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February 27, 2017

How to Identify if you Need Automated
E-commerce and ERP Integration?

Author Vishnu
This blog was first published on MSDynamicsWorld.
Proactive, Reactive or Inactive – What would you rather be?

  • Proactive, by identifying and addressing problems before they affect you
  • Reactive, by looking for a solution only after the problem starts affecting you
  • Inactive, by dismissing the problem as a no problem that needs immediate attention

We have time and again been asked by businesses how to identify if they need e-commerce and ERP integration. The answer to that depends on how you see yourself or your business – Proactive, Reactive or Inactive. Let’s explore some of the practical implications of each approach

5 Signs you Need Automated E-commerce and ERP Integration for PROACTIVE business owners

1) Your Order Volumes are on a Rise
Your e-commerce store has been a huge success and your order volumes are on the rise. But how can increasing order volumes be a problem?
Increasing order volumes are not the problem, but rather, it is the way you handle the increased volume. The orders received from the e-commerce store have to be transferred back to the ERP system for fulfillment. You might be manually transferring the orders from e-commerce to ERP.
That approach might work well for you when the order volumes are low, but as order volumes rise, the manual transfer might become difficult to manage.

2) Your Product Catalogue is Evolving
Is your product catalog very dynamic?

  • Do you keep adding or removing products?
  • Do you often modify/ update your product descriptions?
  • Does your products price change frequently?

If you answer yes to any of the above, then where do you manage these updates – ERP, e-commerce, or a third system? Regardless, you will have to sync updates to all the other systems. While this can also be managed by manual data transfer, the frequent updates might make the process expensive and prone to errors.

3) You Sell (or plan to sell) Across Multiple Channels
Selling across multiple channels is the need of the hour. Your customers expect you to be present and provide a consistent experience across channels. You can easily extend your e-commerce systems to sell across channels like online marketplaces and social media.
However, as you add more channels to your sales ecosystem, you will have to ensure that product and inventory information is consistent across all of them. Not only that, your order volumes are also bound to go up. We have already seen how increasing order volumes and product information updates can get difficult to manage with two systems, e-commerce, and ERP.  Imagine the complexity as you add more systems/ channels.

4) Compliance is Key to keep your Business Running
Not all businesses operate in an industry with strict regulatory and compliance rules. However, accounting and sales tax compliance is necessary for most businesses. In the context of e-commerce, sales tax compliance can be a big challenge with multiple parameters influencing it and frequent changes.

How do you then ensure that both e-commerce and ERP systems have consistent information at all times? And have you faced the real impact that failing to maintain consistent information can have on your business?

5) You Believe in Making Data-backed Decisions
Are you a big fan of data and a believer in the role of data in the decision-making process? If yes, then you probably already understand the importance of accurate data. Your e-commerce and ERP are two critical systems that contain a lot of data. They contain information that will help you take decisions from inventory procurement and sales forecasting to marketing and promotional offers.
Now, imagine taking these business-critical decisions based on inaccurate and inconsistent data extracted out of disconnected systems or systems synced using error-prone, manual data entry process.

7 Signs you Need Automated E-commerce and ERP Integration for REACTIVE business owners

1) There are Delays in Order Fulfillment
Have you started to witness delays in the order fulfillment process? Is your order aging report starting to indicate an increase in the time it takes to fulfill an order? If yes, then it might be time for you to implement e-commerce and ERP integration.
As your order volumes rise, manual transfer of orders from e-commerce to ERP can limit your business. You will always be constrained by the number of orders your resources can manually transfer between the two systems. This can greatly increase the time it takes for you to fulfill your orders. In a time when businesses like Amazon are talking about same day delivery, imagine what these delays can cost your business.
Alternatively, you could hire more resources to support the increased order volume – a step not recommended for multiple reasons.

2) Increase in Losses because of Manual Data Entry Errors
How many orders, recently fulfilled, had one or more errors – from orders shipped to wrong address, wrong products, or quantity of product shipped to customers to issues because of incorrect pricing of products. Are you seeing a rise in such cases? If yes, then it is probably time to invest in an automated e-commerce to ERP integration solution.
Manual data transfer (of orders, product, inventory, customer, etc.) is an error-prone process and these errors can leave a big hole in your pocket. Financial loss aside, these errors also have a huge negative impact on your customer experience.

3) Inventory Management is becoming a Challenge
Often, effective inventory management is cited as the most critical aspect of e-commerce success, so much so that it can make or break your business. If you have started to see a rise in cases where your products were oversold (sold when the product is not in stock) or cases where your e-commerce store shows a product out-of-stock when you have plenty of inventory in the warehouse, then you are suffering from poor inventory management.
What you need is a setup that can guarantee you updated stock levels across channels (e-commerce, online marketplaces, social media, ERP, etc.) irrespective of the time of the day. E-commerce and ERP integration makes this possible by integrating the two must critical systems of your business. Moreover, integration will help you raise timely purchase orders when your inventory level goes beyond a certain level.

4) Increase in Number of Customer Service Calls
If you start seeing a rise in the number of customer service calls inquiring about order or shipping status, or information that can be easily made available online, it is time for you to invest in a self-service customer portal.
You can very easily extend your e-commerce store to act as a self-service customer portal by integrating e-commerce and ERP systems. This will ensure that your customers can access order status, shipping status, inventory levels, order history, etc. directly in the e-commerce store. This can greatly reduce the load on your customer service team and let them focus on things more critical.

5) Customer Experience is Going South
Declining customer experience does not happen in isolation. The reality is that it is a consequence of everything we discussed above (delays in order fulfillment, order fulfillment errors, backorders, lack or self-service customer portals). However, for some businesses, this is what it takes them to stand and take notice.
According to White House Office of Consumer Affairs, news of bad customer service reaches more than twice as many ears as praise for a good service experience. With improper/ delayed order processing, shipping to the wrong address, disjointed communication, etc. you are ticking off all the wrong boxes.

6) Your Operational Expenses are on a Rise
Businesses often compensate for the lack of an automated e-commerce and ERP integration by hiring resources to manually transfer data between them. This can dramatically increase your operational costs. With e-commerce and ERP integration, you can further automate your businesses process in ways that are not possible in manual data transfers. This further adds to the overall operational inefficiency and costs.
In addition, your costs also go north because of increases in customer service calls (which requires you to add more customer service resources).

7) You are Missing Key the Key Triggers for Decision Making
Did you just realize that a particular product was out of stock? Triggers like low inventory level (to raise a purchase order) and more can be very easily missed in a disconnected environment. If you start noticing a trend where you are spending more time firefighting or reacting, then it is time for you to act. E-commerce and ERP integration can help you identify and automate these triggers helping you focus on growing your business.

1 Sign you Need Automated E-commerce and ERP Integration for INACTIVE business owners

1) You are Losing Business to Competition
Despite offering the best products, spending extensively on marketing and promotions, and witnessing good site traffic you do not see any major improvements in your bottom line. It is high time you get to the root problem before it is too late. Lack of an e-commerce and ERP integration might be hurting your business.

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