The Future of ERP and the Role of IoT
Modern ERP systems bind all business applications together into one integrated platform effortlessly, enhancing data visibility, control, and decision-making. However, since they were first created decades ago, ERP business procedures have mostly not evolved. The Internet of Things (IoT) and ERP integration, however, can be very advantageous for both internal business operations and activities that interact with customers.

IoT solutions enable the real-time transfer of data from various external machines and devices to the internal ERP systems. The endeavor to link internal business apps and procedures to external data is no longer necessary for organizations. Gaining relevant insights is more likely because of the real-time, extremely accurate data collection from these IoT devices.

What is Not?

Almost any 'thing' may now communicate and transfer data over the internet, this technology is known as the IoT and IIoT. These 'things' are connected to intelligent devices. These gadgets are intelligent because they have some built-in computational power. These gadgets' internet connectivity is another important aspect.

In their piece How Smart, Connected Items are Transforming Competition for the Harvard Business Review, Michael Porter and James Heppelmann described how transformational these products are. Tesla cars, robotic vacuum cleaners, the common smartphone, connected refrigerators, and even smart toothbrushes are examples of smart, connected devices.

It is now possible to incorporate smart, connected capabilities into practically any object for as little as a few dollars thanks to the dramatic decrease in the price of these computational capabilities over the past few years.

How does IoT work?

Devices, data, connectivity, data processing, and user interface make up the foundation of the Internet of Things (IoT) (UI). All five components are necessary for the organism is known as the Internet of Things to function.

1. Devices: The data originates from the devices. This might be a gadget like a camera or a sensor like a proximity sensor coupled to a different gadget like an automobile. This gadget acts as a data source.

2. Connectivity: Following data collection from the devices, it must be integrated into a larger data set. It is necessary to combine data from many sources and use it to add value.Data processing is required once the data from many sources have been combined to produce insightful information.

3. Data: Data might be referred to as the organism's lifeblood because it is essential to the IoT's continued operation. IoT and all its features are driven by data. Without data, this network of connected gadgets would serve no function.

4. User Interface (UI): All the knowledge and conclusions are drawn from the data must subsequently be put into practice. This is made feasible by the UI's actionable presentation of the data, information, and insights.

How will Integrating IoT transform ERP and the Business Processes?

IoT and IIoT are now displacing and replacing the sources for many orders and transactions processed in ERP systems, whether they are sales orders in the Order to Cash (OTC) process, purchase orders in the Purchase to Pay (P2P) process, work orders for plant maintenance and operations, or service orders.

Let's assume that work orders are the category of orders that are created to perform work on a factory floor, such as orders to carry out a production step and orders to carry out a specific type of machine maintenance duty. Service orders, which are issued to carry out duties like the upkeep or repair of a customer's refrigerator, are another category of orders.

ERP systems currently use data from smart, connected devices as an addition to the main business processes. The ERP systems are currently being updated by the current (and antiquated) business procedures. This involves bringing the IoT data into a data lake or data store. However, in the future, business systems must regard IoT data as the main source and record for managing corporate operations.

Advantages of integrating IoT with ERP

Actionable insights are necessary for successful digital transformation, and the quantity and quality of the data that IoT devices collect will determine this. Following are some of the advantages that businesses can get by integrating IoT with ERP:

1. Enhancing Asset Management

IoT can deliver real-time information by following and keeping an eye on expensive materials, equipment, or assets in the supply chain. By integrating ERP and IoT, all parties engaged in the supply chain may keep informed and take appropriate action. This information is automatically fed into the ERP system. By sending notifications when assets require maintenance (repairs/breakdowns) or are at risk of theft or damage, IoT systems can also alert the appropriate staff.

2. Business Insights in Real Time

Instantaneous access to critical business information is made possible for enterprises by integrating ERP with IoT data. Businesses can execute real-time analysis using the continuous data stream coming from IoT sensors and devices, which enables them to get useful insights to enhance decision-making. These useful learnings from IoT data can change the way you run your business from being reactive to proactive. You may also think about combining ERP systems with AI, ML, and IoT so that staff members receive the correct recommendations at the right moment, assisting them in making the best decisions.

3. Better Forecasting

The difficult process of predicting consumer product consumption and purchasing has serious consequences for businesses that get it wrong. By examining vast amounts of IoT data, smarter supply chain choices may be made more quickly. By enabling companies to collect real-time data directly from customers and transfer it to their ERP systems, integrating ERP with IoT creates a clear relationship between production and consumption. Forecasting and planning are made simpler and more effective by the information you can collect about when items are used, the demographics of your customers, and the frequency of use.

4. Improved Operational Effectiveness

By combining ERP with IoT technologies, many manual operations can be automated, increasing operational efficiency. For example, barcode scanning and manual data entry into the ERP system will no longer be necessary. Reordering, restocking, inventory changes, and missed deliveries may all be tracked using IoT and automatically updated in real-time in your ERP system with sensors embedded in components and machinery.


Any device can now be made a part of the Internet of Things (IoT) thanks to the rapid growth of technology and readily available sensors. According to some predictions, by 2020 there will likely be more than 100 billion devices online. Without a doubt, the business world stands to gain much from IoT. The business world has not been slow to the game and has already begun to fully utilize this technology. ERP has a lot to gain from IoT because it sits at the center of an organization where all data must be centralized. IoT is a crucial and indispensable component of ERP in the modern company environment. Not only has IoT revolutionized the field of ERP, but it has also shown to be essential to ERP.