Enterprise resource planning (ERP) is implemented by businesses to manage resources efficiently, keep track of internal business processes, and find new opportunities for scaling. Both offline and online retailers use ERP solutions for business process automation and planning.
eCommerce businesses are particularly interested in implementing intelligent ERP solutions. They integrate these solutions with other enterprise systems to reduce manual work. This process is called ERP integration, and this is what we will talk about in this article.
What Is ERP and ERP Integration?
Enterprise resource planning (ERP) software is a solution for internal data management. In 2022, the ERP market share was valued at $55 billion, and it keeps growing. With the help of ERP systems, businesses keep track of end-to-end data flow and efficiently manage internal processes. The data stored and managed with ERP software can include the client, partner, supplier, product, finance, and other types of data.
Using all-in-one solutions, retail businesses enable effective data management across departments. Data from all departments are synchronized in one digital product. This gives retailers better visibility of the current state of resources.
What Is ERP Integration in eCommerce?
Now, let’s move to ERP system integration. As we’ve said above, ERP systems integration is the process of integrating an ERP system with other systems. It can involve any system that your ecommerce or retail business uses. Here are the solutions you can use to integrate ecommerce with ERP:
- Front-end ecommerce solutions (like an ecommerce site or/and application);
- CRM (Customer Relationship Management) system;
- OMS (Order Management System);
- PIM (Product Information Management) System;
- EDI (Electronic Data Interchange), etc.
Integrated ERP systems are the first step to effective business intelligence. They allow you to keep your data in sync and connect all your data points together.
When Do You Need the ERP Integration Process? 5 Signs
Integration with EPR systems is your way to successful omnichannel commerce. If all crucial data points are kept in isolation, your employees will lack a clear understanding of the supply chain flow. Do you want to achieve maximum accuracy in your business processes and operations? Then you will need to build an effective resource planning system.
Check these 5 signs to understand if it’s the right decision to invest your money in an integrated ERP system:
1. Your employees are overloaded with manual work
To automate business processes and make a positive impact on your workflow, you need to streamline resource planning. Suppose that you got a potential customer who subscribed to your newsletter and created a shopping cart on your ecommerce shop. If your CRM is integrated with an ERP system, the customer data will automatically be transmitted to the latter. Your employees will evaluate the lead, forecast their behavior on your site, and consider these data when making supply-demand predictions. Marketers can use analytics and reporting features of ERP software to facilitate the lead journey. It can help turn site visitors into return clients.
What if your ERP system is not integrated with your CRM systems? Then, your employees will have to enter the data on this lead manually into an ecommerce dashboard. They may forget to do this, enter the wrong data, or even lose data on this user. And this will be equal to losing a valuable lead in this case.
2. You use separate systems that silo data
Disintegrated solutions cannot give you a clear understanding of your business as a single entity. Sure, you may ask your team to transfer data manually from system to system. But imagine how much work they will have to do, with no guarantee for you that these data will be transferred securely and precisely. Your business efforts, after all, are targeted at the end user to encourage them to make a purchase and increase your profit.
In a highly competitive environment like ecommerce or retail, clients don’t want to wait for too long. Cross-system data transfer takes time. During this time, you may fail to give enough attention to a lead, and they might go to a competitor.
3. Errors frequently occur within your business
Retail businesses often suffer from mistakes and errors because of manual data entry. If you face similar problems, you need to connect ERP systems with other pieces of software.
When humans work with tons of similar data, it’s nearly impossible to avoid errors. For instance, such situations happen when your employee enters the wrong customer ID or the wrong product SKU into the system. The wrong data can have a great impact on your marketing strategy and supply chain management. To minimize the number of dissatisfied customers and get a stable position in the market, consider ERP system integration.
4. Your sales funnels don’t perform well
A sales funnel involves the whole path of a user, from being a lead to turning into a business evangelist. Depending on the stage of the client journey, your team can use different systems and business applications to collect and analyze data.
Neglecting some aspects may lead to ineffective conversion on this sales funnel. ERP can help you solve this problem. Cross-channel data integration will help you enhance the client journey. You will lead them smoothly from the stage of acquisition to successful and regular sales.
5. You lack a tool for effective cross-department cooperation
Your departments may perform well if working separately. At the same time, they lack a system where their efforts can be unified under one joint goal.
With an integrated ERP system, you can achieve 100% data consistency for all your departments. Whenever they need to analyze the state of your business from a bird’s eye view, the team will know what to refer to. Stock availability, supply management, inventory maintenance, client experience management — all these aspects will be unified under one roof.
5 Benefits of ERP Integration
If some of the 5 signs relate to your case, consider integration with EPR systems as a way to optimize your data flow and workflow. With ERP systems integration, you will get the following benefits:
- Business automation. In 2020, nearly 63% of businesses adopted cognitive technologies (blockchain, AI, a cloud-based solution, etc.). By doing so, they strived to automate and streamline business processes. Integration with ERP systems allows for automated data flow from one system to another. Enterprise resource planning software integrated with other business solutions will help your team forget about keeping manual data records and managing them inefficiently.
- Data accuracy. This benefit is important in time-dependent situations. Suppose that your client canceled the order. If the ecommerce team doesn’t pass this information to the stock management team on time, the warehouse employees may prepare the order for delivery, spend time and resources on the packaging, and use the wrong order data to plan the restocking process.
