Last week we presented a webinar along side the NexTec Group on how and when to get a scalable eCommerce platform in place for future growth. An ERP system is a worthwhile investment for merchants serious about eCommerce but deciding on one and figuring out when toactually implement, can be a confusing and overwhelming process. In this webinar we shared some of the key benefits of ERP systems and the pain points merchants experience that usually indicate it’s time to integrate your eCommerce site.
Some of the highlights include:
– Key benefits of an ERP system with examples
– Top 5 signs you need to integrate
– Benefits of systems integration
– Common “gotchas”
– Real world examples of integration challenges
– What an integration actually looks like
Missed the webinar or want to watch/hear it all again? Check out the video below.
**Note** – the first couple of seconds are a little garbled.
We also have a written recap of the webinar:
Is your eCommerce Business Ready to Explode? How and When to get a Scalable Platform in Place
No web store module comes out of the box and ready to be implemented, at least for mid market ERP systems. It’s a bit more complex than that, as it’s not a simple plug and play solution. NexTec and Demac Media have been working together to build solutions that bridge the gap between eCommerce and ERP.
Who is the NexTec Group?
– Consultant that sells software systems
– Help companies become more efficient through software system
– Work with multiple ERP and CRM solutions
– Full services company
– Support over 600 customers nationwide, across all industries
– Help with installation, set up configuration, data conversion, training, and post go live support
– Work with 5 different ERP packages.
– Each package is usually suitable for a typical industry (eg. financials, distribution, manufacturing, service etc)
– They have a number of tools to find the right fit for you business
Key Benefits to ERP Systems
Visibility to Data: need a hub to look up all the information. Merchants will want to enter quotes into the ERP, and transition into orders. Need licensed ERP system for sales people to do order review, revisions, make suggestions on up-sells cross sells, look on what’s back ordered. Manufacturing/distribution – your business becomes more complicated, and might need barcoding and efficient packing efficiencies. Might need to rate shopping etc. Manufacturing processes, assembly or process – you have formulations and recipes. You want to track these things to see if you’re doing them efficiently. Want to see if your business is running smoothly, and how to run it better. How to grow appropriately.
Reporting: as companies grow, there will be multi-currency, multi-company and multi legislation data to be reported. Robust reporting measures are required to accurately represent the many types of data from thousands of transactions via your ERP and eCommerce platforms.
Examples of ERP Systems
– Low end: Quickbooks, Peach tree
– High end: Oracle
– Middle market is crowded and are a lot of offerings.
– Upper mid market products: Microsoft AX, Sage X3, Microsoft GP, Microsoft SL, Sage 500
– Sage has various ERP solutions – this is the highest end marketing product from Sage, this product is not as expensive as AX. it’s targeted at a price point better than AX.
– GP is the longest and most prevalent in North America. There’s over 50,000 companies using it. Mid-market ERP, very strong in financials. Has some manufacturing. If you need process manufacturing there are third party option add ons.
– SL is a niche product. Service oriented company. Working with time sheets, expenses and tracking.
– Sage 500 (formerly known as MAS500) – on par with GP with regards to financials etc
Intro to Demac Media
– Full service eCommerce, design, development company
– We design, develop, implement eCommerce platforms for merchants
– We really only work with Magento Enterprise
– We’re a Magento Gold Solutions Partner
– We’re one of the top solutions partners around the world
– We love to build things
– We’re a bit over the map. The most common thing is that we work with merchants/manufacturers that sell physical products. Eg. apparel, fashion, coffee, shaving supplies, HVAC filters. Anything physical Magento is a great platform to facilitate that
We’re talking about eCommerce and integration. Both are hub solutions. All other software that you’re going to use in your business are built around these things. If you screw up your eCommerce platform or ERP solution, it’s the biggest screw up you can have. So take the time and do your due diligence and pick something that fits your business the best.
Quick Overview of Magento
– Largest and fastest growing eCommerce platform (roughly 26% of the market)
– Owned by one of the largest eCommerce companies in the world: eBay
– It’s open source
– It has a massive community (pretty much #1 reason to liking it)
– It has north of 6,000 Enterprise merchants, +100,000 merchants on it
– Easy to integrate with
When and How to Integrate
– The first km/ mile of eCommerce: it’s all about when is the right time to do these things
– Choosing your eComm and ERP systems – they’re steps 1 and 2
– Then when is it the right time to integrate, and add on systems? It depends on the business you’re in
– There are different trigger points
– STRESS: it’s the TIMING of these decisions. you’re going toe nd up with all of these systems, but it’s WHEN you choose them
Top 5 Signs you Need to Integrate:
1. Large Order Volumes
0 – 20 / day
20 – 100 / day
100 – 1,000 / day
2. Multi Channel Selling (inventory turns)
3. Return Requests
4. Frequent Price Changes
5. Received Product
– Automating order processing, multi channel selling, shipments, invoicing etc.
