This is the first in a series of posts that discuss commonly misunderstood ERP software jargon. Although some of these terms may vary by business, we will try our best to give as generic a definition as possible.
Before defining eCommerce integration, we should take a step back and first explore the term eCommerce.
eCommerce, an abbreviation of electronic commerce, is used to describe an industry in which buying and selling products and services is conducted over electronic systems – most commonly via the internet. It also refers to the exchange of information necessary to complete these online transactions such as inventory and pricing data. eCommerce includes transactions made online with mobile and tablet devices.
Although eCommerce dates back to the 1980s, it continues to evolve as features such as mobile commerce, group buying, private sales and social commerce are developed. It is features like these that have made eCommerce a realistic option for businesses of all sizes, and the convenience of purchasing products over the internet in a secure way, 24/7 is very attractive. According to Invesp, more than 80% of the online population has used the internet to purchase something, and Forrester Research forecasts that between 2011 and 2016 15% more US consumers will shop online.
Simply put, eCommerce integration is the coordination between a company’s eCommerce site and back-end accounting and inventory (ERP) system. Proper integration enables the flow of information bi-directionally between the two systems meaning data only needs to be entered into one system once. This results in various efficiencies such as inventory levels automatically updating at the back-end as product is sold on the eCommerce site and at the front-end as product gets received into a warehouse and added to inventory. (Note that while many eCommerce businesses currently have one way integration or batch updates, true eCommerce integration is achieved by two-way, real-time or near real-time flow of data.)
Many businesses choose to fully integrate both systems as it means inventory and pricing information is available to customers and staff in real-time and as demand increases the need for additional staff to handle transactions is minimized.