Benefits of ERP Integrations in E-commerce

The annual growth rate (CAGR) of the e-commerce market from the year 2014 to 2029 is expected to be 9.49%, resulting in a projected market volume of US$6,478.00 billion by 2029 [1]. To make the most of the growing e-commerce market, your brand, retail, or distribution business must focus on efficient order fulfillment and ensuring backend operations have a smooth accurate flow.

In this blog, we will focus on the backend operations particularly those related to finance, inventory and supply chain operations, and staff management. Many e-commerce companies rely on Enterprise Resource Planning (ERP) systems to support these listed operations. However, simply implementing them doesn’t result in operational efficiency. You must connect your ERP to specialized e-commerce and inventory management software for optimum results.

ERP software shares some features and common data with e-commerce solutions like Warehouse Management Systems (WMS) and Order Management Systems (OMS). For example, information such as inventory levels, order details, customer data, and financial transactions are details that both ERPs and e-commerce software maintain. But as e-commerce software like OMS and WMS are designed with retail transaction and inventory management in mind, they have automated capabilities to capture, update, and transfer information to systems and platforms they are integrated with, including ERPs.

To really comprehend the benefits of ERP integration with e-commerce back-end software, it is essential to first understand the following:

• What are ERPs?
• What is an ERP Integration and How Does it Work?
• What are the Benefits of ERPs Integrating with your e-commerce software?
• Should You Build or Buy Your ERP Integrations?
• How to Integrate ERPs with E-commerce SaaS Technology?

What are ERPs?

ERP software, such as NetSuite, SAP, Microsoft Dynamics NAV, and Shopify POS, serves as a centralized hub for integrating critical business functions. By consolidating information from production, finance, distribution, and human resources, ERPs offer organizations enhanced visibility and control over operations. ERP software streamlines processes by eliminating redundant systems and data inconsistencies, often integrating modules such as accounts payable, inventory management, order processing, and customer relationship management into a unified platform.

What is an ERP Integration and How Does it Work?

An ERP integration refers to connecting ERP systems with other software for seamless data exchange, improved accuracy, streamlined processes, visibility, and scalability. To implement ERP integrations there are various methods including point-to-point, ESB (Enterprise Service Bus), and iPaaS (Integration Platform as a Service). That said, successful integration requires thorough data preparation, careful planning, and robust security measures.

Here are some examples of how information flows from e-commerce systems to ERP tools:

• During order management, comprehensive order details, including customer information, shipping addresses, billing details, product purchases, quantities, and pricing, are transferred to the ERP software for processing, inventory updates, invoicing, and fulfillment.
• During sales and financial data gathering sales transactions, including revenue, taxes, discounts, and payment details, are transmitted to the ERP system for financial reporting, accounting, and analysis.
• During return and refund assessment information regarding returned items, refund requests, and payment reconciliation for the same are sent to the ERP system to facilitate inventory adjustments, accounting updates, and customer service interactions.

What are the Benefits of ERPs Integrating with Your E-commerce Software?

The integration of ERP systems with e-commerce platforms offers significant advantages for businesses seeking to optimize operations. By aligning these critical systems, organizations can achieve greater efficiency, accuracy, and scalability. Let’s take a closer look at the advantages of ERP integrations in e-commerce to see how they improve business operations:

• Better productivity through automation: ERP integrations automate manual tasks such as data entry, order processing, and inventory management. That way manual intervention is minimized enabling staff to focus on strategic initiatives, which significantly enhances productivity. Consequently, more time can be allocated to customer acquisition and relationship building rather than administrative duties.
• Enhanced visualization of the backend: An integrated ERP provides a holistic view of organizational workflows and specific operational segments. By illuminating bottlenecks and underperforming areas, organizations can optimize processes to drive growth and facilitate rapid response and strategic adaptation to improve performance.
• Real-time data for specific teams: An integrated ERP software can access real-time critical data, including inventory levels, key performance indicators, and financial information. This empowers sales teams to sell more to target customers, production teams to adjust to changing conditions within margins, and executive leadership to make decisions backed by up-to-date business insights.
• Improved payment reconciliation: ERP integrations automate order and inventory data transfers, eliminating manual errors in purchase records and stock quantities shared with administrative departments. These accurate records help brands and retailers selling through marketplaces know what they are owed during each payment cycle despite returns, exchanges, and discounts.

Should You Build or Buy Your ERP Integrations?

Businesses have two primary options for ERP integration, namely in-house development or outsourcing to a specialized provider. Constructing a solution within the organization demands an enormous amount of effort, money, and continuous upkeep. Conversely, partnering with a dedicated integration provider offers pre-built solutions, accelerated implementation, and ongoing support.

Anchanto specializes in providing efficient and cost-effective ERP integration solutions for e-commerce businesses via its SaaS solutions. The technology company’s expertise and pre-built integrations ensure a seamless transition and ongoing support. ERP integration is made easy with Anchanto, a reliable partner in streamlining operations and boosting efficiency.

How to Integrate ERPs with E-commerce SaaS Technology?

The process of integrating ERPs with e-commerce SaaS technology includes:

• Software and business requirement audit: This step involves assessing what ERP or e-commerce software you have or need and the extent of the integration required between them to ensure the uninterrupted flow of data. Also understand what data you want moving between the two platforms, like inventory updates or customer orders, to make sure everything runs smoothly without interruptions.
• Identify if the software can exchange data: For an ERP to integrate with an e-commerce management software, both need an open API (a type of software architecture). Your software provider should be able to validate this so you can determine the integration feasibility.
• Integration planning: Collaborate with the technical team offering the integration (usually the e-commerce software provider) to design the integration roadmap. This will show you the different phases of the integration execution and how the information will flow from the e-commerce system to ERP or vice versa.
• Integration development and testing: Once the integration is developed it will be implemented and rigorously tested to ensure seamless data flow and system performance.
• Go-live: After successful test results, the integration will be made ready and accessible for your business to use.

Conclusion

In e-commerce, cloud-based solutions are the cornerstone of modern, efficient business operations. They help you operate your business with high efficiency and integrate with ERP solutions for data synchronization. Equipping your workforce with the right tools and streamlining operations can deliver exceptional customer experiences and drive sustainable growth. Anchanto’s expertise in ERP integration ensures a smooth transition and maximizes the return on your investment.

Contact us today to embark on your ERP integration journey and experience the transformative power of Anchanto’s solutions.

References:

[1] – Statista.com – eCommerce – Worldwide