Retail businesses have always juggled various tasks, like sales, marketing, manufacturing, supply chain management, inventory management, financial management, and customer relationship management. Until recently, these duties were typically handled à la carte, with core information kept in individual data silos. If your marketing director needed production data from the factory floor, they’d usually have to wait for it—assuming they received it at all.
These inefficiencies have been upended by enterprise resource planning (ERP). ERP systems collect company-wide business data and store it in a single shared database accessible to all relevant stakeholders, making these systems perfect for multi-department ecommerce businesses. In an International Data Corporation report surveying global leaders, 73% of companies consider breaking data silos and fostering better internal communication and collaboration to be very or extremely important. An ERP system integration can help your business achieve that.
What is ERP ecommerce integration?
Enterprise resource planning (ERP) ecommerce integration is the process of connecting and synchronizing your ecommerce platform with an enterprise resource planning system. Ecommerce ERP integration allows your team access to all data that you collect while running your online business, including product designs, supplier information, branding guidelines, customer experience guidelines, market research, customer data, and sales reports. In other words, ERP systems house all your data under one digital roof.
By providing wide-ranging access to valuable data, ERP system integration can make it easier for team members to collaborate between disciplines and strategize across departments.
How does an ERP ecommerce integration work?
ERP ecommerce integration works by consolidating data from all your ecommerce business processes—product design, sales, marketing, inventory, customer relationship management (CRM), and more—and storing it in a comprehensive, easily sortable database.
ERP ecommerce integrations replace much of the manual data entry that used to come with business upkeep. In the past, you might have had to photocopy sales ledgers to distribute to different departments—or at least email documents back and forth. By automatically syncing data from all your operations, ERP integration provides the most up-to-date information across your entire organization at all times.
However, this doesn’t mean that all company data goes to every person or department in your organization. Each can have a personalized ERP portal granting them access to the data relevant to their work and security clearance. This prevents, say, an unvetted contractor from gaining access to trade secrets, while allowing a product engineer with more access permissions to review past designs.
Benefits of ERP integrations
- Real-time inventory counts in front- and back-end systems
- Automated processes for order placement
- Order tracking
- Vendor management
- Dynamic, customer-specific pricing options
- Automated financial audits
- Replacement of manual processes
Integrating your ecommerce platform with your ERP system optimizes your business operations by providing timely and accurate data to the right stakeholders. Benefits of this integration include:
1. Real-time inventory counts in front- and back-end systems
An ERP system can improve ecommerce inventory management by continually providing the most up-to-date inventory counts across your stores and warehouses. This applies to user-facing front-end systems and back-end systems like servers and databases.
2. Automated processes for order placement
When customers order from your ecommerce store, an ERP system can help automatically trigger the next steps in the fulfillment process, from generating shipping labels to sending confirmation emails.
3. Order tracking
Ecommerce businesses must track all sorts of orders, including inbound orders from suppliers and outbound orders to customers. ERP systems can provide accurate shipment data in real-time.
4. Vendor management
An ERP system helps you organize the many suppliers and vendors you use. You can store and quickly access data, from contact information to order fulfillment performance.
5. Dynamic, customer-specific pricing options
If you use a dynamic pricing model, where prices shift based on real-time market factors, your listed prices fluctuate. An ERP can help you adjust prices automatically with no human intervention. New rates automatically appear in your ecommerce store, thanks to integrated datasets.
6. Automated financial audits
Businesses of all sizes can use ERP systems to sync financial data across locations, departments, and even company subsidiaries. This is because you can program ERP systems to share this data automatically.
7. Replacement of manual processes
ERP systems can replace the manual data syncing your workforce might otherwise have to perform. This frees team members to focus on the more creative parts of their jobs. It also reduces the chance of human error impacting your data sets.
Types of ERP integrations
- Integration platform as a service (IPaaS)
- Other ERP ecommerce integration methods
Your ERP integration determines how your ERP software receives data from other ecommerce systems. ERP integrations have traditionally taken three forms, the most popular of which is integration platform as a service (IPaaS). Here’s how you can integrate your ecommerce and ERP platforms:
1. Integration platform as a service (IPaaS)
An integration platform as a service (IPaaS) ERP solution is a central hub for integrating different applications and data sources across your ecommerce business. It lets your team connect existing systems without having to write custom code. An IPaaS system runs in the cloud, integrating data from multiple ecommerce platforms, such as your web store and eBay account. The information you send to IPaaS cloud servers typically passes through multiple security barriers, which helps ensure that your company data is not compromised.
