A Complete Guide to eCommerce Integration With ERP & EDI

ControlHub
November 8, 2022

While e-commerce is a great way to sell your products, it’s accompanied by some unique organizational challenges. After all, selling products requires a lot of moving parts, from inventory to marketing, sales, payments, and fulfillment. And while a company that mostly does B2B sales has relatively few outside entities to work with, if you’re a consumer brand, then the stakeholders can multiply fast.

Of course, even as a B2B brand, you still need to track multiple functions such as invoicing and order fulfillment. And at the same time, your team must often perform customer service tasks such as order tracking. All of this can get complicated quickly, especially if all of your business functions are controlled by different pieces of software that don’t talk to each other.

What’s the solution to communications difficulties between business processes? For many companies, the solution is to upload the data from one program to the other occasionally. However, this isn’t the best way, especially for larger companies or those that have more complicated operations. For these companies and for startups with big plans, an ERP is often the best choice.

What’s so great about an ERP?

An ERP, formally called an enterprise resource program, is a piece of software that integrates all of your business processes. While you might have some departments outside of the ERP, such as research and development or marketing, the point is to let all of your commerce-related business processes integrate seamlessly.

In other words, an ERP makes all of the data related to a sale or other transaction available to each involved program. For example, an ERP makes sure that the accounting department is aware of the order so that they can invoice the buyer if necessary or at least expect the transaction to appear on the company’s bank statements.

How is this helpful?

There are several ways that businesses can benefit from an ERP. Some of these benefits are universal to almost any business, while others are more useful to companies with a strong e-commerce presence. Let’s look at each of these individually.

  • Increased efficiency. An ERP system can help your business operate more efficiently because there is no breakdown in communication. This means that each department involved in processing an e-commerce transaction immediately knows that action is required.
  • Greater security. The fewer programs you were business runs on, the fewer vulnerabilities there are from a cybersecurity standpoint. As an added bonus, if you choose a cloud-based ERP, then the system is even more secure because cloud-based data is much harder to hack into.
  • You need less storage space. Because an ERP is a single, integrated program, it consumes a lot fewer computing resources than several different dedicated software programs. In addition, anything stored in the cloud likely doesn’t need to be stored locally, reducing your on-site storage needs.
  • Integrated data makes analysis much easier. In other words, it’s easier to see how well your company is doing in terms of sales, marketing, and profitability.
  • You can take ERP data and analytics and make much better business decisions. In other words, an ERP implementation can help you jumpstart your business and facilitate profits over time.

Key Takeaways

As you can see, ERP software can be quite valuable to a business. In particular, the right ERP solution can help your business operate more efficiently and become more profitable over time. Also, you can reap these rewards without compromising customer service or data security.

How to Accomplish ERP Integration

There’s little question that much work goes into an ERP integration. For one thing, any type of e-commerce operation handles a lot of data and features many moving parts. For another, this information is usually split up into many different computer programs, each of which is maintained separately. If you’re lucky, there will be some APIs already in place or at least a common database.

Fortunately, as long as your current computer systems are relatively modern, an e-commerce ERP integration can be relatively painless. That is, if you are using a solid ERP system as well. Here is the more common process, which uses an ETL system. ETL stands for Extract, Transform, and Load.

What is required for the ETL process?

For the purposes of an ERP e-commerce integration, the ETL process is involved yet relatively simple. Can pull data from as necessary First, you need to identify all. At the same time, the sources of information that you wa you will find nt to add to your ERP. For instance, you will have sales data, a payment system, a customer database, inventory, and even return or refund information.

Once you’ve identified all of the data sources, it’s time to build a bridge between the ERP program and each of your process programs. Many of these programs will ultimately be eliminated because your ERP will take over the functionality. But in the meantime, you need to get their data and learn how they work so you can properly build the ERP and customize it for your business.

Next, you will transform all this data into a format that your ERP can use. Typically, this is a type of database that all the different computer programs can draw on as they perform their functions. At the same time, the database will be automatically updated as a program performs each transaction.

