Launching an online store is a deceptively simple process. With certain pre-packaged SaaS services, you can get an e-commerce store online in a couple of hours, if not minutes. At that point, though, you need to confront a big challenge. When you do business online, you’re one click away from some of the world’s most sophisticated e-commerce competitors. It’s like opening a shop in the ritziest district in town. You have to be prepared to offer a great customer experience from start to finish or face the consequences of world-class competition.
The Role of ERP Software in e-Commerce
Getting off to the right start in an online business means having the right perspective on what the whole endeavor is about. Are you starting an online store, or are you starting a business that operates through an online store? There’s a big difference between these two ways of defining an e-commerce operation.
An online store is a website where customers can buy things. A business that operates through an online store is just that, a business. It has a strategy. It has operations that include functions like customer service, merchandise returns processing, accounting, payables, inventory and warehouse management, supply chain management and so forth. It’s an organized, coherent financial entity that just happens to engage with its customers online.
What differentiates a business that works online from a simple e-commerce site? At the most fundamental level, the answer is software. Modern Enterprise Resource Planning (ERP) packages like Acumatica now make it possible to run a complex business online by integrating the e-commerce front end with your company’s back office operations. ERP provides all of that functionality—customer support, supply chain, payables and so forth.
Processes Necessary for e-Commerce Success with ERP
It’s never too late to connect your e-commerce store with your back office. Indeed, many of our clients have come to us with a business e-commerce site and an active business operation—only the two are not well linked at all. This problem can be solved with the right ERP package.
Connecting the Store with Order Fulfillment
Cloud ERP platforms such as Acumatica give you the ability to pass order information from the e-commerce platform to your order fulfillment department. If you don’t have such a department, your e-commerce launch is a great pretext for setting one up. One challenge here is to make sure that the order captures all the necessary information needed for fulfillment. This might mean automatically integrating the full product catalog and inventory control system (both of which are included with ERP) with the store front end.
For example, if a certain SKU only comes in two colors, it should only be displayed in two colors in the store. This may sound obvious, but if you have, say, 15,000 products, each of which usually comes in 5 colors, you’re going to be really busy keeping up with which colors are available. In fact, it’s almost guaranteed you’ll fail to keep up and then you’ll have disappointed customers on the phone, talking to customer service.
Bringing Customer Service into the Loop
When the phone rings at your customer service desk, the rep who answers should have complete access to all order information. The ERP solution can provide this too. Even if the customer calls ten seconds after placing the order online, with ERP, the customer service rep can see the order instantly.
Linking the Front End with Your Inventory
ERP can also make your inventory a live element of your e-commerce site. For example, if a shipment of products arrive, each box can be scanned for a bar code and automatically entered into available inventory. The product details and quantity will automatically populate the website. Then, as products are sold and removed from inventory, the product listing on the store will reflect the decrease in inventory. The buyer will see “Only 10 left!” and so forth.
Making the Accounting Connection
The store should be seamlessly integrated with your accounting system as well. ERP makes this possible. It enables credit card processing and automatic posting of revenue for each order and debiting of revenue for each return. The software instantly posts to the balance sheet, providing up-to-date and accurate inventory valuations and cash balances.
Virtually of the functionality described here can be done by hand. But, that’s a really bad idea. It’s extremely hard to grow, and even make money, at an e-commerce business that runs on manual processes. ERP gives you essential automation of workflows. It also gives you data about your operating you can use to make decisions about what to do moving forward. ERP is an essential element of e-commerce success.