Enterprise resource planning (ERP) systems now hold a prominent place in the tech stack of any enterprise, enabling organizations to consolidate data from different sources and thereby control and optimize various internal business processes. According to the 2021 ERP Report from Panorama Consulting Group, 96% of enterprises that implement ERP solutions report improvements in operational efficiency, 85% note increased visibility, and 68% say that their ERPs have a positive impact on their business growth and competitiveness.
E-commerce companies are those that can benefit from ERP adoption the most. Applying ERP for ecommerce, merchants can not only manage their logistics, payments and inventory but also automate sales processes, which is especially important for establishing a successful omnichannel business.
Itransition believes that ecommerce enterprises can reap even more benefits from their corporate ERP systems by integrating the latter with other business software solutions. Here are some ERP integration options enterprises may consider.
Sales Channels
By integrating ERP systems with mobile and online stores, merchants can establish seamless data exchange between the back-office and existing e-commerce channels. Given that ERPs primarily serve as centralized data hubs, such integration may become especially important if an enterprise opts for omnichannel commerce since it can help provide a seamless customer experience across all key touchpoints.
For instance, inventory data from ERP will be integrated with all enterprise sales channels. This way, merchants can avoid situations where a person orders a product that is out of stock and which might lead to losing this particular customer. Vice versa, with such an integration, when a customer makes a purchase, this is reflected in the ERP. Due to the integration, the software solution can now automatically adjust information about the remaining stock across merchants’ warehouses.
Also, the integration between ERP and e-commerce allows enterprises to reduce or even completely avoid errors associated with manual data entry. Since the ERP system automatically receives all data about customers’ orders, the terms and conditions of delivery and customer personal data, it can help organizations mitigate risks typically related to the human factor.
Apart from that, it is also worth noting that customers are among those who can directly benefit from the ERP and e-commerce integration. For example, a merchant can implement a notification feature so that its ERP will be able to inform the customer via the website or mobile app about the status of his or her order, as well as notify them in case the delivery is delayed.
Finally, integration between ERP and e-commerce will give a merchant more control over the business and increase its overall transparency and visibility. In particular, if an ERP has a built-in analytics module, such a system can gather data from sales channels to generate reports on business profits, losses, the total number of transactions and cash flows. Thus, merchants can always have the necessary information on their hands and be able to determine the most successful sales channels and, if necessary, adjust the company’s strategy.
Product Information Management (PIM)
While ERP systems process tons of information related to merchants’ back-office operations, such solutions are not tailored to processing and managing customer-facing content such as product descriptions, images and videos. For this reason, integration with a PIM system may come in handy. After all, these solutions are responsible for collecting and storing data and content required for promoting and selling companies’ products.
Therefore, if their ERPs and PIMs are in sync, enterprises can enrich product data with details such as colors, graphics and prices and automatically distribute this information across all sales channels. For example, now sales reps can check both the availability of a particular product and view related marketing data in just a couple of clicks, which may result in better customer communication and more closed deals.
Human Resource Management (HRM)
Typically, ERPs provide many capabilities for handling various business tasks, whether it is finance, warehouse or supply chain management. Additionally, ERPs may contain modules that cover business functions related to human resource management. However, even if an existing ERP does not yet provide the proper functionality, a merchant does not necessarily have to spend time and resources developing HR-related features. Instead, developers can simply integrate ERP with an existing HRM solution.
With this integration, enterprises can enable their employees to use ERP for all aspects of HR management, from recruiting to performance analysis and payroll calculations. Moreover, this way, HR-related data can be easily accessed by all enterprise departments, which will help streamline its internal workflows and improve collaboration even among multiple distributed teams.
E-Commerce CRM
Essentially, ERPs and CRMs fulfill the roles of data repositories, critical to the growth and development of an e-commerce business. While data from an ERP enables monitoring a business’s overall health and performance, a CRM focuses on managing and optimizing customer interactions. However, enterprises can integrate ERP and CRM to improve both these business aspects.
Thanks to this synchronization, support, marketing, sales or other departments who use CRM in their day-to-day work can quickly access ERP data (for example, information related to order statuses) to personalize communication with customers and provide higher quality service. In addition, the access to information about the numbers of sold products and completed transactions may enable a sales team to make better forecasts, for example, when predicting the future demand for specific product types.
Business Intelligence (BI)
Considering that ERPs accumulate lots of data related to the internal processes of enterprises and their customers and suppliers, it would be unreasonable to leave all this information as is. After all, such data may be the fuel, enabling merchants to continually generate strategic business insights and become more competitive. Integration between ERP and business intelligence software allows organizations to fill this gap easily, and here are some examples of how this may work in practice.
With an ERP/BI integration, a company can apply machine learning (ML) to analyzing the ERP data and finding hidden data patterns, thereby uncovering more opportunities for improving business processes, operations and supply chains. Furthermore, in case corporate BI software is equipped with natural language processing (NLP), a company can develop a chatbot that would generate data-based reports with a simple voice command. This way, if some employees need to receive detailed sales statistics about specific digital channels, they can ask the chatbot, and the latter will quickly provide the answer.
Final Thoughts
An ERP solution is indeed a potent tool for any e-commerce business. Using this type of software, merchants can manage finances, inventory and logistics and handle many additional operational tasks. Nonetheless, by integrating ERP and other software systems among a technical stack, a merchant can expand the functionality of its existing ERP solution quickly, thereby further increasing its business value and efficiency. In particular, developers can link an ERP to the company’s sales channels, PIM, HRM and CRM software, thereby creating a more cohesive and robust e-commerce ecosystem.
Roman Davydov is Ecommerce Technology Observer at Itransition: Software Development Company. With more than four years of experience in the IT industry, Davydov follows and analyzes digital transformation trends to guide retail businesses in making informed software buying choices when it comes to commerce and store management automation.
