Posted 03.03.2022
To operate in the B2B space is to operate at scale. While many businesses cater to both consumer and business customers, business customers have very different needs. The most obvious of which is volume. Business clients typically require much larger and more complex orders than their consumer counterparts. Pricing is also more complicated. And more physical, digital and human resources are required to meet the needs of B2B clients.
Unless these resources are properly marshalled, processes can be slower and less efficient than they should be. Productivity can be lost, and profit margins can be eroded. And given the sheer scale, volume, and complexity of orders necessary to operate in the B2B space, it only takes a few missteps to plunge a company’s cash flow into jeopardy. This is why enterprise resource planning (ERP) is so important in the B2B space, especially in growth sectors like ecommerce.
Here we’ll take a look at the role of ERP in the B2B ecommerce space, and how integrating ERP software into your existing IT infrastructure can benefit your business.
Before we start talking about the role of ERP in ecommerce, perhaps we should clarify exactly what we mean when we talk about enterprise resource planning.
ERP is a fairly broad umbrella, encompassing everything from technology to finance to human resources. In its simplest form, ERP means getting the most out of your current operational infrastructure. This may mean different outcomes depending on the needs of your operation. It can mean making your business processes more efficient and freeing up more of your employees’ time. It can mean improving integrations so that your operational software is not siloed and data is shared more freely between applications. It can mean employing automation to make your processes more streamlined and ease the pressure on your frontline employees.
When we talk about ERP today, we inevitably talk about software integrations. But ERP is nothing new. The term ERP first came into being in the 1990s. But the truth is, at its core, ERP has been around since the 1960s when it was first applied to inventory management in the manufacturing sector. In real terms, ERP takes the form of a customised suite of digital applications. These collect, store and manage data from a range of business activities and processes. This can be interpreted to yield actionable insights that can make operations more efficient.
But how does this relate specifically to ecommerce?
The role of ERP in B2B ecommerce is to integrate all aspects of ecommerce operations into a single system. These usually include:
When these activities and departments are siloed, it can lead to operational inefficiencies that may impact the customer experience. For instance, integrating your CRM (customer relationship management) with your ERP software can allow users to see both customer behaviours and back-office administrative activities from the same hub. These are updated in real-time, enabling you to be proactive in keeping up with your customers’ changing needs and track the efforts you’re taking in order to meet them.
Without this integration, operations may be prone to the database errors and productivity loss that can come with manual data entry.
It’s (hopefully) plain to see that ERP integration can make B2B ecommerce operations more efficient. But before you invest in the overhaul that ERP integration may require (especially if you’re currently using older systems), you’ll want to know more about the benefits you can expect.
Of course, ERP /ecommerce integration is only as effective as its implementation. Properly used, however, it can have the following benefits for B2B ecommerce merchants:
B2B ecommerce is much less cut-and-dried than its B2C counterpart when it comes to pricing. Usually, B2C customers all pay the same price. When operating in the B2B space, however, it’s much more prudent to offer bespoke pricing based on order volumes and frequency. The greater the lifetime value of the customer, the more favourable a rate they will expect.
Sometimes pricing is negotiated between the customer and the merchant. Sometimes it is generated dynamically using changes in inventory data. Or merchants may even offer a combination of both. Throw in tiered pricing, expanding product catalogues and renegotiated rates and pricing can get very complicated.
Integrating ERP with data from your CRM can provide a central repository for contracts, pricing and invoicing. So you can see the most accurate pricing for customers in real-time.
Ecommerce and ERP integration provides much greater scope for automation than using numerous siloed systems. Processes that would usually be performed manually can be automated. Common examples include updating inventory data, updating changes to invoicing data, and generating regular reports.
With these functions taken care of automatically, your team has more time and effort to focus on the customer. They’re able to offer a higher standard of personalised support— resolving customers’ issues and strengthening their relationship with your brand.
Whether you operate in the B2B or the B2C space (or both), you should approach your customers on familiar ground. Whether they’re making professional or personal purchases, customers increasingly expect to see your brand on different channels. This means that they’re not just making purchases on your ecommerce website but via social platforms, purchases in a physical location or even placing orders over the phone.
Integrating ERP with your CRM centralises customer order data, no matter which channel/s they use to make purchases. So your brand can deliver the same quality across your clientele’s preferred channels.
