Enterprise resource planning (ERP) is the way a company integrates the core parts of the business to work in harmony. It is essentially a system that manages data from main areas such as inventory, purchasing, sales, planning, finance and marketing. By having real time data of all these sectors, the company resources are used more efficiently.

This approach has been heavily adopted by manufacturing industries where everything has to work synchronously. If the sales increase and inventory is depleted, the finance and purchasing departments allocate resources for raw materials to be bought. Streamlining the business greatly cut costs and improved product delivery for the manufacturing companies. A number of enterprise resource planning software have been produced to cater for this need.

Enter the digital marketplace

In the mid-90s, people realized that they could sell stuff on the Internet. Bigwigs like Amazon and eBay were started around the same time and since then eCommerce has really changed how people do business. It is estimated that by 2020, 40% of all shopping in the U.S will be done online. Online shopping appeased millions due to the convenience it offered. Sure enough, many vendors, both retailers and manufacturers started setting up online stores to capitalize on this market.

A brick and mortar company would have an online store at Amazon or eBay to increase sales. Small businesses sprouted and sold directly on marketing platforms. Soon enough, having an online presence was enough leverage for small businesses to compete with big companies.

The problem

Now that businesses are selling their products online, sales are increasing and everything’s going fine, right? But there’s an elephant in the room. Selling online becomes a totally new business and resources are split in the middle. Data from order, customer, inventory, item and shipping and tracking needs to be collected and updated. Integrating information from the website to company records becomes difficult.

These activities are usually tracked manually in the factory and as the products leave the warehouse for distribution. Now more staff have to be assigned to tracking and recording this information from the online sales. This is where an ERP for eCommerce companies comes in handy;

ERP for online businesses

Integrating online activity from the website into company data does a lot of things. If your company already has a working ERP, you only have to synchronize the online data with your existing ERP. Doing this maintains a status quo where you know how every sector is doing. Manufacturers can still benefit from customer feedback from online customers. Online vendors also stand to benefit a lot from integrating business activities.

These are people who rely on traffic from blogs, social media, search engines etc. to buy from their website or online shop. Having an ERP will track customer purchases and you will know which blog posts, keywords and media attract more customers to buy from you. Thus, your marketing campaign can benefit from this data hence integrating marketing and sales.

Starting a whole new ERP for your online side of business will be a long process. And not forgetting how it can disrupt business and cause a lot of shifts in management and human resource.Manually keying in information can be tiresome and wastes resources.

Updating item information from spreadsheets to the website is cumbersome. The fact that many eCommerce businesses have multiple channels e.g.Amazon, Shopify and Magento only makes this harder. An online ERP software is needed for collecting this data and relaying it to the main ERP. With an eCommerce ERP link, fulfilling orders becomes easier and product details and pricing are done from one point. Which methods can you use to implement an eCommerce ERP?

What are my options?

· Point to point integration

This is the most popular type of ERP integration. Basically, the sales website or channel you are using is pointed to the ERP and data is directed to your systems. There is no operational activity in between. This type of integration software is affordable and easy to implement making it popular. However, the architecture is very rigid and upscaling the system to accommodate growth is difficult. It is a good option for small businesses that aren’t experiencing rapid growth.

· Multichannel management

A platform is used to manage different channels for online sales of one business. It is a cloud-based ERP where real-time data about all the channels are integrated into the ERP. Unlike point to point, there is an operation hub in between the eCommerce and ERP. Pre-built connectors are used to integrate multiple channels.

· Custom ERP integration

Software exists for companies who prefer a custom eCommerce and ERP integration. They use an API (application program interface) to map out data flow and create a unique system which integrates online sales with backend systems. This is more feasible for a bigger company or one that has established sectors.

· Enterprise Service Bus

A new addition to ERP for Ecommerce companies, the Enterprise Service Bus (ESB) works as an intermediary. It is almost the same as multichannel but is an abstraction layer built to be independent from other applications. It decouples the ERP system reducing dependencies and is best suited for real time data.

Benefits of integrating eCommerce with ERP

1. Streamline business activities- Integration can help in streamlining activities such as inventory, updating inventory levels for customers and sales tracking.

2. Customer satisfaction- Having an integrated eCommerce business can help you be in touch with customers e.g. notifying them of shipped orders, reliable tracking and handling customer complaints

3. Easy to update information- Changes on pricing, product information and inventory levels can be easily updated.

4. Flexibility – You can sell items through different channels and even add a channel while still maintaining the operational efficiency of the brick and mortar establishment. Also, an increase in the volume of orders can be handled without deploying extra manpower.

5. Tax regulations – Paperwork is very important for tax and legal issues. With an integrated ERP for eCommerce companies, tax compliance is automated hence run-ins with the law are avoided.

An integrated ERP might be what your business needs to improve on efficiency. Branching into online sales is a bold but rewarding move. It can make a lot more sales for your company and you don’t need to hire more personnel. That’s the beauty of ERP applications for eCommerce businesses.