What Is an ERP for Online Business?
ERP solutions for online business is a software program that streamlines and automates administrative tasks associated with running an eCommerce business. This includes functions such as inventory and order management, customer relationship management, accounting and financials, analytics, and reporting.
ERP systems enable businesses to manage their processes more efficiently in order to maximize profits while minimizing costs. The use of an ERP system helps create efficiencies in the workflow, allowing businesses to focus on growing their customer base and providing the best possible service to customers.
ERP systems are often combined with customer relationship management software by integration experts. Via API connectors, it can also be integrated with shipping companies, payment hubs, and even other companies' supply chain management software.
ERP Systems and Their Role in eCommerce
ERP systems are essential tools for successful businesses in the eCommerce industry. They automate many of the processes involved in running an online store, from inventory management to customer relationship management, making them invaluable to a business’s success. In this blog, we will discuss what ERP systems are and how they can help your eCommerce business.
Where to Keep Your ERP Solution
Different needs can determine the location of an ERP platform. Although Cloud solutions are often seen as innovative, they may not always be suitable for core business operations due to their rigidity or customizable nature. Working with the right integration software developers will help.
On-Premises
In this model—sometimes referred to as
on-premise—the ERP is hosted on servers owned and operated by the business. This is typically found in highly regulated industries such as healthcare and financial institutions where data storage and protection are of utmost importance. For instance, a hospital group may want to host their information, and even their HIPAA-compliant website data, on-premises.
In the Cloud
The system can also be located on third-party cloud servers, including Amazon Web Services, Microsoft Azure, or Google Cloud Services. These options are easier to set up and can come at a lower cost than other solutions. They are also the best option when a company needs to scale. As it provides convenience, this has become a popular choice for businesses.
A Hybrid of the Two
Hybrid models combine the two approaches for maximum flexibility and control over sensitive information. Financial records may be stored on-site while other core functions take advantage of the added benefits of cloud usage. Legacy modules may also benefit from this structure, allowing companies to make the most out of their resources.
The Key Features ERP Software Should Have
What do your business processes need your enterprise resource planning ERP software to do? While there may be add-ons you'll need later, here's the most basic list you should look for in an ERP solution.
Customer Relationship Management (CRM)
CRM systems backed by ERP solutions provide greater opportunities for companies to manage customer relationships in a streamlined way. Companies can use CRM software to gain a better understanding of their customers, as well as set up tools such as automated email and marketing campaigns. This not only helps save time and money, but also strengthens the connection between a company and its customers.
Financial Management
ERPs provide the power to drive digital transformation, allowing businesses to benefit from automation and AI technologies. By taking over tedious tasks, such as mundane responsibilities and duties, they free up time to focus on more meaningful objectives.
ECommerce companies can take advantage of real-time reporting when it comes to their ERP system. Having a platform that can monitor orders, accounts payable, and accounts receivable in real time allows them to gain valuable insight into how their online store is faring. Dedicated accounting software with a user-friendly dashboard often makes this process easier, proving the worth of the investment itself.
Product Information Management (PIM)
PIM solutions make selling across multiple channels much easier. Instead of having to manually create and update listings on every platform, a PIM lets companies set up a single product information source which can be quickly edited to update all listings with the same changes. This eliminates tedious, time-consuming manual work and ensures that shoppers receive the most accurate product details.
Inventory Control
With integrated inventory management, companies can easily keep track of their stock levels in real-time no matter where it's located. This eliminates guesswork and headaches associated with managing the supply chain and inventory levels, enabling businesses to better plan their orders and shipments and stay ahead of stockouts.
Warehouse Management and Shipping
An ERP system simplifies logistics and order management, taking away much of the complexity involved. Automated processes such as label creation and shipping cost calculations save time for businesses. Meanwhile, providing customers with updates on their orders helps create a better overall experience.
Benefits of Implementing an ERP System
ERPs are powerful tools to help online businesses unlock the potential of digital transformation. By streamlining administrative tasks, they allow teams to focus on areas that have a higher impact and greater profitability. Many ERP systems come with automation and Artificial Intelligence capabilities built in, enabling companies to further optimize their operations for greater efficiency.
Using ERP solutions helps businesses improve efficiency by automating many of their daily processes. The main areas where it provides benefits include:
Omnichannel Improvement
ERP software can improve an omnichannel experience by providing a single source of truth for customer data. This allows businesses to gain a comprehensive view of customers across all channels, and tailor product recommendations, promotions, and other services accordingly.
It also helps companies create a unified purchasing journey by syncing inventory, orders, and payment details across all channels. The platform can enable marketing automation for personalized content that takes into account past purchases and preferences.
Inventory Management
An ERP solution improves inventory management by providing real-time data that helps businesses accurately forecast customer demand. This allows them to plan and execute timely replenishment of stock, ensuring that customers are never out of their desired items.
Also, the automated inventory tracking capabilities reduce manual administrative work by supply chain management and warehouse staff, freeing up resources for more important tasks.
Creates the "Source of Truth"
An ERP solution for eCommerce creates a centralized, integrated data hub by unifying all of the departments within a business, allowing them to access and share data seamlessly. It's the single place that holds the most accurate information against which all other data can be judged.
This eliminates manual processes for each department, streamlining communication and improving decision-making. This centralization also amplifies business insights from multiple sources, helping businesses make better decisions that improve efficiency and profitability.
Better Productivity
An ERP for eCommerce improves operational efficiency and productivity by automating time-consuming manual tasks and streamlining core processes. This helps free up resources to allocate toward enhancing customer service, developing new products, and exploring new markets.
Automation also reduces manual errors, resulting in fewer delays and increased accuracy when completing orders and transactions. The platform can also be integrated with multiple third-party software systems, which increases efficiency by eliminating the need to manually switch between applications.
Automated Reports
An eCommerce ERP generates reports automatically which saves time and money by eliminating manual labor needed to generate these reports manually or with other programs like spreadsheets or databases. These automated reports also provide insights that may not have been obvious without them helping you make more informed decisions about the future of your eCommerce business growth strategies.
Better Reporting and Forecasting
An eCommerce ERP improves reporting and forecasting by providing comprehensive analytics tools to help businesses gain an in-depth understanding of their customers, products, and operations. These tools offer real-time insights into the performance of campaigns, orders, sales trends, and more. The data can be used to create accurate forecasts and predictions, guiding businesses toward better decisions that ultimately lead to increased profitability.
Improved User Experience
An eCommerce ERP helps improve the user experience by automating processes such as order processing, shipping cost calculations, and label creation. This reduces the burden on businesses and ensures that customers are provided with timely updates on their orders. ERPs often include features such as loyalty programs and broadcasting capabilities, providing customers with engaging experiences.
Pricing Management
An ERP for eCommerce improves pricing management by providing automated price intelligence tools to help businesses stay on top of market conditions. These tools offer insights into competitor prices, allowing businesses to react quickly and adjust their own prices in order to remain competitive.
Additionally, the tools provide the ability to optimize pricing models, helping businesses increase margins while minimizing shopping cart abandonment rates.