Ecommerce: You’re Doing It Wrong

Why you should integrate your web store with your CRM and ERP systems now

When your ERP and CRM are well integrated with your web store, all of the following happen automatically:

• Sales orders are entered directly into your accounting system on the ERP.
• Inventory in your ERP and web store are in sync and accurate.
• Order fulfillment is easier — both systems know about the order and, with good integration, know the status of the order (which vendor it’s being fulfilled with, shipping information, tracking numbers, etc.).
• Client information from online orders is automatically entered, sourced and segmented into your CRM for marketing and sales activity.

Without proper integration, your data (orders, client, shipping, accounting, inventory) either a) needs to be manually updated using CSV import/export or b) tends to be distributed piecemeal across all of your systems and is hard to understand.

If your order volumes are fairly low, that might not be a big deal. As your order volumes increase, tasks like helping clients track their orders, processing returns, filling your orders and running the reports you need to manage your company become challenging and time-consuming.

Usually, companies start with low amounts of integration. That’s probably the right answer since good integration is costly, and low order volumes make it cost-effective to manually dig up the info from different systems as needed. When digging up that info starts costing your admin, warehouse and customer service people a sizeable chunk of their workday, it’s time to pay for integration.

Keep an eye on how much time and trouble the data costs you, and slowly integrate the systems where cost-effective as your business grows. Usually a one-year ROI is a good rule of thumb.

Here’s an example:

A customer service rep takes 20 minutes on average to field a call, and half the call is spent digging up the info they need. Each customer service rep averages 18 calls per day, and you have 5 reps. That means you’re out 15 hours of “data handling” time per day (18 calls x 10 minutes x 5 reps). If you guess that good integration on shipping info would cut that time in half, you stand to gain around 7.5 hours per day of returns. At $15 per hour for an average customer service rep, you’re looking at $112 per day in savings (around $40k per year). If your developers guess it costs $40k or less to do the integration, you’re golden.

So should you buy an ERP like Netsuite or Sage and use their tools to also build your ecommerce store?

ERP systems tend to be very good at managing your accounting and logistics. They keep track of inventory, have good financial reporting, and help you get your products to the people who buy them.

Ecommerce storefronts, on the other hand, are good at presenting your products for sale and helping you find people to sell them to via search engine optimization, PPC campaigns, landing page optimization, email campaigns and the like.

ERP systems don’t make building really effective storefronts easy, and few ecommerce systems make managing your finances, inventory and order fulfillment easy.

Having both is usually the best answer. Doing one or the other might be fine at the beginning. As your business grows, however, you’re likely to find that having specialized software for each piece and integrating the data between the two is the best answer.