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148 Chapter 5 • Implementation Strategies

THIRD-PARTY PRODUCTS
What Are They and Why Are They Needed?

What are third-party products? Third-party products are add-on software components either to make
the system operational or to add missing functionality not offered by the ERP system. These products
are often purchased or developed. System operational software may allow the new ERP system to
distribute reports, permit a single-user ID and password, enforce a higher level of security, or improve
system performance monitoring. Although these systems are not necessarily integrated with the
ERP system, they need to work with the system on a regular basis, and they must work seamlessly.
The other type of third-party product is one that adds missing functionality within the ERP.
This is sometimes thought of as a gap in functionality. This type of product, whether purchased or
developed, will need to work in conjunction with the ERP system. It will need to be integrated
with the system. How often and when the third-party system is updated depends mostly on the
requirements between the system components. Some third-party functionality has a real-time
update requirement, and others may only need to be updated daily to effectively provide the
function needed within the organization. A good example of this type of product is an imaging
system to scan and save documents (i.e., signed receipts, checks, invoices) associated with
information in the ERP but not a part of the application.

Impacts of Integration with ERP
When using third-party products, the decision to integrate or interface needs to be addressed.
Integration is defined as the sharing of data and data elements directly with the ERP system with-
out data redundancy or copying of data to another table or database. An interface is a process by
which data or data tables are copied or updated to or from, or both to and from, the ERP system.
Both processes are similar to an implementation, but they also have distinct issues that need to be
addressed. Integrating a third-party product can be complex and requires a technical skill set with-
in the IT organization to incorporate it into the system. Interfacing a third-party product is less
complex and requires a less technical set of skills to develop and support the product.
Component integration should not be taken lightly. To integrate a component successfully,
a staff person with a particular technical skill set is often needed. This is a person that fully
understands the ERP system’s internal data and coding structures. Staff must understand specifi-
cally how and when the system components and data will be updated. As described earlier with
third-party products, each time the ERP is upgraded, the third-party product’s impact on the
upgrade must be researched and estimated. If the ERP and third-party products are both pur-
chased, the vendors will sometimes only allow authorized staff to modify the system, thereby
creating a dependency on both vendors each time either of the systems are changed or upgraded.
Interfaces are sometimes easier to implement, but the downside is that the data will not be as
timely as they would be if they were integrated. In general, interfaces should be one way, either from
the ERP to a third-party component or from a third-party component to the ERP. Entering or chang-
ing data in one location will save time and reduce data and reporting errors. Two-way interfaces are
sometimes required and should be addressed only after exhausting a one-way interface approach.

Support
Third-party product support will vary on level of technical expertise and the timing of upgrades
that coincide with the ERP vendor upgrades. This will need to be addressed as upgrades are
available and tested against the other products that make up the operational environment. The