The pandemic has caused a slew of supply chain issues for all kinds of businesses. Issues that can, even now, create friction between merchants and their customers.
B2B customers can still be frustrated when a merchant’s product availability doesn’t match what’s displayed on the website. What’s more, if they are able to order an item that is later revealed to be out of stock, this can lead to embarrassment for the brand and potential damage to the customer relationship.
Integrated systems mean that B2B ecommerce merchants and customers can track the availability of products in real-time. So both parties have complete transparency when it comes to your inventory.
You’re ambitious. You want your business and brand to grow. And with each new prospect that you convert, you get one step closer to achieving your goals. But without the proper infrastructure, growth can make your operations increasingly unwieldy.
Operational complexity and greater capital investment can often prove barriers to growth. And while ERP integration is certainly an investment, it can also make it easier and more cost-effective to scale your business.
Increased process automation and centralised data make it much easier to grow your business at scale. As your customer base broadens and the data you collect grows in volume, ERP integration can provide a central repository for customer, transaction and user data. This can be mined for actionable insights that can influence decision making, increase operational efficiency and help to facilitate sustainable growth.
With business growth and expansion into new territories come new compliance obligations. Obligations that can muddy the waters of your operational processes. Integrating ERP software into your existing B2B infrastructure can streamline the business of compliance. So you can operate with peace of mind without spending a fortune.
Region-specific tax or customs regulations can be tied to individual purchases. Accounting and tax data can also be integrated with other systems like inventory management. It provides you with a centralised repository for all data pertaining to invoices, contracts, tax, customer payment methods, and anything else that could cause compliance headaches.
This combination of increased automation, improved inventory transparency, and a lighter administrative load for your team can only lead to an improved customer experience.
With ERP integrations, brands can deliver omni-channel experiences that empower customers and provide them with autonomy and control over their favourite products, and fulfilment preferences. With less time dedicated to manual processes, team members can instead focus on delivering consistently outstanding customer experiences.
No business can be completely future-proof. But in a rapidly evolving B2B landscape, brands need to be as agile and flexible as possible.
ERP integration streamlines operational processes and provides faster and clearer reporting. So that businesses can stay ahead of the curve, changing their business models to suit the changing needs of their customers or to enable them to expand into new markets.
With near-infinite customisations, ERP integrations can help your business to respond to future changes in the market with lightning speed.
ERP is a tool. And like any tool, its inherent capabilities need to be combined with proper implementation. Adhering to best practice for ecommerce ERP integration can ensure that you get the most out of your software suite.
With that in mind, here we’ll look at some tips to help make integration as effective and cost-efficient as possible.
Ultimately, the function of an ERP system is to facilitate the movement of data from one place (or application) to another. It’s up to you to decide what data you want to send, where you want it to be sent to or from, and how often you want it to be updated. You can add points of integration as your operation expands. However, common starting points include:
Now that you know what data you want to integrate with your ERP software, you need to start planning for its migration. Data migration is something that you’ll only need to do once. But in order to minimise disruption and operational teething problems you need to do it right. If you’re switching to a new ecommerce platform, you’ll also need to factor in the migration of data from your old platform to your new one.
Common steps for new migrations include:
With a clear data migration plan, you can significantly mitigate the risk of mishaps, downtime and potential impact on the customer experience.
But no matter how meticulously you plan, there’s always a chance of things going awry, and data failing to reach its required destination. Your migration plan needs to take the risk of failure into account.
Setting up automated email alerts can enable your team to respond to issues like missing tracking numbers in either the ERP or ecommerce database. Make sure your team knows how to use event logs to troubleshoot when things go wrong, and use the data contained in them to bring about a speedy resolution.
Likewise, you should ensure that your ecommerce platform can operate independently of your ERP if, for whatever reason, it goes down. It’s also essential to make sure that data is automatically updated when your ERP comes back online.
Some B2B ecommerce merchants may combine ERP integration with ecommerce replatforming to ensure that they get the best of both worlds. Choosing a new platform that is highly scalable, flexible and easy to integrate with your existing infrastructure can make a huge difference to your operational efficiency. It can also help to facilitate smoother ERP and ecommerce integration, and reduce the risk of downtime. The combination of replatforming and ERP integration effectively gives your digital infrastructure a makeover that can ensure that it’s equipped to manage whatever challenges the future brings your way.
