Suppose you are looking to scale up your online business. In that case, you should keep reading because, in this article, you will discover what an integrated e-commerce ERP solution is, how integrating an ERP with your e-commerce system benefits your business, the automated features of ERP for e-commerce, and the step-by-step process of integrating ERP into your e-commerce business.
What is an e-Commerce ERP integration?
An ERP is a software that guarantees effective coexisting synergy between essential business activities such as human resources, finance and accounting, production, sales activities, marketing, purchasing, and logistics. It collects, organizes, and stores digital information about a business.
With the help of integrated e-commerce ERP platforms, companies can increase the efficiency of their business processes. In such an integration, existing e-commerce systems (online shops, marketplaces, etc.) are connected to an ERP via intelligent interfaces to enable continuous real-time data exchange between the systems. This solution offers several advantages.
How does integrating ERP with your e-commerce benefit your business?
There are various benefits associated with utilizing integrated e-commerce ERP solutions for your business. They include:
- Reducing manual data entry: Integrating your e-commerce sales channels with an ERP system enables you to run your business more efficiently. This is because reduced manual order entry results in more accurate order processing. Utilizing e-commerce ERP helps mitigate or reduce order and delivery mistakes while saving time and increasing output.
- Improving visibility & overview: Since all data now flows back into a shared backend, it is possible to analyze and compare individual business areas by means of precise reporting and forecasting. This is a huge asset for decision-making processes, strategic planning and steering.
- Inventory management made easier: e-commerce ERP enhances your inventory by coordinating product stock and availability. Order, inventory, item, customer, and shipping/tracking data are all shared between your previously separate systems. Due to the availability of data, time is saved. Likewise, all sales channels can now be run completely with the master data from the ERP system.
- In the long run, it reduces your business cost: According to some studies, ERP integration can reduce costs by up to 20% in operating costs, 18% in administrative costs, and 22% in inventory costs. Costs are greatly reduced when ERP and e-commerce are well integrated. The quality of information given leads to improved customer satisfaction and, as a result, higher profitability, and the automation of internal company processes leads to a considerable reduction in expenses.
- Improved customer satisfaction: When your business product information is up-to-date, and your order tracking information and inventory status is accurate, it improves your business efficiency and gains consumer trust. Customer satisfaction works to your advantage as no other marketing technique does.
Automated features of an e-commerce ERP
By integrating e-commerce systems with the right ERP, ideally, the entire e-commerce process chain can be automated. In the case of much.Consulting’s solution this includes:
- Order-to-Deliver processes
- Purchase-to-pay processes
- Order-to-cash processes
- Follow-up processes (dunning)
- Returns processes
- and many more
Within the order-to-cash process a complete automation of the order processing, delivery creation and invoicing, including the creation of down payment invoices in case of actual taxation as well as the communication with the customer (delivery confirmation, invoice) can be achieved. In addition, address checks and, depending on the flexibility of external and internal logistics providers, picking processes and shipping label creation can be partially automated.
What is the step-by-step process of integrating e-commerce ERP?
Note: Depending on the scope of your specific requirements, getting started with an e-commerce ERP integration project can be a lengthy endeavor that involves several steps and phases. In the following, the focus lies on some of the most crucial ones.
- Hire the right consulting partner: Overall, selecting and integrating ERP software into your IT landscape is a lengthy and complex process and a lot can go wrong. In fact, research by the analyst firm Gartner suggests that about 74% of all ERP projects fail, with a total of 54% going over budget and 57% exceeding the expected timeframe. This can be due to a company lacking the necessary expertise to determine its requirements. For example, standard systems that cannot be customized often do not meet basic requirements and can lead to total failure. Teaming up with a consulting partner with high expertise in the area early on not only helps avoid wrong decisions, but is also critical for companies that lack internal resources and require complex system integrations and data migrations.
- Analyze your core processes and identify deficits: Review your existing processes. Which manual workflows in your company could be automated via integration, and how might they be improved? Determine your core requirements and prioritize them, determine exactly what systems have to be integrated, identify the gaps in your existing solutions, and what features you would like to add.
- Create a short list of relevant systems: Once you have an overview of your requirements and goals of an ERP integration, you can start to consider the relevant solutions. This can seem overwhelming at first glance, but if you have your requirements clearly defined and keep them in mind, you will quickly be able to narrow the selection down to a short list. With this you can request different offers, options and attached cost points. It can be advantageous to obtain multiple offers to find the best fit for you on the budget, timeframe, requirements and personal level.
- Draw a holistic outline of the required data flow between systems : You need to determine which data should be exchanged, synchronized, and processed between the ERP system and your e-commerce systems. To do this, consider which data is required for which processes and needs to be distributed to which endpoints.
- Migrate your data: Data optimization and migration are complex and even dreaded by many ERP consultants and implementers as it is tedious, difficult and requires high skill. Nevertheless past data is in many cases necessary to work successfully in the future. much. Consulting has developed tools and processes to reliably transition your data with limited effort and at a comparably low price. For many systems we have experience and existing templates we adopt for your needs to be as efficient as possible.
- Test every application thoroughly: One of the top 6 reasons for ERP project failure is poor testing. To avoid this, you need multiple layers of testing:
- Every customization needs to be tested by developers to avoid technical errors.
- Changes to the interface must be reviewed to find inconsistencies between the implementation and the requirements.
- Your users must be given sufficient time for thorough testing.
- Finally before go-live, all main processes must be tested end-to-end to identify any problems that occur when all modules and interfaces work together.
When is the best time for an e-commerce business to implement an ERP?
Are you wondering whether it is already time to consider an ERP e-commerce integration? Use our checklist, which was developed in collaboration with the Technical University of Munich, to assess your current state and decide whether an ERP integration makes sense for your business.
Checklist for determining the right time to integrate:
If more than 25 points are scored in the following, you should consider implementing an ERP solution.
Assess your business: which statements apply?
- More than 20 employees [6 points].
- more than 50 incoming invoices per month (vendor invoices) [15 points]
- more than 150 transactions with customers per month [6 points]
- customers from 3 different countries [4 points]
- 5 customers from outside the EU [14 points]
- more than 5 physical products in your portfolio [10 points]
- In-house manufacturing or managing external manufacturing [10 points]
- any compliance-related processes (e.g., ISO, TUV, other certifications) for your company are required [25 points]
- More than 100 ongoing subscriptions [9 points]
- more than 50 quotes per month [6 points]
- more than €5 million of total funding [6 points]
E-commerce is a highly competitive sector and in order for a business to stay viable in the long run, growth is most crucial. More growth means more products, customers, employees, data, and processing. It also implies that your company must be prepared to handle scalability effectively.
ERP integration with your e-commerce systems can help drive business growth significantly. Centralization, automated processes, less human error, and cost savings are just a few powerful benefits organizations achieve through integration.