ERP and IoT Integration: Opportunities, Challenges and Future Prospects

Enterprise Resource Planning (ERP) plays a critical role in streamlining processes and improving business operations across industries. Today, the Internet of Things (IoT) and massive data influxes are stirring up the ERP landscape, introducing new possibilities for operational excellence and workflow automation. This week we sat down with Atul Sali – the Cofounder and Director of Orange Oranges Technologies to discuss the current ERP landscape and the opportunities and challenges of synergy between ERP and IoT, as well as the role of wireless connectivity in its integration.

1. Tell us about Orange Oranges Technologies. What is your vision, who are your customers, what verticals do you target?

At Orange Oranges, we are focused on business process consulting, application integration, human resource solutions (SAP) and other web technologies. Our vision is to be the one-stop-shop for IoT and enterprise software integrations to fuel data into any type of ERP system. We envision ourselves to drive the business process consulting and human resource management side of the technology. We have a large customer base in manufacturing, energy and utilities, lumber, supply chain logistics and transportation.

2. How do you see the Enterprise Resource Planning (ERP) landscape today?

Today’s ERP landscape is highly complex, and part of this is due to the breakneck pace of technology. A small-scale ERP implementation often takes at least three months to complete, while a larger scale project could require more than two years. Meanwhile, there could be significant technology changes occurring alongside the two-year implementation. The rise of low-cost cloud computing and SAAS solutions also make marketing ERP products challenging.

SAAS allows for monthly pricing based on the shared CPU / DISK / MEMORY business model. So, the cost is much lower than traditional on-premise ERP systems. Plus, there is no hardware setup cost, and the installation time is very short as any server can be provisioned as well as decommissioned with just a few clicks. For smaller businesses with simple processes, SAAS-based ERPs are a great option, since they don’t have to worry about server hardware, power backup, installations and related insurance. On the other hand, for larger businesses, cloud-based ERPs often do not fulfill all features and functionality requirements as the on-premises versions. Customizing cloud-based ERPs can also be challenging due to the shared ERP software code at the backend.

3. Why are ERP systems important to industrial operations?

Centralized business information is key to all industrial applications. Today, business consolidations happen at a faster rate, as new technologies enhance oversight through a higher degree of automation and the reduced need for manpower. With increased consolidations, ERP systems are critical to the effective management of large-scale applications.

4. How is IoT impacting ERP systems?

IoT is cutting down the time to implement system monitoring and data collection technologies. Wireless solutions that are simple to deploy enable easier and less expensive access to data to drive higher revenues. In the near future, improvements in IoT technologies are also poised to reduce ERP implementation costs.

5. Please specify some examples where combining IoT and ERP could fuel operational excellence and business growth.

In the chemical industry, there is a host of parameters that need to be monitored 24/7. Information like temperature, pressure, humidity and vibrations in the manufacturing plants is currently collected both manually and using wired systems. This data is fed into ERP applications to enable round-the-clock monitoring of industrial systems. Effective monitoring opens opportunities for improving efficiencies and lowering insurance costs. Until now, all of this has been done in a semi-automated manner. Applying IoT could change the game with fully automated data collection.

6. What are the current challenges of integrating ERP systems with IoT?

The biggest challenge is the lack of trust in IoT as a relatively new technology trend. Data security is a top concern and companies heavily investing in ERP are very wary of the accuracy and reliability of the data coming from an IoT system. After almost three decades since their introduction, ERP systems are so well-oiled that a single record could represent a few million dollars. So, it’s simply too risky to trust anything new. In a large-scale ERP implementation, nobody wants to save money unless it is millions of dollars. ERP systems should last at least five years on the low end.

7. What is the role of connectivity in bringing IoT and ERP together?

System connectivity is paramount, as everyone working in ERP knows data integration is the backbone of an organization. Walmart, Amazon, Apple, Best Buy, Costco and many other organizations have achieved great success by creating best-of-breed, data-driven supply chain systems where data flows are fast and seamless. Artificial Intelligence thrives on data and IoT is the key to unlocking and aggregating massive data. Right now, system integration works in all ERP layers from data sources to the executive summary and incorporation of external parties like the government.

IoT connectivity simplifies data transmission and allows us to tap into previously inaccessible data. This fuels a vast array of analytics and AI applications. In ERP, there’s a simple rule – the better connected we are, the less business logic and system engineering work needs to be done. Besides, bad connectivity means that fines might need to be paid due to the lack of information.

8. What are the connectivity requirements in this context?

In the ERP context, the ability to gather as much logical information on the edge device offers significant benefits. With that said, ERP systems heavily rely on data being reliable to execute important tasks like auto-scheduling of predictive maintenance or auto-ordering of spare parts and so on. In the ERP world, there is a huge emphasis on auto-scheduling as many processes as possible. Also, due to the mission-critical nature and heavy automation involved, data privacy and security are imperative. In mining, for example, a data breach incident could cause the loss of thousands of dollars.

At the same time, longer communication range is certainly a useful and much needed aspect in various industries like lumber, chemical, or fleet management where there are huge distances to cover. Most of today’s ERP systems are cloud-based, so being able to send data directly to the cloud is very helpful. In addition, since cloud ERPs are highly scalable, the ability to scale hardware systems in parallel is paramount. As new fleets or new manufacturing plants are added, easy and seamless integration of new IoT devices and systems is highly valuable.

9. How do you see the ERP and IoT trends moving forward?

Very soon IoT will be embedded with ERP applications. I wouldn’t be surprised if, for example, IoT data fed into supply chain ERP systems to make automated ordering a reality. As of now, we’re still in the early stage of the IoT and ERP integration, but this will soon take off as edge computing gets easier and smarter. We are also going back to the mainframe-style, single ERP system, as cloud computing and high-power systems make it easier. IoT is simply the most logical step and it will go through the roof as mobile revolutions did in the last decade. I am concerned about data security and privacy, but at the same time excited about a fully connected world.

10. How do Orange Oranges Technologies and BehrTech work together to accelerate IoT and ERP integration?

At Orange Oranges, we have more than 20 years of experience in integrating with various ERP systems like SAP, JDE, Peoplesoft, Oracle, Baan, Concur, Workday, on-prem, cloud or hybrid - using various integration technologies including webMethods, Oracle, SAP EDI, EDI, JSON, XML, SOAP and REST. For us on the upstream side is feeding data into analytics, data warehouse and management platforms – though more and more ERP systems are coming with built-in data analytics tools nowadays. On the downstream side is collecting data with IoT technology and integrating it into ERP applications.

BehrTech brings to the table what most ERP vendors need including a best-in-class IoT wireless connectivity and a versatile device management software to forward data to any required backend and server. Having BehrTech as our go-to IoT partner, we will be able to work IoT into any ERP systems and scale the integration as needed. Also, with our global experience from India to North America, we know how to manage and work in an outsourcing situation, if required. Together, Orange Oranges and BehrTech could help businesses bring multi-layer technologies together to improve different aspects of their operations – from supply chain and logistics to human resource management.