- On November 30, 2021
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- Back-office, connecting, ecommerce, ERP, Growth, Integrating, Integration, online shopping, Retail, SAP, SAP Business One
The benefits of connecting your eCommerce with an ERP can have massive positive effects on your eCommerce business
Believe it or not, over 29 million SMEs in the U.S. are still running on basic financial software like QuickBooks (2) and 55% are still using pen-and-paper manual processes to manage their logistics (3). However, U.S. consumers are projected to spend over $900 billion on eCommerce in 2021, roughly 15% of total retail sales (1), which has placed a massive amount of strain on outdated processes, forcing businesses to expand and adapt at a rapid pace, making tasks like manual data entry a way of the past. Because of this 17.9% increase over 2020 (1), organizations are trading in outdated business processes for more efficient and productive back-office systems like ERPs.
Before I go any further, you might be asking what is an ERP?
Enterprise resource planning (ERP) is software used by companies to manage and automate the important parts of their businesses. This type of software is important to companies because it helps them implement resource planning. This optimizes key business processes needed to run their businesses like production planning, purchasing & inventory, sales & customer management, marketing, finance, human resources, and more with a single system.
Benefits of Connecting eCommerce and ERP include the free flow of communication between business areas, a single source of information, and accurate, real-time data reporting
So, it’s no surprise that 50% of companies are planning on updating, upgrading, or acquiring an ERP system soon (4), especially when it comes to eCommerce. Without the help of an ERP, eCommerce orders are prone to issues like human error. For example, in product misinformation, a customer orders an item, but the item is out of stock. Without the proper communication of inventory to eCommerce, the order gets placed. Now, this once excited customer is consequently disappointed. Mistakes like this are painfully time-consuming and costly but 100% avoidable. According to the National Retail Foundation, returns in 2020 alone cost businesses approximately $102 billion (6). That’s roughly 11% of the total retail sales.
Benefits of Connecting eCommerce and ERP include automating business processes to reduce risk, eliminating dependence on error-prone spreadsheets, and keeping customer service issues from falling through the cracks when they move across departments
- One reason this is important, Shopify found 70%t of customers check reviews or ratings before making their final purchase (7).
Having an ERP empowers your eCommerce to work for you
Using the same example as above, ERPs deliver accuracy when it comes to inventory counting. So, if an item is not in stock the ERP will notify the eCommerce effectively disabling the purchasing of the said item until it’s back in stock. The inventory management that presides in these robust systems is designed to give detailed information, from what’s in stock to where it’s located. This data allows for quick order processing and has shown to increase on-time deliveries by 24% (9) or help replenish your inventory faster, making sure the shelves stay stocked with the right inventory not just when your customers want it but when they need it the most.
- Improving back-office processes like order fulfillment should be a top priority because it ultimately leads to increased customer satisfaction, determining whether or not customers order from you again. Research has shown that even just a 5% increase in customer retention can improve profitability by up to 75% (10).
Benefits of Connecting eCommerce and ERP
- 95% of businesses achieve major improvements after using ERP through reducing process times, increasing collaboration, and centralizing enterprise data (9).
An ERP can be a tremendous benefit to your business, effectively reducing operational costs by 23% and administrative costs by 22% (9). However, not all ERPs are created equally. So, when deciding to integrate back-office systems with your eCommerce by use of an ERP, it’s extremely important to consider these key factors.
- What are your industry-specific business needs?
- What type of budget and timeline do you have in place?
- How flexible of a solution do I need?
- Is the system compatible with the current systems I have in place?
- Will the system grow with me as I grow, is it adaptable?
The last but probably most important key factor is choosing the right implementation partner
For example, Softengine received the SAP North America Partner Excellence Award for 2020 because of its ongoing commitment to customer success. Softengine understands the critical role that ERP solutions play in the success of a customers’ business. Softengine thrives on solving even the toughest business challenges with solutions that benefit their customers in ways that their competitors cannot.