- Efficiency. With an integrated ERP system, you reduce manual workload and the number of mundane tasks your employees should daily do. This, in turn, reduces the chances of an error, which leads to higher operation accuracy and effectiveness. Your team may use the time freed as a result of ERP systems integration for more value-added activities. For example, exploring new niches, improving marketing strategy, facilitating user journeys, etc.
- Streamlined workflow. Work-related and business-related data will be centralized in one system. With these centralized data, your team will get a clear view of how one process affects another. With ERP systems integration, you will give your team the space for effective cross-department cooperation. The best practices of one department may be successfully implemented in another department. Such changes will have a positive impact on overall business performance and employee satisfaction.
- A clear vision of your business. By having one source of truth, you get the chance to look at your business from a fresh perspective. This can help you find the gaps and bottlenecks that prevent users from making an order or returning to you after the first sale. Regular improvements based on client feedback will lead to higher conversion and happy clients.
eCommerce ERP Implementations
By 2030, the global ERP software market will be valued at $118 billion. Below, we describe the main types of integrated ERP systems that businesses need. Contact our team if you seek help with any of these:
eCommerce integration with ERP
If you run an online store using ecommerce platforms like Magento or Shopify, you have a big volume of front-end data stored under the hood. By the way, you can check the difference between an ecommerce platform and a marketplace in our recent article. Integration of your ERP with an ecommerce store will provide your internal teams with accurate data on orders, delivery status, client segment, etc. What’s more, your ecommerce store will get real-time data on stock and inventory management that is handled with ERP software.
CRM integration with ERP
To achieve a high client satisfaction rate, you need to make sure that all your departments work well and exchange data with each other. For example, data on the quality and speed of delivery methods collected by your logistics department may have an impact on the overall client satisfaction rate. For data collection, you will need CRM ERP integration. Forbytes can help you integrate your ERP solution with a CRM system and ensure that all your teams work in sync for the common goal.
Project management integration with ERP
Project management software is used to facilitate cooperation and work within a team. Integrate project management software with ERP software and get numerous benefits. You will see how task completion affects your business functions and operations. What’s more, your team will use the insights from enterprise resource planning software to prioritize tasks for a team managed in the project management tool.
EDI integration with ERP
An electronic data interchange (EDI) system is used for exchanging business-related data with external stakeholders. The stakeholders can include partners, suppliers, distributors, and more. The data that are interchanged includes transaction, delivery, supply order, stock level data, etc. But for an EDI system to transfer data across channels, it should pull these data out from the source. ERP platform can be this source of real-time data for EDI solutions.
EAM integration with ERP
EAM (Enterprise Asset Management) solutions are used by manufacturers to keep track of their assets. The latter can be raw materials, hardware and software, vehicles, and other equipment. Businesses that manufacture products themselves will benefit from EAM system integration with ERP. Using ERP, they will streamline their daily activities and use the data from ERP to optimize manufacturing.
5 Main ERP Systems Integration Patterns
The peculiarities of the ERP process depend on the BI software you use and your business processes. But there are some common patterns for ERP integrations, and they can form the ground for your integration strategy:
- Migration. Under this eCommerce ERP integration pattern, data from one system are automatically migrated to another system. This reduces the load on the source system and can affect your expenses if you pay for the on-demand third-party services.
- Broadcast. Under the broadcast pattern, there is a one-way data flow from the main module to multiple systems. The data transfer takes place in real-time – once the main module gets updated data, it transfers the data to other systems.
- Aggregation. This pattern works oppositely to the broadcast pattern. Under aggregation, data from multiple modules is transferred to a single location.
- Correlation. In some aspects, correlation resembles the broadcast pattern. This pattern is active when the datasets are shared equally between 2 targeted systems.
- Bi-directional pattern. This pattern enables bi-directional data flow between two or more datasets. It’s leveraged when two systems use the same data type to fulfill different goals.
Quick 7 Steps for Integration with ERP Systems
- Build an ERP system or find an external ERP vendor that offers secure and client-centered services at a reasonable price.
- Make sure that the vendor provides users with all the necessary features that your business needs.
- When you decide on the ERP software, choose among the ERP integration methods and the pattern for ERP implementation.
- Configure the ecommerce API token that will connect ERP and other systems with each other.
- Set up the data flow algorithm that will determine the rules for the interaction between the two systems.
- Set up the interaction logic for all data pipes and data fields to standardize the data exchange process.
- Automate the data flow and configure the frequency of synchronization.
However, the research shows that nearly 37% of organizations using ERP systems need significant software customization and custom integrations. If you face integration challenges or have difficulties with any of these steps, consider hiring an experienced ecommerce development partner to save the process.
A dedicated ecommerce partner will help you with choosing an ERP system and customizing it to serve all your needs. Contact us if you are looking for reliable and effective ERP systems integration services.
Need Help with Integrating Your Software?
As you see, integrating ERP can bring numerous benefits. If you use multiple business solutions, it’s a must to keep data consistent across all channels. For businesses that scale, manual data entry and management can be too risky.
Forbytes is a recognized ERP system integrator. We have vast experience in ecommerce solution development and integration. Our team teaches retailers how to optimize their processes and keep their data in sync with intuitive and performant enterprise systems.
Contact us if you need prompt help with integrating your ERP software with other systems or building a management solution from scratch.
What is ERP and how does it work?
ERP stands for Enterprise Resource Planning. ERP denotes the process of consolidating data with the help of a software system. ERP is an all-in-one solution for managing business-related data, which includes data on finance, materials, sales, clients, inventory, human resources, business planning, etc. With ERP software, businesses access end-to-end data that helps them manage and optimize their business operations, increase efficiency, and scale.