The cloud-based nature of IPaaS systems aligns with the needs of most contemporary ecommerce merchants, who rarely store all their data in a single physical location. If you already use cloud-based business software like Shopify, an IPaaS solution may be right. IPaaS vendors may offer flexible pricing plans based on your number of users and the amount of data you store in their cloud computing network.
2. Other ERP ecommerce integration methods
Before the rise of IPaaS systems, many businesses used an enterprise service bus (ESB) as computing middleware between multiple ecommerce platforms and ERP systems. You may still wish to use an ESB to network multiple devices that store different data caches, such as a server containing sales data and a server containing customer profiles.
You can also use a point-to-point integration platform, which connects a single ecommerce platform to a single ERP system using a direct data link. (Think of it as a computing bus for a single device.)
Both an ESB and a point-to-point integration platform involve storing data on individual devices. This makes them different from cloud computing, where data does not exclusively reside on a single machine. If your ecommerce operation is cloud-based, you may find an ESB inefficient for ERP and ecommerce integration and that an IPaaS system offers greater functionality and flexibility as an ERP implementation platform.
Important ERP features for ecommerce
- Cloud-based systems
- Automated finances
- Inventory management
- Order fulfillment
- Customer relationship management
- Marketing data
- Business intelligence
When shopping for an ERP solution for your ecommerce business, prioritize the following features.
1. Cloud-based systems
Most ecommerce businesses have adopted cloud computing, requiring a cloud-based ERP system with an IPaaS integration model. You can also use point-to-point integration or an enterprise service bus (ESB) integration, but these models don’t pair well with cloud-based ecommerce.
2. Automated finances
Look for an ERP system that can automatically sync financial data from all of your departments and bank accounts. This financial data typically changes minute by minute, so choose a system that offers real-time updates.
3. Inventory management
The best ERP solutions have inventory management features that help you track incoming orders, warehouse stock, and pending orders from suppliers.
4. Order fulfillment
You can use your ERP software to coordinate all tasks related to customer orders, including billing, sending confirmation emails, creating shipping labels, and sending follow-up surveys seeking customer feedback.
5. Customer relationship management
Your ERP can include CRM integration. This lets you provide customer information and personal purchase histories to your sales team and relevant stakeholders.
6. Marketing data
You can use your ERP to archive marketing data, including marketing scripts, promotions, and campaign performance data.
7. Business intelligence
The leading ERP platforms don’t merely collect data; they provide analytical business intelligence to help you make sense of the data and use it for strategic purposes. Each ERP vendor has proprietary tools, from Oracle to SAP to Microsoft Dynamics.
ERP software is expensive—it often comes with a six-figure price tag, and enterprise-grade ERP systems can cost millions of dollars. The cost depends on factors like the number of users, integrated systems, and customization options. Keep your needs and company budget in mind when considering ERP features.
Connect your ERP with commerce capabilities on Shopify
As the commerce landscape evolves at a breakneck pace, merchants across all industries have had to find new ways to stay nimble and transform their business operations at the drop of a hat. Over the past few years, merchants have made it abundantly clear that they need easier access to real-time insights from seamlessly connected apps in order to stay ahead of the curve.
In response, Shopify announced its Global ERP Program in 2021, which allows select enterprise resource planning partners to build direct integrations into the Shopify App Store. This marked the first time that Shopify partnered directly with the leading ERP providers, including Microsoft Dynamics 365 Business Central, Oracle NetSuite, Infor, Acumatica, and Brightpearl.
Shopify’s Global ERP program gives merchants access to ERP solutions that integrate directly with Shopify, eliminating the need for complicated third-party implementations. These include:
- Seamless connections between workflows. Apps within the Global ERP Program connect directly to merchants’ ERP accounts, providing accurate, up-to-date data on your inventory, products, orders, and customer information.
- The power to control their data. Apps in Shopify’s Global ERP Program give merchants peace of mind that their proprietary data seamlessly and securely flows between their Shopify admin and their ERP, without the need to connect with a third-party.
- The ability to save time and money. The Global ERP Program enables merchants to avoid time-consuming and expensive customized implementations. With fewer requirements to run their business operations, merchants have more flexibility to implement automations that make their operations more efficient.
Want to learn more about Shopify’s Global ERP program? Explore next steps for connecting your ERP to Shopify.