Determining Readiness for eCommerce: Understanding Your ERP and Integration Capabilities
by Bob Zastrow
Understanding the ERP
Evaluating the Enterprise Resource Planning (ERP) solution and integration capabilities is an important first step in defining a manufacturers eCommerce strategy. This is because the ERP is essentially the backbone of any manufacturing business and is the safe source for a significant portion of data and process automation. The ERP is also considered as the “heart” for the entirety of an organization’s financial information. From a technical perspective, the ERP is responsible for handling functions such as accounting, inventory management, order processing, customer and product information, merchandise management and forecasting, among other key functions. ERP’s are typically very robust systems within an organization and are typically the main source of record keeping for information regarding orders, customers, inventory, and products. Simply put, the ERP is the most logical and common integration to an eCommerce system. Analyzing the chosen ERP, determining how customized the solution is to meet the current demands of the business and evaluating the variations in use across multiple locations or brands within an original equipment manufacturer (OEM) is critical.
How to Evaluate Your ERP
It is not uncommon for large OEMs to have various ERP’s across the organization. GenAlpha performs a thorough analysis to understand these differences and any implications to the onboarding process or in developing the integration strategy. Ultimately, every manufacturer should want to leverage the capabilities of their ERP system to ensure real time access to product information like price and availability, quote and order creation, and purchase history details including shipment status. Each of these criteria form a large part of determining the preparedness of an OEMs current ERP and integration capabilities:
- ERP Software: The first thing to evaluate is the ERP and the version being used throughout the organization. Older versions of an ERP can make certain aspects of integration challenging. Understanding the integration capabilities is critical to defining the scope and timing of any future eCommerce project.
- ERP System as a Safe Source: Having centralized business information, across all brands, in one safe place is a best practice for leading organizations. ERP organization will allow for the utmost efficiency when accessing information related to items, pricing, customers, inventory, shipments, invoices, etc. Evaluating how well the ERP is used as the safe source to store information is critical in understanding the ease in which the data will be utilized in an eStore. It is not uncommon for manufacturers to make customizations to a standard ERP software package to meet the needs of the organization. The areas of customization and degree to which it has been customized can impact integration mapping. Some customizations also impact process flow either internal or external. It is imperative to evaluate any customizations to determine potential impact to integration or the customer interface.
- One ERP or Multiple ERPs: The great thing about an eCommerce site is that it can integrate to many ERP systems on the back end in order to provide the customer a consistent great user experience on the front end. This means that a manufacturer who owns many brands, across many locations, with potentially multiple ERP systems, can provide a single place for customers to shop. However, when multiple ERP systems are involved, the scope and timing of launching a new store need to be adjusted to meet this requirement. Understanding the number and type of ERP systems, customizations, connectivity and resources available to support each ERP are a part of this evaluation.
- IT resource availability: The right IT resource is integral to successful eCommerce. Personnel capable of maintaining and integrating eCommerce with an ERP is necessary. In most cases, contracting an external team will be adequate for an organization’s initial integration.
- Business resource availability: While having the right IT resource is important, at least as important is having a business resource that understands the business vision and how the ERP is used to align that vision. The right match between IT and business skill sets will both streamline the process and maximize the end result for the customer.
It All Starts With the ERP
An important step in any organization’s preparation for entering eCommerce should be the evaluation of the current use and capabilities of the ERP system. The ERP is the backbone for critical eCommerce data, such as product SKU, description, pricing, inventory, quotes, orders, invoices, etc. The way in which the ERP is used to handle and store this information is important in developing business processes that ensure the ERP and customer storefront are leveraging the same data. The eCommerce store will become representative of the manufacturer, and its level of quality will reflect the manufacturers reputation. Without conducting an eCommerce readiness assessment, a manufacturer risks overlooking criteria within their business that are essential to the successful implementation of an eCommerce store.