E-commerce growth areas: Efficient processes and success with an ERP system

Retail is increasingly moving into the digital world. The e-commerce sector has been booming for years. Low entry conditions are both a curse and a blessing. It is not easy to keep up with the competition and offer customers a unique shopping experience. For a company to be successful in the long term, it needs efficient processes. An ERP system can help to manage all business processes across departments and functions via a centralised application. It ensures transparency and uniform behaviour in e-commerce companies. In this blog post, we explain what an ERP system is, how it supports companies and what advantages and disadvantages it has.

What is ERP software?

Efficiency and transparency are the keys to success in e-commerce. Multi-purpose enterprise resource planning (ERP) software can do just that. ERP describes the entrepreneurial task of utilising all available resources as efficiently as possible. ERP software enables companies to plan, control and monitor all processes centrally. All processes are digitally mapped and collected in a central database. This allows processes to be greatly simplified and set up across departments.

An ERP system must have certain features in order to optimally support an e-commerce business. The first task of an online shop is to deliver the product to the customer as quickly as possible. Customers prefer to see information about their status in real time. For this purpose, it would be practical if online transactions could access data from the merchandise management system. The system has access to the stock and can immediately transfer orders for picking. In addition, invoices can be created and sales posted immediately.

Another useful feature of an e-commerce business is customer relationship management. Every service provider should strive for excellent customer service in order to stand out from the competition. A CRM system can help with this. All customer data is stored there, including previous purchases. Thanks to the direct connection, employees can see when the customer places an order and can immediately give the best advice and make an additional offer if required.

Document management systems, or DMS for short, can also be integrated directly into ERP systems. The system centralises all company data. For example, created invoices are automatically assigned to the corresponding archive folder and saved there.

Are ERP systems in e-commerce worthwhile for me?

There is no generalised answer to this question. ERP can simplify many processes, especially for online transactions. Those who want to sell online usually use their own online shop. Incoming orders, stocks and invoices are usually initially entered manually in Excel spreadsheets. But what if the shop were more successful? Let’s assume we are the owner of an online shop. We constantly transfer up-to-date data and enter it into the form. Many orders are processed within a day. We can hardly keep track of everything because each order has to be synchronised separately with the warehouse. It takes time. A product may soon be “sold out”, but customers will still order it. This leads to long waiting times and dissatisfied customers. As this example shows, a large increase in incoming orders and customers can be a real challenge. Various manual systems and lists are no longer sufficient. The consequences are delays in data maintenance, a lack of transparency and a general lack of understanding of the business. Errors crept in and it was too late to react to violations and market changes.

With an ERP system, these steps look different. The ERP system retrieves all the necessary customer data and stores it in a large database. At the same time, it automatically checks whether the product is in stock. After approval, the product is actually held back without any time or labour input and the information is sent to the people responsible for shipping. A packing slip and a shipping label are also printed. Everything happens in real time without human intervention. At the same time, stock levels in the system are reduced and production can be reminded to produce more goods. Especially if you are an omni- or multi-channel retailer and therefore sell products via different channels, the complexity of these processes increases, which often makes an ERP system indispensable.

Whether an e-commerce company should ultimately use an ERP system depends on many factors. For example, the complexity of the integration task or the financial scope of the project.

When does it make sense to use an e-commerce ERP system?

Product range and front-end design alone do not make an online shop successful in the long term. The areas that customers do not see are at least as important. Without a strong backend, it costs time and money. The motto is to work with the ERP system as early as possible. By relying on an ERP system right from the start, you can set up your shop in a scalable way from the outset and save yourself the work of future conversions. ERP affects data and the time you spend importing and exporting data, manual routines and troubleshooting. The interaction of these processes determines how quickly and punctually customers receive their orders, how targeted marketing campaigns are planned and how well the networking of different sales channels works. Developing an online shop without an ERP system can cause some problems that create new challenges.

An important milestone is the growth of order transactions and sales channels. The ERP system is optimised to process large orders securely and quickly. Automated processes for customer orders enable more efficient processing, which means that goods reach the customer faster. Orders are automatically imported, compared with the inventory and synchronised. This allows you to connect not only your online shop, but also retail shops and online marketplaces. Automatic data import and management saves a lot of time and provides an overview of all transactions in real time.

As awareness of the online shop increases, more orders are placed and the need for an extended product range increases. Product management can be simplified with an ERP system. For example, price adjustments can be easily automated with ERP. All master data is maintained in one system and synchronised for all sales channels.

Manual storage often leads to errors. They increase when business grows and stock levels rise. Stock-outs and delivery errors can endanger the financial success of a company. ERP systems provide a real-time overview of stock levels and coordinate incoming and outgoing goods. Which items are in stock and which are not? With ERP, you can always find the answer. In addition, work in the warehouse can be automated with barcode readers or rush orders from target customers can be processed. Automated processes shorten delivery times and reduce delivery errors. Your customers will appreciate it.

It can be difficult to see your business in real time when the chaos of manual administration takes over. ERP software has visual dashboards and integrated reports that provide a high level of transparency in the transaction process. The ability to analyse at product, order or customer level boosts business. With ERP, you can understand risks, recognise opportunities and make informed decisions for the future.

In addition, various independent stand-alone solutions are being replaced by the use of ERP systems. Stand-alone solutions have various disadvantages. Especially if the shop appears on different channels. ERP solutions can manage different shop systems and online marketplaces in parallel. The work of employees is also made easier. ERP solutions are becoming the key for companies. The ERP system thinks for itself, synchronises all sales channels, automates shipment management and connects all business areas. In addition to the comprehensive overview, you have more time for company growth, brilliant ideas and new business areas.

Advantages and disadvantages of ERP systems in e-commerce

An ERP system can be seen as the centrepiece of an e-commerce company. In the long term, it improves company performance, ensures greater transparency and faster growth. However, ERP system decisions can also entail risks. We have summarised all the advantages and disadvantages of using ERP software for e-commerce.

How do you integrate an ERP system into an online shop?

There are various ERP systems, cloud solutions and on-premise solutions. If you decide to use the software, it is important that customisations and services are available and that it has high security standards. A target/actual analysis is recommended for decision-making. Which optimisations are important? How do you want your company to develop in the future? What resources should be allocated to the integration? It is important to understand the requirements that the system must fulfil. This can be achieved by drawing up a specification sheet. Only by carefully analysing the actual and target situation of the company can the problem be identified and the objectives of the ERP implementation determined. Regardless of this, the future collaboration between ERP and online shops will be seamless. ERP records orders, customer data and all other order information from online shops. On the other hand, shops receive information about products, prices or tracking information.

Conclusion

If you want to get into e-commerce, you should connect your shop to an ERP solution. In online retail, you have your hands full, orders come in, you prepare the dispatch and returns. ERP systems can help. They save time, costs and effort. They simplify many work steps that would otherwise have to be done manually and enable companies to take a highly networked approach. The automation of all business processes in e-commerce is the basis for faster handling of processes, increasing customer satisfaction and strengthening competition while utilising economic resources.

SelectLine in conjunction with SyShop offers you a shop system with a direct ERP connection.
You can find more information about SyShop here. If you have any questions, you can also call us, we will be happy to advise you!