eCommerce ERP : Top 6 Market Leaders

If you manage an eCommerce business, you will likely understand an ERP system. ERP, or Enterprise Resource Planning, has become increasingly common in the industry and is used by small and medium-sized businesses and large corporations. eCommerce ERP handles various business management functions, including procurement, logistics, and financial reporting. These systems help businesses automate processes, gather insights, and optimize workflows. Effective ERP software allows eCommerce platforms to run more smoothly and cost-effectively.

This article explores what eCommerce ERP is, the different types available, and the critical elements that define them. We’ll also discuss how integrating ERP into eCommerce is crucial for the success of modern businesses.

What Is an eCommerce ERP?

Enterprise Resource Planning (ERP) is a unified software system that integrates various organizational business operations. For eCommerce businesses, ERP systems consolidate and automate essential functions like inventory management, order processing, and financial accounting. This integration facilitates improved data flow and system coordination, enhancing accuracy and reducing process fragmentation.

An eCommerce ERP system also merges back-office activities such as warehouse human resources, management, and information technology services. This integration diminishes the need for multiple separate systems. By pooling data from various departments, eCommerce ERP systems enable businesses to maintain precise inventory levels, optimize order fulfillment, and enhance customer service. Adopting an ERP system in eCommerce settings can decrease manual errors, aid in making informed decisions, and manage resources more effectively.

Different Types of eCommerce ERPs

When choosing an ERP system for your eCommerce business, knowing the available types is crucial, as each comes with features and integration options. Let’s go through the main types of ERP systems:

• Generalist ERP Systems: These are built to cater to a broad range of industries. They cover common business functions like financial procurement and management. Although customization options might be limited, they’re great for meeting the basic operational needs of various industries.
• Modular ERP Systems: These systems offer the flexibility to add specific components. You can choose the features that best fit your unique business processes. This model is especially useful for companies with specialized needs, allowing them to customize the ERP system accordingly.
• ERP Suites: These comprehensive solutions combine multiple eCommerce platforms and add-ons into one application. ERP suites are ideal for larger, more complex organizations that need a single system to efficiently manage various aspects of their operations.

Top ERP providers, such as Oracle NetSuite, SAP, and Acumatica, have solutions that can meet different integration requirements, helping you choose the most suitable system type for your business needs.

Key Features of eCommerce ERP Integration

ERP systems enhance operational efficiency by automating routine tasks and offering detailed insights, reducing manual labor and increasing accuracy. These systems are particularly adept at handling workflows like order processing, payroll, supply chain management, and accounting tasks.

When combining an ERP system with an eCommerce platform, it is crucial to include certain features such as:

CRM (Customer Relationship Management)

A thriving eCommerce business needs to efficiently track activities throughout the sales cycle and manage leads, contacts, opportunities, and customer accounts standardized. A fully integrated CRM solution provides each department access to synchronized, real-time data from a single source. Establishing a customer database within integrated systems allows for prompt customer communication through offers such as sales, discounts, and special promotions. These promotions are generated on the eCommerce platform, and the ERP system recognizes and records these for future reporting.

The integration of eCommerce ERP and CRM also facilitates an omnichannel commerce environment. Your centralized CRM will associate each order with the correct customer, regardless of the purchasing channel used. This provides a comprehensive view of your past and present customer interactions, enhancing customer relationship management across multiple platforms.

Order Processing

Order processing within ERP systems is designed to automate the full order lifecycle. This starts with capturing and verifying customer orders, moving through to order fulfillment, shipping, and delivery tracking. The integration with shipping carriers enables real-time tracking updates, providing businesses and customers precise information regarding the order’s status.

ERP systems also streamline the processes of returns and exchanges, simplifying these operations and enhancing customer satisfaction.

Finance Management

While individual software solutions exist for managing your general ledger, accounts payable, and accounts receivable, a cloud-based ERP system can manage these tasks while delivering real-time updates on eCommerce activities. In an eCommerce ERP setup, the system instantly updates the sales order and financial records once a transaction is made online. Revenue is recognized when payments are processed.

The ERP system also monitors transactions, inventory, and customer interactions, providing a comprehensive platform for financial management. By integrating an ERP system with your eCommerce operations, your business can achieve better auditing processes and fluid sales and financial data synchronization.

Product Information Management (PIM)

Centralizing your product information within an eCommerce ERP system is vital, particularly when selling products through various channels. ERP systems consolidate supplier details, pricing, and product options in one central repository. This ensures consistent product information updates across all channels and guarantees accurate and uniform distribution of product details.

