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Understanding the importance of ERP-IoT integration

Updated: Dec 20, 2021

Analysts from IFS recently asked 200 industrial leaders to characterize the level of interaction between their onsite mobile technology and enterprise resource planning platforms. The results were startling. A mere 16 percent of respondents attested to overseeing full integrated IFS ERP-IoT setups that generate actionable production data, indicating that numerous organizations are operating with seemingly disconnected backend infrastructure.

"It is interesting that not even the most advanced companies were very likely to say their enterprise software did a very good job helping them consume IoT data," Rick Veague, chief technology officer for the IFS North American division, summarized in the report. "This indicates the level of maturity of enterprise software in being able to support leading edge applications like IoT. There is obviously room for growth here because the ability of ERP and other software applications to support IoT is still not robust enough." 

While technological deficiencies may be to blame in some instances, businesses can do more to build connections between their ERP and IoT solutions. Those looking to future-proof their operations and fully embrace Industry 4.0 must focus on IoT integration, as connected enterprise technology is poised to transform multiple industries, quickly evolving from a nice-to-have to a must-have. By 2020, more than 40 percent of all data will be gathered, analyzed and stored by automated machines, according to research from Dell and the International Data Corporation. To make use of these revenue-building insights, firms must develop viable, long-lasting conduits between their web-enabled shop floor devices and ERP platforms. No matter how powerful, software cannot yet make data-based adjustments to core business processes – human workers must make these critical changes and need access to real-time production data to do so.

In the end, businesses facilitating the movement of useful operational data from IoT devices to IFS ERP platforms see numerous benefits, IT Toolbox reported. For one, quality control practices improve, as system users can easily spot errors, perform root-cause investigations and implement money-saving solutions. Raw goods management also becomes easier. Instead of manually logging supplies, shop floor workers can see real-time raw goods information collected by embedded senors and automatically funneled into ERP solutions. Lastly, effective ERP-IoT integration leads to improved partnerships with customers and external suppliers, as these outside parties can leverage data-sharing tools to view valuable insights that can enrich collaboration. Together, these improvements lead to increased efficiency and productivity, while simultaneously setting the stage for more ambitious IoT deployments down the line.

How can enterprises effectively integrate their IFS ERP and IoT technology? Here are some the tried-and-true strategies the leading industrial firms that have navigated this terrain have employed:

Select the ideal ERP solution

This may seem like an obvious piece of advice that requires no explanation. However, a surprisingly large number of organizations end up managing ERP platforms with which they are unhappy, according to research from Panorama Consulting Solutions. In fact, nearly 10 percent of the companies that completed implementation projects in 2016 were not satisfied with the solutions they ultimately rolled out. This may seem like a small group. However, when implementation costs exceed an average $1.3 million and the future of entire operations hang in the balance, it is surprising to find that businesses end up with platforms that do not fit their current or future needs. 

With this in mind, firms must carefully evaluate their options and seek out vendors with solutions that support data collection efforts now and scale to incorporate more intense analytical efforts in the future. For most, this means adopting cloud-based IFS ERP technology, something only 6 percent of the businesses that implemented ERP systems in 2016 did. While on-premises installations might facilitate introductory IoT integration efforts, it is unlikely these setups can support future endeavors without immense capital investment in additional hardware and software resources. Of course, mobile-readiness is equally important. Enterprises simply cannot consider even embracing IoT integration without signing on to adopt IFS mobile technology.

Get a handle on end points

Businesses just starting out on the path to complete IoT-ERP integration may gloss over end point deployment decisions, assuming that hooking up sensors and other devices characterizes the full extend of such an effort. This is a major mistake, Benoit Lheureux, vice president of the technology research firm Gartner, explained in an organizational blog post.

"Achieving seamless integration for IoT-connected assets is likely more challenging than you think, because it involves so many different information technology endpoints," Lheureux said. "Aside from the IoT endpoints themselves, these assets might need to be connected to an IoT gateway, which aggregates the sensor data and feeds it into an IoT platform that can provision necessary IT resources to handle data ingestion, analytics and so on."

In short, pragmatically mapping out end point implementation efforts is essential for companies on the road to integration. IoT gateways are often forgotten in the rush to gather more conventional devices. These fixtures come in two separate types "non-intelligent" and "smart," according to TechTarget. The former perform basic functions, preventing data moving from shop floor devices to company servers from leaking out during transit. The latter support edge analytics, which is a data processing methodology wherein automated computational equipment installed on IoT gateways and sensors performs an initial analysis of collected data to decrease latency and further bolster flow and efficiency. Business leaders looking toward a future in which data drives every sector and internal process must consider advanced end points like these, even if they have yet to make it to the must-have category.

Of course, enterprises must look into more traditional enterprise IoT devices such as radio-frequency-identification readers, which most shipping and receiving stakeholders use to prop up warehouse operations, according to ERP Focus. Technology firms continue to move these essential tools forward, releasing new iterations equipped with advanced sensors that immediately transmit data to IFS ERP platforms and other backend systems. That said, some companies are circumventing long-standing RFID reader form factors and instead equipping their warehouse personnel with mobile applications that can be installed on company provided smartphones or personal ones enrolled in established bring-your-own-device programs.

Focus on security

While IoT technology offers transformative benefits, it does bring along some equally weighty risks. Like all internet-connected devices, IoT fixtures are vulnerable to hackers who execute numerous attacks annually. Last year alone, they organized more than 42,000 digital strikes against enterprises worldwide, according to research from Verizon Wireless. Sadly, many IoT-equipped firms are not prepared to handle such a high volume of attacks and suffer intrusions as a result. Earlier this year, analysts from the business management firms Altman Vilandrie and Company connected with 400 IT executives across 19 industries and asked them to characterize recent IoT breach activity at their respective companies. Approximately 46 percent confirmed that their organizations had suffered IoT-related data losses within the four years. 

Businesses looking to achieve full IoT-ERP integration must understand that the simple act of joining web-enabled sensors and equipment with mission-critical backend solutions creates organization-wide risk. However, executive leaders staring down this problem should not abandon integration as a result. Instead, they must invest in creating modern data security infrastructure capable of protecting system continuity. Device management is the most essential aspect of IoT security. Firms must equip their teams with backend tools like mobile device management suites from where they can track usage and pinpoint suspicious activity. It is also critical that enterprises invest in employee data security awareness training, something that 88 percent of American workers do not receive, according to survey data from Media Pro. Simply giving employees the knowledge they need to avoid falling into digital snares and facilitating the entry of external parties into company servers can go a long way toward protecting enterprise IoT environments. 

In short, before connecting web-enabled industrial assets to essential operational platforms, businesses must install cutting-edge digital defenses and promote usage best practices internally.

The recent IFS survey should give pause to all organizations planning for a data-fueled future. Enterprises have no choice but to fight back against this disturbing state of affairs and launch integration efforts aimed at fully entwining shop floor IoT technology and IFS ERP platforms. Efficient, robust and secure data flow is the key to the future and will buttress the innovations that will arise as Industry 4.0 comes to a close and Industry 5.0 emerges to take its place. Businesses in all industries can facilitate immense productivity gains and start planning for long-term success by properly linking their IoT and ERP infrastructure.  



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