5 Ways ERP and eCommerce Can Propel Revenue Growth
While we’ve seen a continual rise in eCommerce over the past several years, the economic factors in 2020 have triggered a jump in adoption. With expectations that over 95% of all purchases will be made via eCommerce by 2040, moving to online sales has become a critical move for small to mid-size distributors. The thought that eCommerce is reserved for consumer businesses just doesn’t hold anymore. In fact, research from Frost and Sullivan predicts that global B2B eCommerce sales will reach over $6.6 trillion by the end of this year. That’s double the estimated sales revenue from B2C eCommerce sales. So, no matter which space you play in, there’s a strong case for making eCommerce a central part of your sales strategy.
But is it enough to just setup an eCommerce site? You could go that route. But if your site isn’t connected to your ERP system, you’ll unintentionally create extra administrative work and redundancy throughout the company. You could end up overselling items that aren’t in stock because your inventory levels and related demand aren’t taken into account at time of sale. Maintaining accurate product information in multiple systems is cumbersome and time consuming. And then there are the simple (and avoidable) issues like data entry errors on shipping addresses.
While you might reap some benefits of eCommerce, results will be limited as you redirect resources to deal with the challenge of having two key systems that don’t talk to each other. So, think bigger – a comprehensive ERP and eCommerce solution enables you to truly get the long-term value and maximize the return on your investment.
5 benefits of integrating ERP and eCommerce
In a nutshell, integrating these two systems allows you to bridge the gap between sales and operations. From a financial perspective, you get a dual benefit by reducing operational costs and increasing sales revenue.
1. Deliver a top-notch customer experience
Research from Walker Info suggests that by the end of 2020, customer experience will overtake price and product as the key brand differentiator. No matter how well you compete on product or price, a sub-par customer experience gives your competitors an opening to convert your customers.
Consider this example that we often see in B2B companies – a customer wants to place an order, so they review the product catalog, submit a request to get a price quote and lead time. Then they wait for a response. What if they could access pricing and availability online, submit their order and check the order status in real-time?
Integration between your ERP system and eCommerce site is key to delivering a quick and seamless order-to-cash experience for your customers. A complete omnichannel solution like FocusPoint hits all the points with customer experience at the center. Their eCommerce solutions for B2B or B2C offer strong SEO support to drive traffic and all the on-site capabilities you need to increase sales and retention. Tight integration with SAP Business One on the back end helps you streamline operational data and respond to customer needs faster.
2. Increase sales revenue
Companies that integrate eCommerce with their ERP system see an 8% increase in sales volume on average. The most obvious reason is that you’ve added another sales channel. You’re no longer constrained by geography – eCommerce offers an opportunity to expand beyond that into new markets without necessarily adding more salespeople. Additionally, the improved customer experience we just talked about helps you increase revenue from existing customers. The easier you can make it for customers to buy from you, the more likely they are to make repeat purchases. On its own, eCommerce will only take you so far in this respect. Their experience on your site is important. But you need real-time data syncing to your ERP system so you can process and fulfill orders quickly to deliver an exceptional buying experience and keep them coming back.
3. Streamline inventory management
For any inventory-based business, tracking stock accurately is priority number one. If you’re setting up an eCommerce site, sending real-time updates to your ERP system is a must. As orders come in via your eCommerce site, the order details flow straight into your ERP system, properly adjusting your inventory levels. Your customers also get better visibility into product information and availability, as changes made in your ERP system are reflected on your eCommerce site. No duplicate data entry required!
4. Capture more accurate financial information
In the same vein, integrating your eCommerce site with your ERP system allows for real-time syncing of financial data. As orders are placed on your site, the data feeds into the financial processes and reporting. Without manual intervention in this process, you gain confidence in the accuracy of your sales numbers as it’s coming directly from the order. And the data is real-time, so you can get a pulse on sales activity at any point in time, rather than waiting for data to be reconciled between systems
5. Boost efficiency
By far, efficiency is the most significant benefit of integrating your ERP system and eCommerce site. You’ll see the impact across virtually every part of your business. All your sales data will be centralized in a single system, no matter which sales channel it’s coming from. The need for duplicate data entry in multiple systems disappears – customer information and order details entered on your eCommerce site are passed through to your ERP system. And the relevant ERP data is synced to your eCommerce site, giving customers access to self-serve tools that reduces the demand on your team.
The bottom line
eCommerce isn’t going anywhere. But those that rush to get a site online without considering how it fits in with their existing business systems and processes will notice the short comings fairly quickly. An eCommerce solution that tightly integrates with your ERP system will deliver far greater results over the long term – quite frankly, it’s a must.