With PIM integrated into an ERP solution, businesses can efficiently manage and refresh their product catalogs. This integration not only simplifies information management but also enhances the reliability of product data across multiple sales platforms.

Logistics Management

An ERP system effectively manages logistics, streamlining each phase of the distribution chain. This includes processes like wave and batch picking, packaging, and order shipping, as well as automated procedures for purchase order receiving, transfers, and inventory counts. Additionally, the system supports EDI compliance and precise lot and serial numbers tracking.

These logistics tasks are facilitated through ERP automation. EDI compliance is typically managed using third-party software, while lot and serial number tracking helps reduce errors. Moreover, warehouse staff can efficiently complete their duties using mobile phones or tablets.

Multi-Channel Integration

ERP systems offer more than just the ability to list products on multiple platforms. They ensure real-time inventory, pricing, and product information synchronization across all channels, maintaining consistency and accuracy. This functionality helps prevent overselling by automatically adjusting inventory levels across all platforms whenever a sale occurs on one.

Such comprehensive integration is crucial for avoiding customer dissatisfaction caused by differences between the advertised and actual stock availability.

Reporting

ERP systems have analytics and reporting capabilities that offer deep insights into your business’s performance. They feature customizable dashboards that display key performance indicators (KPIs), such as sales trends, customer behavior, and inventory turnover. This data-driven strategy enables businesses to pinpoint areas for growth, tackle operational inefficiencies, and make decisions guided by up-to-date information.

Ways You Can Implement an eCommerce ERP System

There are mainly three ways in which you can implement an ERP system with your eCommerce business:

• Cloud-Based:

This setup involves hosting systems on third-party cloud servers such as Microsoft Azure, Amazon Web Services, or Google Cloud Services. Cloud ERPs are quicker to set up and more popular among eCommerce businesses due to their lower setup and infrastructure costs.

They allow easier integration across different applications without the need for custom coding. The model provides robust security and flexible data management, making it a good choice for businesses needing scale.

• On-Premise:

While many eCommerce businesses are moving toward cloud-based ERP solutions, on-premise systems remain in use, particularly by companies needing advanced customization, greater data control, or tighter integration with legacy systems.

In this traditional arrangement, the ERP system is maintained on your servers. You have total control over the system but require substantial resources for continuous maintenance and updates. This model is common in industries like healthcare or finance, where data storage and protection are critical.

• Hybrid:

This approach merges cloud and on-premise setups. Sensitive data like financial records might be kept on-premise while other functions can leverage cloud advantages. Hybrid models are well-suited for companies with substantial legacy systems, offering custom configurations and enhanced security measures.

Building on these implementation methods, integration techniques such as point-to-point, Enterprise Service Bus (ESB), and iPaaS play crucial roles.

• Point-to-point integration connects an eCommerce platform directly with the ERP system, which is suitable for simple setups but potentially cumbersome as business needs grow.
• The Enterprise Service Bus (ESB) employs a central bus system to facilitate data transfers between multiple systems, enhancing scalability and the ease of adding new components.
• iPaaS, or Integration Platform as a Service, is a cloud-based solution that efficiently connects disparate systems through pre-built connectors. It is popular among modern businesses for its speed and robust integration capabilities.

Third-party integrators deliver custom services for those requiring specialized solutions unavailable through standard methods. Regarding data synchronization frequency, real-time updates are crucial for businesses handling large transaction volumes or requiring immediate data availability for decision-making. Alternatively, batch synchronization processes data at predetermined intervals, which is ideal for scenarios with less critical immediate updates. It helps manage system load and reduce operational costs.

Benefits of Implementing an eCommerce ERP System

Implementing an ERP system in an eCommerce enterprise offers substantial benefits, crucially improving operational efficiency and customer satisfaction. Here are several key advantages to consider:

• Consolidated Sales and Inventory Management

Integrating ERP systems allows businesses to centralize sales data across channels, reducing order errors by 16% and enhancing inventory accuracy. Real-time updates prevent overstocking and stockouts, improving operational efficiency.

• Enhanced Order Processing

ERP-integrated systems streamline order management, reducing manual errors and speeding up processing times. This efficiency contributes to a 21% increase in conversion rates as customers experience faster and more reliable order fulfillment.

• Improved Financial Management

Centralizing financial data through ERP systems provides accurate reporting and enables better budgeting. This integration has reduced administrative costs by 22%, directly improving financial oversight and planning.

