How ERP and eCommerce Integration Are Essential in 2021
In case you haven’t noticed, eCommerce is growing. In 2019, an estimated 1.92 billion people purchased goodsor services online. The 2020 global pandemic only accelerated the move to more online purchases and in 2021, B2B eCommerce is expected to top$1.8 trillion. But, if you’re reading this article, it’s probably because you already know eCommerce is growing, you’re just trying to figure out the best way to catch and ride this wave.
For 2021, one of the most essential tools for success in the digital world will be an ERP integration with an eCommerce platform. If you haven’t been thinking about ERP and eCommerce integration, here’s what you need to consider.
Eliminate data silos
The best decisions are data informed. But in many organizations, data is treated as a source of power. When your ERP and eCommerce platforms are integrated, you prevent the creation of data fiefdoms and silos.
The information decisions makers need is easily accessible and digestible because it flows throughout the architecture. Reporting is much easier and decision makers have confidence in the accuracy when they know data is integrated.
Improve customer experience
If anything will define eCommerce success in 2021 it will be customer experience.
Business is concentrating on improving the customer experience because that’s where buyers are most concerned. In fact, 86% of buyers are willing to pay more for improved customer experience. It’s now the key differentiator, even over price.
And when you integrate ERP and eCommerce you can vastly improve the customer experience. Give shoppers the real time insight into information they want like inventory levels and shipping estimates and they reward you with repeat business. Customer experience is just that important in 2021.
Integration can put the customer in the driver’s seat when it comes to delivery options, so they get what they want when and where they want it. With data flowing from the eCommerce site where the order is placed through the ERP to warehousing and shipping, it’s possible to deliver this type of experience.
Increase back office efficiency
ERP integration with your B2B eCommerce platform improves back office efficiency as well. To start with, customers perform data entry for orders – not your employees. That frees customer service and sales staff to spend time on activities that add value.
In addition, those orders flow automatically from the website to the ERP. From there, they may flow to a WMS product or even a 3PL solution. The point is, with integration data flows, it isn’t entered over and over again.
And when the filled order and shipping information flow back from the ERP to the eCommerce platform, customers get the self-service experience they want. They can log-in to their account and check order status and shipping all without calling or emailing you. Once again, customer service doesn’t field calls or emails looking for tracking. Instead they focus on high value, non-routine activities that require a human touch.
Another efficiency occurs when integration triumphs over compartmentalization. When each business function compartmentalizes its own rules and operations, the organization as a whole is inefficient. It’s difficult to cross-train across departments and collaboration is difficult. Integration supports a cohesive company-wide system and this in turn supports a more unified company culture.
Automate accounting tasks
With eCommerce and ERP integration, its possible to automate accounting tasks. Prepaid orders are created in the eCommerce website and then flow over to the ERP where sales orders are issued to the warehouse, pick tickets and packing lists are generated, invoices created, and payment posted all automatically. Now that’s automating your accounting! The inventory is adjusted, and cost of goods calculated while the tracking information flows back to the eCommerce website where it’s accessible by the customer.
Sure, your ERP is going to make the calculations and create the journal entries anyway, but with integration it all happens automatically.
And if you sell on terms, integration makes billing and receiving payment easy as well. Orders flow from the website to the ERP and can be billed automatically. If you offer a payment gateway, customers can log-in to their account and pay invoices. This data transmits back to the ERP and posts the payment automatically.
Accounts receivable staff focus on aged accounts where their attention is needed.
It’s possible to further automate accounting by integrating a third-party credit approval or factoring solution with the eCommerce platform to capture data that then flows to the ERP.[adsense]
Eliminate data redundancy and human error
The fewer times data is entered, the fewer opportunities for an error. By transferring the customer-entered order data from the eCommerce platform through the ERP to order fulfillment, you increase order accuracy and decrease order problems. Since problem solving is a human resource intensive activity, you actually save time and money. Any time you can reduce the possibility for human error you are going to come out on top.
Integration also reduces data redundancy. Instead of duplicate data being entered and stored in multiple locations, data can be entered once and then flow to every other place it is required.
In complex systems it’s easy for minor transactions to be missed. If the ERP and eCommerce platform aren’t integrated, entering orders after the fact may become the routine workflow. And if the task is a low priority, your financials can be weeks in arrears.
Also, if your ERP and eCommerce aren’t integrated, your sales may not be priced accurately. Changes to supplier prices or exchange rates can automatically be reflected in the eCommerce pricing engine if the two systems are integrated. When new RFQs are received, the new supplier prices are automatically considered by the algorithm or pricing rules.
In addition, a not so small benefit of more accurate financial reporting is more accurate tax returns. Reducing the likelihood of errors in financial reporting reduces the chances that the data you report to the IRS won’t be accurate.
Simply the Complex in 2021
2021 will have enough challenges of its own. Simplify your business, improve efficiency, reduce errors, and produce more accurate reports with a unified ERP and eCommerce integration.
You’ll face the challenges with accurate data to make better decisions, more complete information to create more effective marketing campaigns, and the confidence that comes from operating from a single source of truth.