Benefits of ERP and E-Commerce Integration

Eventually, e-commerce companies experience problems achieving further growth. Management often lacks the time and resources necessary to quickly and efficiently process the growing volumes of data. As a result, they transfer these problems to buyers who don’t receive their order on time or have difficulties with documents. There is a great solution — the combination of ERP and e-commerce in order to increase the efficiency of processes. First Bit works hard to implement ERP for UAE and help businesses grow faster. So, let’s discuss its key features.

When to Use ERP in E-Commerce

Despite the technical progress, many companies still conduct their electronic business in an old-fashioned way. They have well-established online trading and a lot of regular customers. Besides, they keep all their employees involved in inventory control, paperwork, and many other activities.

The greater the role of the human factor in operations, the higher the probability of error. These can be inaccuracies in inventory control, sending an order to the wrong address, or invoicing at inflated prices. The problem isn’t even that the company doesn’t use stock and sales management software.

Implementing these tools does not automatically guarantee successful management on its own. Regular customers become more demanding. To maintain loyalty to their supplier, they want it to comply with several conditions. Here are the main ones:

• Real-time inventory tracking;
• Monitoring order status (at the stock, in the process of shipment, or delivery);
• Timely invoicing for payment, registration of transport, and other documents;
• Guarantees that the goods will be delivered to the correct address within a certain time.

So, what is ERP in e-commerce?

 The Main Reasons for E-Commerce Companies to Use ERP Systems

ERP stands for Enterprise Resource Planning. This includes everything related to the calculation of the cost of production and storage of goods and materials, reports on the activities of the company, and labor costs. Anything that does not relate to interaction with customers. Combining the ERP software package with an e-commerce system can significantly speed up the processing of orders and the generation of reports for company management. This makes the business more efficient.

 Automating Business Processes

Enterprises often use a variety of software packages that are not combined into a single automated complex. Here, employees have to transfer data from one program to another manually. A high staff workload slows down company processes and often leads to errors in the processing of orders and accompanying documents. Combining ERP with e-commerce saves employees working time:

• The possibility of re-entering the description of commodity items in the database and electronic store is excluded;

• The buyer monitors the movement of goods in real-time and places an order based on the actual balance in warehouses;

• Sales reports generated by e-commerce tools are transferred to the ERP package and allow the management to receive operational data on the company’s balance sheet, its profits and losses, sales efficiency of various product groups;

• All this information helps management plan marketing strategies, choosing the most effective ones.

As a result, the companies that implemented ERP integration with e-commerce in time became more profitable.

Company Revenue Growth

The efficiency of the company depends on the one hand on expense reduction and on the other on revenue growth. Integration of ERP with e-commerce helps to reduce the cost of production, purchase, and storage of goods and raw materials. Due to this, the company provides discounts to customers and gains competitive advantages. It also speeds up the formation of orders for shipment to consumers, thus reducing capital turnover cycles.

With the growth of business profitability, a company reduces its dependence on lending. The analysis of orders and sales enables them to more accurately plan the production and purchase of goods, avoiding the overstocking of warehouses. Thus, the proportion of production, storage, and transport costs becomes lower. Finally, its market share grows, which results in the possibility of providing a more flexible pricing policy.

Reducing Administrative Costs

Some of the larger and more established brands on the market suffer from high management costs or unnecessarily large numbers of staff. Personnel have to perform functions that could be automated. These include warehouse accounting, registration, processing documents, planning future activities, and working with contractors and consumers. Here is just a simple example. Companies interested in sales growth can establish incentives for large buyers.

These are one-time and cumulative discounts, promotions, as well as special offers targeted at specific customers. To offer these, you need to analyze customer demands and preferences, the structure of previous orders, payment discipline, and many other factors. Using software for purchase management, you can free up an entire department and increase the efficiency of your staff. This is especially important during economic crises. You both save money and keep buyers with a flexible pricing policy and attractive terms of cooperation.

Sustainable Business Growth

Companies that manage to both reduce costs and increase revenue grow faster than their competitors. Thanks to this, they augment their market share and dictate the new rules of the game. These rules may not be workable for other market participants who have to move into less competitive and, therefore, less profitable positions. Finding and maintaining your niche is hard enough, and you can lose it in just a matter of months.

That is why the company’s management is required to keep up with the times and adopt all the latest in management and management technology. Combining e-commerce and enterprise resource management processes allows you to shift the accent in business planning. Instead of ensuring the company’s activities, you can focus on studying the market and meeting its needs by creating new products and services. This will help make your brand more recognizable and prestigious.

Conclusions

Combining ERP with e-commerce enables a company to raise the efficiency of its personnel. Automation of manual work results in an increase in revenue and a profit on invested funds. These are strong enough arguments to consider integrating ERP into e-commerce if you have not already done this.