• Scalability for Business Growth

ERP systems scale with growing eCommerce businesses, accommodating increased transaction volumes and product lines. Companies using ERP integration see a 67% increase in revenue due to the system’s ability to adapt to market demands and operational complexities.

• Enhanced Customer Experience

ERP systems improve customer retention rates by 11% by providing better visibility of order status, accurate inventory information, and faster issue resolution. These capabilities lead to higher customer satisfaction and loyalty.

• Reduced Operational Costs

Automating routine processes such as inventory updates and financial reconciliations cuts operational costs by 23%, allowing staff to focus on strategic tasks.

• CRM Integration and Personalized Service

Integrated CRM tools within ERP systems allow businesses to tailor marketing efforts and services based on purchase history and demographics. This data-driven personalization has been a key factor in boosting repeat purchases.

Top 6 eCommerce ERPs in the Market Right Now

Choosing the right ERP system is crucial for eCommerce businesses looking to improve their operations, customer experience, and growth. Here’s a rundown of some top ERP solutions designed for eCommerce businesses:

1. Oracle NetSuite

Oracle NetSuite is a cloud-based business management suite that combines various functions such as accounting, order processing, inventory management, production, supply chain, and warehousing.

It features a robust accounting module that automates accounts payable and accounts receivable, eases tax management, and offers valuable financial insights. Its inventory management tools help manage stock levels, track inventory across locations, and ensure efficient warehouse operations through features like real-time inventory updates and integration with shipping systems.

2. Acumatica

Acumatica is a cloud-based ERP solution recognized for its user-friendly interface. It caters to midmarket companies and offers integration tools that seamlessly connect with existing systems, enhancing efficiency through an intuitive user experience.

The platform supports collaboration with modern, cross-module workflows and provides access across all devices due to its cloud-based nature. Acumatica delivers an out-of-the-box solution with customization options to meet industry-specific requirements.

3. SAP ERP

SAP ERP, developed by SAP SE, is a leading enterprise resource planning software offering on-premises, cloud, and hybrid deployment options. The core ERP system, ECC, is part of the SAP Business Suite, encompassing modules for supply chain management (SCM) and product lifecycle management (PLM). SAP’s S/4HANA, optimized for the SAP HANA in-memory database, provides real-time data access within a subscription-based SaaS model.

SAP Business ByDesign targets the midmarket, and SAP Business One is designed for smaller businesses, available both on-premises and in the cloud.

4. Odoo

Odoo is an open-source suite of business applications that includes CRM, eCommerce, billing, accounting, manufacturing, warehouse, project management, and inventory management. It offers both community (open-source) and enterprise (proprietary) versions, providing flexibility for businesses of various sizes.

Odoo’s modular design allows companies to start with basic modules and add more as needed, facilitating scalability.

5. Sage X3

Sage X3 is a cloud-based ERP software suitable for manufacturing, wholesale distribution, and service processes. It also offers on-premises solutions to manage core business functions such as inventory, sales, customer service, and finances.

Sage X3 provides production, supply chain, and financial management, aiming to enhance collaboration, efficiency, and flexibility and provide valuable business insights. It offers personalized access to relevant data, aiding sales, marketing, and customer support teams to perform tasks accurately. The system facilitates cash flow control, procurement, and financial operations management, including general ledger, cost accounting, and budgeting.

6. Microsoft Dynamics 365

Microsoft Dynamics 365 is an intelligent business application suite that combines ERP and CRM capabilities. It offers finance, supply chain management, retail, and more modules, providing a unified platform to manage various business processes.

Dynamics 365 integrates with other Microsoft products, offering a familiar interface and seamless data flow across applications.

Each ERP solution offers unique features and benefits tailored to the specific needs of eCommerce businesses.

Conclusion

Implementing an ERP system in an eCommerce business is a strategic decision that offers substantial advantages. By consolidating core functions such as inventory management, order processing, finance, and customer relationship management, ERPs enhance operational efficiency, reduce manual errors, and improve data accuracy. Businesses can select from various ERP types—generalist, modular, and suite systems—based on their needs and growth plans.

Integrating an ERP system streamlines processes across multiple channels, improves financial oversight, and boosts customer satisfaction. Cloud-based, on-premise, or hybrid deployment options provide flexibility, catering to different operational and security requirements. Leading ERP solutions like Oracle NetSuite, SAP, Acumatica, and Microsoft Dynamics 365 offer diverse features to meet varying business demands.

Investing in a suitable ERP system empowers eCommerce businesses to optimize workflows, scale effectively, and stay competitive in a dynamic market.

Frequently Asked Questions