In addition, you may need an API connection between your ERP and certain other software. One example of this is procurement software, like ControlHub. Because procurement software only interacts with your e-commerce operations in terms of reordering items to meet demand, and API is sufficient. Additionally, procurement his relatively complicated and requires a dedicated solution.

Finally, you will load all of this information and all the APIs into your new ERP. Once your ERP can use all the information it needs, your e-commerce ERP integration will be complete.

Key Takeaways

From a processing standpoint, and e-commerce ERP integration isn’t as difficult as it might sound. In fact, the major struggle is always making sure that you include all of the relevant information from our sources, and that your ERP system can pull any required information from each of those sources. Fortunately, once you have accomplished this task, a quality ERP system should make your life much easier.

Common ERP Ecommerce integrations and examples

As we’ve mentioned before, even relatively small e-commerce businesses may be able to benefit from ERP’s. While a company that primarily uses the need to see sales methods might not need one because their e-commerce software handles almost everything, this is not true in the B2B space. Customized software solutions are usually required to make sure that a B2B e-commerce business works smoothly.

With that in mind, what types of programs and functions are usually included in an ERP?

Payment systems

In this case, we are talking about more than just a credit card payment portal. For many businesses, purchase orders are an essential way to track expenses. On the other hand, more and more businesses are using purchasing cards and other electronic payment methods to speed transactions and reduce paperwork. But because you will encounter both types of companies in a B2B e-commerce situation, it’s important that your ERP implementation accounts for multiple payment methods.

By including payments in your ERP e-commerce integrations, you can make sure that accounting knows where each payment is coming from. It also expedites the payment cycle when a company wants to pay by purchase order, check, or electronic transfer. That’s because the paperwork almost does itself.

Punchout systems

Similarly, many companies love punchouts. Essentially, these are integrations between your website the customers’ procurement software. To gain access to your punchout, a customer will request that you give it to them. They will do this after you have been approved as a vendor according to company policy and any regulatory considerations.

One of the great things about a punchout is the convenience — when a customer wants to buy something from you, they will go to their procurement software, choose your vendor name, and browse your website. Once they have added all desired items to their shopping cart, the procurement software will place an order. Typically, these customers will pay by purchase order or directly from the bank.

When you properly integrate a punchout system with your ERP, the result is a significant convenience for both you and your customers.

Shipping

Companies that sell physical products need to ship each item ordered to the customers address. This can take a lot of work, and include a lot of moving parts, especially when there are logistics and supply chain challenges. Your ERP e-commerce integration can include a shipping functionality. This would generally determine where each item will be shipped from. As a start-up, the chances are that there’s only one option, but you may add more warehouses as your company grows. 

Then, the ERP can automatically calculate postage costs and tell your shipping staff what labels to place on each box. Often, the program can even track each package to its final destination.

Key Takeaways

ERP e-commerce integrations not only speed up your business processes, but they are a major convenience for your customers. In particular, although we only discuss a few of the possible integrations, quality integrations with an ERP system help improve customer satisfaction and company profitability. Best of all, you don’t need to worry your customers about the complexity of your ERP system. Instead, they can reap the rewards without needing to think about it or do anything in particular.

Must Have ERP Ecommerce Software Features For Your Business

While we have mostly talked about ERP e-commerce integration features that are directly related to e-commerce, there are many others that can benefit your business. One reason for this is that ERP systems can be programmed to perform many repetitive business processes and also keep track of business performance. Let’s look at some of these other ERP solution options.

Business analytics

How do you wonder why a customer returns their purchase? While some returns are normal even in the best of circumstances, a spate of returns can often signal trouble. For example, you may have a defective batch of drones where the rotors come off mid-flight. In this case, customers won’t be thrilled, and they’re almost certain to return the drones or demand repairs. With an ERP, you’ll be able to spot the trend more quickly.

