eCommerce and ERP Integration: Getting Started

Mark Canes

Consumers have come to expect pricing and inventory information from retailers in real-time, so having a quality eCommerce website is increasingly important.  eCommerce provides a channel for customers to access information and purchase products 24/7, 365 days a year and has potentially huge implications for increasing sales volumes for both B2B and B2C companies.  However, many companies fail to realize that having a strong front-end eCommerce site is useless without integration with a strong back-end ERP system.  In order to be successful in an online marketplace and to keep up with increased demand, your eCommerce strategy must include proper inventory management software. The best approach to Getting Started with eCommerce is to implement a fully integrated eCommerce and ERP solution as a joint project.

The information contained in this blog post is a high-level summary of the information that can be found in our eCommerce ERP Integration Guide.  For more detailed information download the guide.  

ERP eCommerce Intergration GuideB2C and B2B eCommerce differ: in the B2C industry, companies are selling directly to the end consumer using an Amazon-type interface and with B2B, businesses are selling to other businesses either through Amazon-type stores, or more frequently through online web portals.   Many other aspects of eCommerce are quite similar between B2B and B2C, and only certain website features may vary.  But before beginning to assign valuable resources to an eCommerce and ERP integration strategy, companies should first determine if they are ready for eCommerce by answering the following questions:

  • Does your company have the time to set up and manage an eCommerce site? Will you need to hire additional people or outsource the management of your eCommerce store to a third-party?
  • Does your company have the budget to implement a fully functioning, competitive website?  Costs can vary greatly depending on the needs of your business. 
  • Does your company have a fully robust ERP system to deal with the back-end processes as demand increases? A reliable back-end ERP system will help automate processes such as inventory management, replenishment and customer invoicing.
  • Is your company prepared to treat eCommerce as a separate business?  One of the biggest mistakes companies make is not treating eCommerce as a separate business with its own staff, reporting, marketing strategy and budget.

After you’ve adequately addressed these questions, the next step is to decide which eCommerce platform to use.  This can be difficult, as there are over 500 platforms with “shopping carts” in the midmarket to choose from. Therefore it is important to determine what platform features are most important to your company.   Aspects to evaluate include:

  • Design flexibility
  • Degree of ease/automation with Search Engine Optimization (SEO)
  • Level of support for multiple category and product templates
  • Source code
  • API documentation
  • Number of payment gateway options and shipping provider integrations
  • Size of the user community

Before deciding which eCommerce platform to implement, you’d want to evaluate your ERP system and its ability to integrate with each potential platform.  This may mean you need to update your existing software system, but the benefits of having the two systems integrated will almost always outweigh the costs.  Some benefits include:

  • An automated eCommerce inventory management system, where, as orders come in from the web store inventory levels are tracked and updated automatically and any changes made in an inventory management system will be automatically reflected online. This will prevent you from “selling” products that you cannot deliver.
  • Automatic notifications to customers - an integrated system can automatically notify customers when orders have been shipped and allow them to track the delivery of products. 
  • A reduction in errors and the need for manual workarounds as demand increases, through automated processes.
  • Simplified price changes to inventory such as quantity or promotional discounts.
  • Increased order volume and decreased costs as customers can purchase more products, more often without the need for additional staff to deal with maintaining accurate inventory data and processing transactions.
  • Secure, online credit card transactions.  
  • Cheaper shipping through an ERP system component that determines the cheapest shipping method/carrier on each order.

As with any project, especially one as big as an eCommerce and ERP integration, there is a cost of being successful – setting up an eCommerce site is comparable to opening a new bricks and mortar store, and the costs will reflect this. In addition to licence fees and development costs, there are many other costs to consider, like:

  • The cost of financial transactions
  • The cost of hosting and security
  • Interface and architecture costs
  • Marketing costs
  • Customer relationship management costs 
  • The cost of integrating with ERP software

eCommerce is a business strategy not to be ignored by companies aspiring to grow and be successful in most markets today - and having your eCommerce fully integrated with an ERP system is crucial to being successful online.   The above information should be helpful for getting started with eCommerce and understanding the investment of time and resources needed to get set up properly online.