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Integrating eCommerce with ERP
5th August 2019

The emergence of eCommerce has been one of the most universally acknowledged cases of business model disruption in recent years. Retail is prone to reinventing itself every few years, in big ways and small, but even within that paradigm eCommerce marks a significant departure from the previously established norm. Few industries have the need to be responsive to factors as variable as supply chains, customer preferences and constantly emerging competitors, as the eCommerce sector. An effective ERP solution offers eCommerce operations the means to identify opportunities and seize advantages, and significantly increases their chances of remaining relevant within a constantly transforming business.

The rise of eCommerce businesses and the appearance of ERP systems, while not exactly concurrent, is part of the same generation of business innovations, which leverage digital technology and connectivity. Despite the apparent benefits, ERP integration was initially not necessarily the standard and preferred practice for many online retailers. This was partly because of the additional costs involved in the initial capital outlay and partly due to the learning curve and disruption that replacing a previous paradigm and existing processes entails. However, the operational efficiencies and enhanced customer engagement that early adopters demonstrated and attained, have certainly presented a highly compelling argument. Integrating eCommerce sales channels and ERP systems essentially allows a business to become a data-driven operation – across orders, inventory, customer records, shipping and much more. It optimizes value chains and efficiencies while effectively breaking down silos and creating synergy across processes. In addition ERP systems eliminate duplication of data, manual or repetitive entries and sub-optimal workflows which can be improved with the input and processing of relevant data. It’s certainly possible to operate an eCommerce business sans an ERP system, but the limitations of that approach are clear.

While CRM solutions are often more easily identified as being a rational addition to the back office toolkit of an eCommerce operation, ERP solutions are sometimes perceived as being more critical to manufacturing businesses. However, a conjoined deployment of both approaches is probably the most effective approach to proactively responding to changes in customer behavior, as well as the fluid and competitive nature of industry itself. Microsoft Dynamics 365 is a solution that delivers an effective way to integrate an ERP solution, within an eCommerce context. It can effectively rationalize cloud technology, multi-platform and multi-channel access, and consistently agile process management.

The Operational Advantage of ERP in the Online Retail Space

eCommerce is often perceived as being built on effective customer engagement alone. However, some of the most decisive business efficiencies in the sector are derived from data-empowered and proactive process control. Crucial advantages that a well-integrated deployment of ERP delivers, in an eCommerce context, include:

  • Eliminating data redundancy and human error. Retail is a very data-dense business; enterprises need to track and organize information across parameters as diverse as order tracking, loyalty points, customer behavior and more. Comprehensive contextualized records are one of the most significant advantages of an ERP solution.
  • Increased efficiencies and reduced costs. Integrated and well-embedded ERP systems reduce duplication of effort, create synergies and optimize resource utilization. Business operations are highly dependent on creating desired outcomes with the least wastage of resources, for bottom-line impact, and this is precisely the result that can be anticipated from a well-deployed ERP system.
  • Brand building and customer relationships. ERP systems can help businesses identify and understand their customers better. Creating a coherent narrative is central to driving a positive relationship with customers and projecting a brand identity. In addition, ERP systems facilitate a highly reliable and consistent quality of service provision, further reinforcing brand value.
  • Data driven decision making. eCommerce thrives on identifying and exploiting margins, and data driven insights can make the difference between success and failure in this regard. Data analytics allows enterprises the leeway to address customer expectations, set KPIs and ensure competitive pricing – among numerous other crucial decisions – in measurable and quantifiable ways. ERP solutions are crucial in capturing relevant and contextualized data, in order to extract the aforementioned advantages.

Conclusion

Effectively integrating your eCommerce enterprise with an ERP system provides your stakeholders a transparent and comprehensive view of the organization. It tracks relationships, dependencies and synergies, while enabling insights that help rationalize your operations. Structured data and an informed overview of operations results in optimal performance and coherent organizational control. An effective ERP system is crucial in aligning internal process with customer engagement and maximized returns.

To understand how Microsoft Dynamics 365 can help your business operate to its optimum potential, please reach out to us at marketing@levtechconsulting.com.

 

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