Likewise, the analytics associated with an ERP include which products are the most popular. Then, you can take steps to increase production so that fewer potential customers are disappointed.

Price optimization

Price optimization is the process whereby a business will determine how much each customer is willing to pay for an item without undercutting sales. The idea is to make the most favorable profit margin and to ensure that most transactions are a win-win rather than either side feeling cheated. 

Most people are familiar with this technique in the airline industry, whereby the price of a new blank ticket under the same fare code will vary based on several factors that include how far in advance the ticket is purchased. A good ERP system can determine this optimal pricing based on past customer behavior.

Customer Relationship Management (CRM)

although there’s a clear connection between CRM data and e-commerce sales, these two data sets are often stored separately. Unfortunately, failing to integrate CRM information with your e-commerce ERP system often results in your company missing sales opportunities. After all, for many customers, the first purchase happens because they visited your website. 

This is true whether you are a B2B brand or a B2C brand because a B2B company will use your website as part of their sourcing and vetting processes. Likewise, consumers use company websites to help them decide if they’d like to buy something. A combination of demographic and ordering information can be a powerful tool for both strategic planning and customer outreach.

Supply chain operations

Finally, let’s look at the benefits of integrating your e-commerce platform and your supply chain-related business functions. Integrating these data sets helps you and your team plan ahead. For one thing, if a particular product is especially popular, you may want to order the raw materials for extra units. This can help reduce the out-of-stock frequency and the number of disappointed customers. 

Likewise, this information can help you identify new opportunities for products and not doing very well. In time, you can provide a better product assortment to delight your customers.

Key takeaways

A commerce integration can do a lot more than just manage payments and automate fulfillment. Instead, an ERP can help your business both track performance and plan ahead. Over time, you can make more customers happy while making your company more profitable. Best of all, because the ERP is performing a lot of typically manual tasks, you will automatically save money through reduced labor costs.

How to prepare for eCommerce integration

Unsurprisingly, an ERP e-commerce integration takes a lot of work. One reason for this is the sheer quantity of information that the new ERP system needs to process. For instance, even a basic e-commerce ERP system needs to have a copy of your product catalog. Otherwise, it can’t keep track of your inventory or even know for sure what a customer has ordered.

Additionally, if you have just purchased a new company or are otherwise integrating business systems, you will need to pull information from all of the legacy computer systems.

Fortunately, preparing for your integration isn’t as complicated as you might think. It’s more an issue of making sure that you have everything ready to go before you start. To do that, follow these steps:

  • Decide which e-commerce platform to use. You want to select a platform that will showcase your products well and help you provide excellent customer service.
  • Choose which business processes you want to include with your ERP. Ideally, these should be the most repetitive tasks that can easily be automated. This way, you can maximize your savings on administration while also making the purchasing process almost seamless. That way, he reduce the friction between a product inquiry and a sale.
  • Think about how your current software interacts with other programs. This will make it easier to program your new ERP in a way that makes sense.
  • Select the right business processes to integrate. Your goal is to make purchasing seamless for the customer and order processing easier for your team. You’ll also want to achieve some of those bonus functions with your new system. Make sure that you know what needs to be integrated in order to achieve those goals.
  • Decide which integration strategy to use. Your IT department will help you make this decision, but the goal is to make sure that your data syncs promptly enough for you to use it.

Once you and your team have made all these decisions, it will be time to implement the integration. This can include more or less code depending on how many processes you integrate, how many sources you are pulling from, and other factors. With your coding work finished, it is finally time to teach your team how to use that brand-new software.

Key Takeaways

ERP integration can seem very intimidating at first. This is unsurprising when you consider how easy it can be to not include everything you need. However, the easiest way to ensure that your commerce integration is successful is to be organized during the prep work. It should also go without saying, but be sure to hire well-qualified coders, or make sure that your IT department can handle the work. In this situation, as with many others, you truly get what you pay for.

