The right Enterprise Resource Planning (ERP) solution can make a big difference in how your eCommerce site functions. If you don’t have ERP backing up your eCommerce business, now is a great moment to consider the move. Changes in consumer behavior arising out of the Covid-19 global pandemic are making eCommerce sites busier than ever.
A productive, profitable eCommerce website is one that works well for the customer as well as for the back end people who fulfill orders and keep the eCommerce system running. From inventory to payments, a secure and agile ERP can keep your business organized—catching the little, important details and making sure you are aware of all aspects of profit, loss and functionality of the company. With that in mind, here is a short checklist to help you think through how ERP can positively affect your eCommerce operations.
1) Productivity
Does your eCommerce software make your team more productive? This will come from the underlying ERP system’s ability to integrate with popular eCommerce platforms. Ideally, you can leverage the platform to access data about customers, inventory, sales and shipping. With a good ERP-eCommerce integration, you can reduce manual data re-entry and automate customer notifications. You should be able to automate business process workflows as well. To this end, the entire toolset should be intuitive and easy to learn. Productivity also comes from ease of access. The best ERP and eCommerce suites enable anywhere/any device access.
2) Functionality
ERP functionality will drive eCommerce profitability. For example, a good ERP for eCommerce should support multi-entity corporate structures. This matters because eCommerce may involve transactions between entities with the same ownership, e.g., warehouses in different states or countries. Financial management integration is another area where ERP can make a critical difference in the running of an eCommerce business. eCommerce software tends to be financially isolated from a company’s main accounting system. There are good reasons for this, but in practice this lack of integration can create a lot of work for accounting staffer as well as errors in reporting that impair effective decision making. Integration with the ERP procurement module can have a further positive impact on eCommerce, as it enables optimal purchasing of goods to be sold on the eCommerce site.
3) Technology
Your ERP solution needs to synchronize with your eCommerce website. The results of this synchronization may include reductions in order processing costs and improvements in earnings. As the two systems automatically exchange category metadata, categories and so forth, it becomes easier to automate order fulfillment and transaction tracking. Other technology factors, such as working with a true cloud ERP solution with a responsive design, drive profitability by enabling greater productivity and simpler administration of the entire system. On a related note, an ERP that offers a full relational database provides better reporting and data visualization, along with audits—further contributing to profitable operations.
4) Value
The decision to incorporate ERP into eCommerce needs to pencil out. The value may be intuitively understandable, but it’s still a good practice to work through a detailed estimation of Total Cost of Ownership (TCO) for your ERP solution. The TCO should include a 3 to 5-year calculation of licensing costs along with expenditures for support, hardware, upgrades and hosting. Projected growth has to factor into the cost estimate as well. If you’re doing eCommerce right, you’re going to have more system users, storage and the like as time goes on.
5) Risk
Getting ready to implement ERP in eCommerce must necessarily involve a discussion of risks. Outages and security incidents can disrupt an eCommerce business, so it makes sense to think through where you may be exposed and how you will mitigate the risks you face. For instance, if your cloud ERP vendor offers the option of hosting in multiple geographies, with failover and system recovery, that’s probably a good path to follow. However, even with cloud ERP and the delegation of most system administration to the cloud vendor, a great deal of security is still your responsibility. This includes securing your data and controlling access to the system.
Get the Full eCommerce Readiness Checklist
Going online means more than just putting up a website. It means providing secure payment options, managing inventory, and more… while tying everything seamlessly into your financials. Use this readiness checklist to help you identify how your ERP should interact with your eCommerce site to give you more control and profitability. Click here to download now.
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