Integrating your ecommerce with ERP part 1 - What is integration and why integrate?
What is integration?
Integration is basically about getting two IT systems to interoperate, where data and/or logic in one system is needed in the other system. This whitepaper focuses on how to integrate ecommerce with the ERP system.
An integrated solution establishes a secure and reliable connection between the two systems so that they can share data and offer flexible tools to manage the process.
Integration can be done by moving data from one system to another, and storing them there for later use (Batch). More complex scenarios might require direct requests (Live) from the ecommerce to the ERP system, when data and/or logic are needed. Typical examples include if the ecommerce looks up quantity in stock before confirming delivery to a customer etc.
There are several good reasons for integrating your ecommerce with your ERP system. Most important is, of course, generating more revenue through your online channel and optimizing your operational costs.
Main advantages are that you can:
- Deliver a good customer experience by ensuring data consistency across your channels
- Prepare your business to scale and save manual resources for re-entering data that already exist in one system
- Offer better 24-7 customer service
- Eliminate risk of typing errors and inconsistent data
One of the main savings with integration is of course to optimize the resources spent with typically daily tasks like:
- Maintaining product data in the ecommerce solution
- Maintaining price and inventory levels in the ecommerce solution
- Maintaining customer information in both systems
- Calculating discounts, freight, VAT, etc.
- Getting online orders into the ERP system
Integration will partly or fully eliminate the daily tasks associated with tasks mentioned above. So one key questions should be “Is the investment in integration worth it?’
The following is a simple ROI calculation where average costs for handling product changes, orders and customer queries are multiplied with the daily number of occurrences, and an estimated improvement per cent in efficiency is used to calculate the gain.
In this example with the listed assumptions there is a saving of 221,190 EUR every year. The ROI calculation only focuses at the cost savings and not the additional revenue many companies see from ecommerce.