E-commerce Integration with ERP

Even for startups, e-commerce can seem intimidating. One reason for this is the anonymity of buying online. Even though a buyer must give you their name and address, when you sell something in person, you get the size that person up. It’s also much easier to build relationships with your customers when you can see and interact with them.

Likewise, e-commerce has a lot more moving parts. The biggest reason for this is simple — not only must you complete the sales transaction, but you also have to mail the item to your customer unless they’re purchasing electronic items. Luckily, a quality ERP system can keep everything in one place and make your job as a business owner much easier.

But what is an e-commerce integration anyway? For our purposes, it is a program or line of code that takes information from multiple sources, uses the information, and distributes the results to the various places it needs to go. In other words, an ERP system integrates information and uses it more efficiently to the benefit of the business. At the same time, customers will often see better service because your employees will have more time for value-added work.

Let’s look at an example. For most of us, getting a transactional email from a business when we make a purchase is an expectation. Not only does it acknowledge that we placed an order, but it is also a form of receipt or invoice, depending on the payment method. Most of us don’t think about how these automated messages are generated. However, in most cases, it’s the result of either an ERP or an electronic ordering system. Frequently, these two items are linked together.

For some businesses, and ERP is also a way to identify inefficiencies in their operations. One example could be if the business is paying too much for shipping packages or if there’s a lot of waste because several packages are sent when one may have sufficed. Not only can the business save money by minimizing this inefficiency, but many customers will appreciate receiving fewer boxes. You can find examples like this all over many companies’ operations.

Likewise, an ERP can be a lifesaver when it comes to avoiding out-of-stock situations. Most of us have ordered something online, then later found out the company was out of stock. Done right, an ERP evil of words the digital storefront that the last item has been sold so that no more orders will be taken. While this system is never foolproof, it can certainly keep angry customers to a minimum.

Finally, the right e-commerce integration can help keep customers happy by making sure that supply and demand are well balanced. Just as excessive overstocks can threaten company profitability through large-scale discounting, having popular items constantly out of stock to rise customers to other companies. This is especially true in the B2B space, where another business must also ensure supply chain integrity. In addition, many consumers do not like to wait for the first choice of item and will purchase the second choice if it’s more convenient to do so.

Key Takeaways

For many businesses, having the right balance between supply and demand, as well as an efficient order handling system, makes an ERP e-commerce integration worthwhile. In fact, for any business that has heavy online sales volume, an ERP is essentially mandatory. That’s because it not only benefits the business but makes a better impression on the customer.

How to Overcome eCommerce to ERP Integration Challenges for B2B Merchants

One of the biggest challenges that B2B merchants face when trying to implement an ERP is that most software options are built for consumer brands. For instance, it’s fair to say that consumers can be fickle — give them a discount, and something they previously viewed as too expensive or as frivolous is suddenly a must-have. On the other hand, B2B buyers are often very precise. They have specific standards for everything that they purchase, and in addition, they have different types of payment terms.

At the end of the day, business and consumer markets create most of the automation and integration headaches for B2B brands. But how can we overcome these problems? There are several things that you can consider.

Choose the right e-commerce platform

Many B2B e-commerce solutions are not user-friendly. It used to be that you could essentially post your product catalog online for the customer’s convenience, and then they would order products by phone or fax. Those days are over. Nowadays, you need an e-commerce platform that has the ease of use QC with B2C brands, along with the flexibility that business buyers need.

Ideally, your company’s e-commerce site should be easy to navigate and make it simple to select the desired items. Many buyers prefer sites that have punchouts or that can accommodate purchase orders from the shopping cart.

Include both your ordering and your CRM with your ERP

In other words, make sure that you log everything a business buyer purchases within your CRM. This allows you to see what each customer buys and match it to a specific company profile. For example, you might find that you have a market of which were previously unaware. Not only can this offer you some opportunities to expand your reach as a company, but it can also help you see ways to improve your products.

Give your ERP access to all the data

In this case, ERP should not only see who is purchasing what, and at what price, but it should also track more advanced analytics. This will help you hone your buyer persona over time and also streamline customer service. 

