• ecommerce-erp-integration-options

As eCommerce continues to grow in popularity, online storefronts are now relevant beyond just the large retail companies, and in some industries necessary to remain competitive.  Many companies engaged in industries that historically stayed away from online sales channels, including wholesale distribution companies, are now branching out into distributing their products online, both through B2B sales tools and B2C direct to consumer.  For these wholesale distribution companies, although they have added a new sales channel, their back end processes will remain the same – they must still manage the inventory required to fulfill these orders and process sales into an accounting system.  This is where eCommerce integration between an online storefront and back-end inventory and accounting ERP system comes into play.  But what exactly does this mean, and what options are available for doing so? In order to answer these questions, you must first ask yourself a few others:

  • How many orders to you expect to receive online each day?
  • Do you have dedicated staff for managing orders and picking, packing and shipping?
  • Should anyone be able to purchase from your eCommerce store, or do you want to restrict which customers can?
  • Do you also sell through other eCommerce channels (such as Amazon or eBay)?
  • Do you have different pricing for different customers?

Answering these questions and others is important to determine exactly how sophisticated the ERP and eCommerce integration needs to be, which type of eCommerce store is best suited for your business, and how much it will all cost.  Consider the following options:

 (1)    No Integration

The first and simplest approach is a site with no integration, and is best suited for small companies with a low volume of daily orders.  An example is a website that allows customers to view product and place orders, but all inventory levels must be manually updated within the site’s interface and all sales orders are manually downloaded from the site and re-entered into an accounting system.  This allows companies to provide customers access to product information online, and since order volume is so low, manual processes may be appropriate for then fulfilling the orders.

 (2)    Simple Integration – Batch Updates

The second option is a site set up with only one-way integration and batch updates, which can be set up automatically or done manually.  This means the user has to batch update the site and any back-end systems on a regular basis, for example, once a day.  Users pull any orders placed online into the back-end system which creates a sales order and allocates the inventory.  In addition, new product that comes into the warehouse gets entered into the back-end system and then batch pushed up to the online store.   This option allows users to batch pull and push information between systems, thus eliminating duplicate entry and keypunch errors; however without true real-time integration, businesses can be left with inventory discrepancies when customers place orders through other sales channels.  Once again this method is therefore also best suited for companies with a low daily order volume.

(3)    Sophisticated Real-Time Integration

The third and most complex level is also the most expensive, and best suited for larger online retailers.  This level of integration automates several steps and is truly real-time. Software automatically crawls a website for any new orders, which get pulled into the back-end system in real time (or near real time), creating a sales order and updating inventory information. When new product comes into the warehouse and gets put into the system the same process applies – information is pushed up to the website, including product descriptions and pricing. Users can schedule this automatic pushing and pulling of information to happen at regular, pre-determined intervals throughout the day – for example every 3 minutes.  This level of integration is best suited for companies who receive dozens or hundreds of online orders per day. Website and back-end inventory and product information is always up-to-date, and manual processes associated with re-entering data are eliminated.

(4) B2B eCommerce – Online Order Portal

The last option is geared more towards B2B type companies, being an online order portal, requiring each customer to have their own unique login.  This type of site is strictly designed to streamline the order entry process and the website is not built for SEO or marketing purposes.  Because of this, these types of websites are often linked from an existing site so that new customers can find a business and existing customers can place orders.  Requiring a unique login means that customers must arrange to create an account prior to ordering product, which gives the company more control over who they sell to.  Once logged in, customers can view available inventory with product images, review previous orders and sales history, see specific pricing information and actually place an order.  Inventory is then allocated in the back-end and a sales order gets created with all the information updating in real-time.   Because each customer must login to place an order, this gives the company flexibility in terms of setting up different pricing for customers and what products are available.

Guide to eCommerce and ERP Integration