– Order volumes: 0-20, 20-100, and 100-1,000 – at each of these levels there will be different pain points.
– However, it depends on the product. Eg If you sell batteries, it is different that selling car seats.
– Every business has thresholds, and when it comes to order volume, there are some automation factors that can have a HUGE impact on your business.
– When you look at these 5 things, it has a lot of things/ benefits to your back end. It will help you grow.
– Selling on your site vs Amazon – it’s a very complicated model to run. You’ll want to automate these channels / type of business.
– You don’t want to do things manually for long, as there are human limits
– If you’re the kind of business is launching new SKUs each week it’s a lot of product to merchandise. You need the labour to support that.
– Look at the volumes at each of these volume order buckets.
Benefits of Systems Integrations
– This is a tough one, as it’s different for different merchants.
– It comes down to automating manual processes
– You want orders to manually automate into your systems.
– You’d be amazed to see how people run their business manually, and it’s wasted time and energy when all that can be automated
– Human error is an obvious one, but then start to think HOW many mistakes are you making?
– Each error has a dollar amount associated with it
– When you’re integrating, the idea is not about how quickly we can do things, it’s about reducing the number of errors
– Reporting – when you have a fast growing eCommerce business (or any business) you’re so heads down in the business that you’re executing it’s hard to look up and focus on reporting
– The accuracy and how quick you can get data can have a BIG impact on your growth
– We’ve seen merchants who don’t have accurate sales data until the end of the month until after reconciliation between various systems
– You shouldn’t be waiting a month you should be able to see it every day. See what sales look like across channels and bc of marketing campaigns
– Then you know where to spend, and in what direction
There are plug and play options. The idea of plug and play: you buy software, and it magically connects System A to B. You can do that, there’s software out there that has pre-canned integrations. But….
How we integrate and how we approach it ….there’s about 20% of integrations that are unique merchant-to-merchant. It depends on what kind of data your’e moving back and forth. Your integration will depend on what kind of process you have around selling your product. Products can have different processes for back end fulfilment. Some might be built for simple physical fulfilment
– Do you need all that data from your eCommerce platform to your ERP system? Do you need order order numbers, customer info etc?
– How do you choose which piece of software owns which piece of data?
Tough questions to get your head around.
Sometimes we think there should just be a two way sync (eg. customer updates something, then that should be automatically in the ERP system and vice versa). Lots of challenges around two way data integration. Unless you’re a really large business and you can justify time, headache and expense doing the 2 way – most merchants choose a master system. Eg. Customer data master is ERP (and inventory) where products the master is the eCommerce platform. Each system should own a piece of data and be responsible for the data
Process hand off: There’s a fulfilment process and in every step – which system is handling that piece, and at which point should data be communicated back to staff.
Need to look at this. For example: when an order is placed on the website… where is your warehouse working out of? Your eCommerce system? Or when an order comes in from Magento does it get sent to your ERP system – to your warehouse and that’s where they pick pack and ship? And the tracking number from ERP system should float up to eCommerce system.
Real World Examples of Integration Challenges
Gift Registries: If you’re in baby or wedding that needs a registry – they are simple in how they sound (customers add products to registry, friends and family buy them) but complicated in their execution: notifications, two friends shouldn’t be able to buy the same thing, physical locations need to be integrated online and offline. If you have a registry business this is something to watch for. Be very detailed with processes!
Back orders and special orders: a lot of eCommerce companies don’t take back orders because they add an overhead they’re not ready for. Some industries have to take back orders because that’s the nature of your industry. Multiple warehouses – sometimes there’s logic that you need to choose which warehouse to send the product to (Eg. west coast vs east coast).
Drop Shipping: you have multiple drop shippers for same SKU. You buy a camera from 3 different drop shippers, at point of order you want to buy from the one that has the cheapest shipping cost, for the merchant and customer. This logic is easy to think about for the human brain – BUT where does that live in the software? We have to tell the eCommerce platform and ERP where to route – there are decision trees. Computers are stupid and you have to tell them how it works.
Returns (RMA): where does an RMA get initiated? Can you do it on the website. Once it’s approved does that go in the ERP system or just stays in the eComm platform? People get hung up because they think it’s easy and should work – but when you dig into it gets complicated and depends business to business.
What does a typical integration look like?
It’s not magic and there’s always a format. This is what a typical order export looks like:
– Has order number and customer number, multiple line items, if it was taxable etc
– Data can be exported and imported
– Once you see it in this format – nice and easy to digest
– Start thinking should you be sending this data down into the ERP system? Or do you just keep it in the eCommerce platform?
There’s a lot to think about when shopping for an ERP system or eCommerce platform. There’s a lot that goes on, and a lot of things to consider. Our firms are having some major success working together on things. So if you’re interested in learning more or want to start a discussion please get in touch with us! Shoot us an email at firstname.lastname@example.org