Think about the second point this way — a lot of industries like insurance have yet to fully embrace the digital revolution. If you have ever needed to call your insurance company to make a claim or dispute of finding, you may have been transferred from one rep to another several times. This process can quickly get frustrating, especially if you have a complaint or have just gone through a traumatic event. 

Unfortunately, unlike an insurance company that you typically must work with until the claim is finished, a B2B customer can simply go elsewhere if they are having trouble with your company. By having all your customer service reps might want in one place in the ERP, you can minimize frustration. 

Key Takeaways

B2B e-commerce has changed a lot over the last decade or so. What used to be a minor part of the typical B2B sellers business is now a major source of sales. In addition, B2B buyers have come to expect more from the service they receive online. Fortunately, with the right ERP and e-commerce tools, your business can get and stay competitive.

Challenges Faced in Ecommerce ERP Integration and How to Overcome

One of the biggest challenges that retailers have had during the switch from mostly bricks and mortar stores or catalog sales is creating an ERP integration that adequately works with the website. Especially in the B2B space, suppliers are used to old-fashioned catalogs and order forms, along with purchase orders for payment.

Of course, trouble with e-commerce ERP integration is not limited to B2B brands. While there’s more commercial software available for B2C brands, some of the challenges are similar. In a nutshell, ERP needs to handle the right information at the right time to produce the right results. Let’s look at these challenges in a bit more detail.

The numbers produced by your ERP aren’t that useful

This challenge results from a relatively elementary error — not integrating with the right goals in mind. While it’s pretty obvious with an order-taking system, not every ERP implementation team recognizes that the order information should go to the ERP and be distributed to other business processes to help expedite the order. The same can go for neglecting the CRM or other sales and marketing tools.

The features of your ERP don’t accomplish what you need them to

Here, the error is not knowing what you need from your integrations. Often, this means that you omit a critical data set or integration, such as failing to make detailed order information available to the customer service department. Fortunately, if you think ahead and plan ahead, you can avoid most of those problems.

Your ERP is hard to work with

There can be several reasons for this challenge. For instance, it could be that your code was not tested well enough, and that there were still bugs that need to be removed. Another reason is that your business has outgrown your ERP system. If you plan for the future, then you can avoid this error. And lastly, staff training could be the culprit. Fortunately, this problem is easy to fix with additional training hours through your IT department. As you revise the code, you might also make the ERP more user-friendly.

Key Takeaways

While it isn’t possible to anticipate every contingency, many problems with ERP integration result from your company not planning ahead properly. It can also result from poor coding or a failure to understand your company’s needs. In other words with proper planning and outside help with necessary, you can minimize most of the common problems companies face with ERP integrations.

How To Integrate ERP Systems

One of the problems that businesses face every day, and especially when they are implementing a new ERP system, is proper integration between the ERP and other computer applications. Many businesses have a complex web of software that covers each aspect of their business from supply chain management to billing customers, fulfilling payroll, and otherwise managing corporate resources.

Fortunately, most of the headaches associated with business operations can be minimized through the right ERP system integration. To make your ERP implementation or upgrade go more smoothly.

Make it easily accessible to the right people

In other words, configure all of your user credentials at the same time. This way you won’t have a transition period where some people have the right credentials and some don’t, while everyone on that list. Additionally, by setting up the credentials properly from the beginning, you’ll lesson the likelihood that one application will deny access to another application or the ERP.

Create workflows

For your ERP to work properly, you must specify when each operation takes place. For example, there needs to be a trigger whereby the ERP will consult the CRM or add a new entry to it. You might do this in real time as customers place new orders, or when they call the customer service.

Organize your data

Your ERP shouldn’t be looking for information in the wrong places. Not only does this lead to computer glitches, but it can also result in the wrong answers at the wrong time. To avoid this, sort your information into categories, such as “invoices,” “orders,” and “service requests.” This way, your ERP will be more likely to properly process all data.

