation but may also be the process owner. Hiring the right people with specialized skills will remain important in treasury in the future and can completely transform how you will be able to deliver technology implementation projects.