Why Enterprises Should only Buy ERP Systems with Open RESTful APIs
ERP is the beating heart of any manufacturing or supply chain organization. Often, it is integrated with a range of internal as well as external systems. Integration of systems is a key enabler for automation of business processes. It offers the business that implements it competitive advantages, both in terms of saving costs due to less manual labour and a reduced number of errors and in terms of providing a better user experience for employees and customers alike. This implies that it makes sense to invest significant effort into integrating your ERP system with other systems – regardless of whether you are a small family-owned company or a global enterprise.
EDI: Complex and Outdated
Historically, integrating ERP systems have been an expensive and laborious task. Over a period of decades, Electronic Data Interchange (EDI) has seen mainstream adoption throughout organizations worldwide. It has helped eliminate manual paper processes and delivered significant efficiency improvements to supply chains through increased automation. However, a drawback with EDI and the protocols and formats it uses is that it was designed in an era of batch business processes which are less suited for the near real-time B2B communication that modern enterprises increasingly require. Although newer B2B standards can offer improvements, the information shared between two systems is still focused on supply chain “milestones” for core business processes. EDI is not designed to handle more sophisticated real-time events. Finally, as an asynchronous, point-to-point document exchange protocol that is normally file-based, EDI enables companies to periodically exchange data but not to engage in emerging, continuous digital business processes. It comes as no surprise that EDI is perceived as complex and old-fashioned, with documentation only available for a selected few and requiring scarce specialist expertise or buying the entire capability as a service from providers at significant cost.
RESTful-API: Easy to Handle, Robust and Scalable
Enter the open and RESTful API. REST has emerged as the de facto standard for API-based system integration in recent years. It enables connecting applications directly, instead of using a file transfer server as intermediary. Using APIs to connect directly to a transactional system, like an ERP, makes the data transfer path simpler since the intermediary file transfer server and associated processes are eliminated. API-driven transactions require fewer resources to manage the exchange of data, can be secured using encryption and authentication mechanisms, and execute close to real-time. Restful APIs also provide unmatched scalability, since they are stateless and can easily be duplicated into multiple services running in parallel. The same attribute makes REST APIs robust since it is possible to operate an uninterrupted service even if one of the instances fail or is taken down temporarily for maintenance. The perhaps most important benefit, however, is the reduced complexity in implementation and the availability of expertise. RESTful APIs provide interoperability with most modern IT systems and thank to their open specifications, nearly every software engineer knows how to use them. This in turn, allows for faster time to market, reduced implementation and maintenance costs and less risk to the business continuity of the organizations that adopt them. Goodbye key person risk.
The iPaaS Advantage
Finally, a significant advantage of choosing an ERP system that supports open and RESTful APIs, is that it allows the system to be connected to integration points available out-of-the-box. Examples of such offerings are integrations platforms as a service (iPaaS) and pre-manufactured connectors of systems commonly available from larger software vendors, even if the latter is usually limited to a specific pair of systems. Such solutions are increasingly made available and enable the true target state of integration: no-code and zero-maintenance integrations.