Connect your software

Or perhaps just as importantly, set the interaction rules. This means that you need a map between programs used by the ERP, and some way for them to communicate. These days, the most popular choice is an API. These are especially useful because they exchange data in real-time.

At the same time, you should configure your ERP so that the data exchanges are automatic. This way, you will minimize your employee workloads and keep the possibility of errors to a minimum.

Key Takeaways

Integrating ERP systems with other applications isn’t that difficult if you know what you’re doing. In fact, some technical know-how and common sense will go a long way towards setting up the best integration for your business. Simply set everything up so that programs communicate at specified times and using specific rules, and everyone has access only to the data they are authorized to see.

What is EDI (Electronic Data Interchange)?

EDI is a standardized set of protocols whereby computers can exchange information automatically. Essentially, it is an early computerized version of sending a fax, in that it can arise at the target location very quickly. The backbone of EDI is standardized documents. For instance, within and EDI standards there is a specific form for purchase orders, invoices, and other business documents. These allow the destination computer automatically read the document and record its contents.

Although EDI is an old technology, it is still common and useful in a highly connected world. In fact, it’s a great example of items developed early in the computer age surviving until the present day. There are a couple of reasons for this. First, they are very handy to use since the formats are standardized and machine-readable. Another reason is that EDI documents fit in well with other business systems, such as financial reconciliation software.

Key Takeaways

it’s often easy to. After all, the vast majority of them are no longer in use. For example, old computer programming languages do not necessarily produce modern software. However, unlike many other things in technology, the EDI is just as relevant now as it was when developed back in the 60s.

How Does EDI Work?

EDI works in two ways. First, the EDI standards make it easy for companies to exchange information without significant risk of a misunderstanding. For example, if a business sends their supplier a purchase order over EDI network, then the supplier knows to automatically send an invoice and dispatch the products purchased. Besides, there’s little else that the supplier must do. 

Second, EDI standards make international trade much easier. Contracts and other documents can look different from one country to another, but if you use the EDI standard, you won’t. The only exception to this is if companies don’t use the same EDI standard. In this case, the parties will need to use an intermediary who translates the documents.

Key Takeaways

Despite having been used for decades, the continued use of EDI protocols is common with B2B sales. If nothing else, that is a good testament to the usefulness of this platform. After all, with few exceptions, business people will often quit using things that do not work well.

How ERP-Integrated EDI Can Benefit Your Business

As with many other automation tools, an ERP-integrated EDI can serve your business well. For one thing, the focus on automation drastically reduces the chance that your documents will be misread or misunderstood. That’s because, once the data is sent on a standard form, it will be read by another computer. Furthermore, the forms themselves can be populated by your ERP. This reduces yet another opportunity for error.

Likewise, an ERP-integrated EDI helps drastically reduce errors. Ideally, you will set up your ERP to fill out and send the standardized document. This is especially valuable because this sort of paperwork takes a lot of staff time and many companies.

EDI paperwork also helps with international trade. If you sell your products online, and are willing to ship your products overseas, you need to worry about customs on both sides of the border. You need to document both the terms of the sale, and also make life easier for the recipient countries’ customs. However, the biggest benefit is the avoidance of miscommunication because you can use other documents to prepare or send import paperwork.

Finally, using the EDI exchange can also help protect your business from liability or charge-offs. Just because your email or fax shows the terms and conditions of each transaction. With fewer opportunities for misunderstanding, there are also fewer chances for torts.

Key Takeaways

an ERP-integrated EDI system benefits your business through improved communication. It also reduces your liability and the chances for other complications, and finally, if you send a lot of packages overseas, these specialized systems make customs forms and other documents easier than ever. 

Conclusion

One of the biggest challenges in business is often difficult communication. This can include scenarios where one department does not speak to the other department, lost orders, over-sales situations, and even trouble with a foreign government. Fortunately, with the right ERP, it’s easier than ever to track and use all of your data efficiently. All you need to do is set it up properly.