12 MAR

Determining Readiness for eCommerce: Understanding Your ERP and Integration Capabilities

by Kris Harrington

The first step in defining your manufacturing company’s eCommerce strategy is evaluating your solution’s enterprise resource planning (ERP) system and integration capabilities. The ERP holds the entirety of an organization’s financial information and is the safe source for a significant portion of data and process automation.

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. ERPs are 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 add 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’s not uncommon for large OEMs to have various ERPs across the organization. Manufacturers must perform a thorough analysis to understand the differences between these systems and any implications to the onboarding process or in developing the integration strategy. The goal is to leverage the capabilities of the ERP systems to ensure real-time access to product information like price and availability, quote and order creation, and purchase history details including shipment status.

Each helps the preparedness of an OEM’s current ERP and integration capabilities.

ERP Software

The first thing to evaluate is the ERP and the version 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 the degree to which it has been customized can impact integration mapping. Some customizations also impact process flow either internally or externally. It is imperative to evaluate any customizations to determine the potential impact on integration or the customer interface.

One ERP or Multiple ERPs?

The great thing about an eCommerce site is that it can integrate many ERP systems on the backend in order to provide the customer a consistently excellent user experience on the frontend. 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 essential, at least as important is having a 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

A crucial step in any organization’s preparation for entering eCommerce should be evaluating the current use and capabilities of their 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 handles and stores 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 manufacturer’s 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.

 

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