Here’s why you don’t need to integrate your ERP & eCommerce. One of the few things that have been consistently volatile and uncertain are business markets. Driven by consumer behavior and choices, no one can predict how changing trends will affect businesses’ bottom line. However, most businesses often demand certainty when purchasing an ERP. Not only this, they go through a harrowing analysis paralysis of ensuring several factors such as:
- Will tearing and transforming the complete technology stack improve performance?
- Will developing and deploying native APIs and integrations generate ROI? and,
- Will the complete cost of ownership be favorable with a custom technology stack?
Choosing the right ERP is akin to choosing the right nutrition for your company. A wrong choice may never let you recover both operationally and financially. You can learn more about ERPs and the eCommerce industry here.
Let’s begin by exploring why would you need an ERP in the first place.
Usually, in your business, there’s an unmet requirement or an objective to be accomplished exposed by your existing technology stack. And now you think that an ERP integrated into your business would yield the desired ROI.
However, there are many forms of ERPs that can throw you in spirals of analysis paralysis. There are usually 3 kinds of major types of ERPs.
1) A core ERP system – where a single cloud-based solution manages all the organization’s software needs
2) A supplementary ERP – where an ERP technology is integrated with the existing technology stack.
3) A module-specific ERP – where you may use collections or specific tools from an ERP (marketing, sales, accounting) and attain the required business objective. These modules can be integrated into your existing tech stack and provide a focused problem-solution for your business.
So you have to decide whether what exactly is your business requirement should you be considering an ERP. Decoupling your existing tech stack should only be done until absolutely necessary.
#1 Failed ERP Expectations
There have been examples in the past where companies like the Dow Chemical Co. spent around a whopping $1 billion on an ERP system. It took an excruciating 7-8 years to implement, it’s a broken promise that resonates in the industry. Imagine the hidden cost of overruns and millions lost in revenues due to operational delays.
There are usually 4 main reasons why ERP implementations get tedious:
- Unanticipated technical and organizational issues,
- Budget Constraints,
- Additional technology requirements,
- Implementation processes are not clearly defined.
In fact for businesses that have a legacy ERP system or on-premise ERP have implementation cost and timelines exceed much more as they have to shift their entire structure to cloud while retaining informational backup in attempting to integrate new technology such as ERPs and their modules.
So maybe you want to do a comprehensive background check whether your ERP provider and the ERP itself can deliver on your expectations and fits well within your business goals.
#2 Ownership Costs?
Despite the delay of the implementation and technical aberrations, the global cloud ERP industry is scaling rapidly exceeding $30 billion in sales. The issue is that there’s a growing demand however a stark shortage of supply, technical talent, and solutions that help scale. By understanding the total cost of ownership you will be able to determine whether the ERP is a right fit for you or not.
Most ERP solutions follow a monthly subscription-based model and this includes software, hosting, support, updates, and upgrades. The capital expenditure from hardware to servers and operations is lower on on-premise and legacy systems but significantly higher on cloud-based third-party ERP systems. So if your company can keep up with the growing financial overtures then sure, shift to an ERP but if not then it may not be a cost-effective choice.
#3 Dangers Of Data Migration
The transfer of old data from an on-premise legacy ERP system to a cloud-based ERP system is often underestimated. Data migration is not just simply limited to a .xlxs extension import and export however all data must be carefully targeted and meticulously prepared in order to ensure secure and appropriate transfers.
What most people get wrong about ERP is that they think they’ll be able to automatically increase the quality of their existing poorly maintained data with an ERP system. The quality of data is subjected to how well it is maintained and that requires human oversight. If you put garbage in, it will spew garbage out.
Also centralizing content and information into a unified platform eliminates security risks that may come with having a large number of hard-drives, platforms, and servers that are dull to manage and track. However, when businesses store crucial information in one place on on-premise devices a fire or a flood can wipe out all information in an instant. So if you’re going with a cloud-based ERP choose a system that is robust, easy to access from anywhere in the world for your employees, and has great operational and tech support for your business.
#4 Size Matters?
While more and more companies are trying to grow and expand exponentially, they’re are considering tools that provide greater accessibility. However, with complex supply chains getting into new opportunities is difficult. A cloud ERP does offer some leverage here as the technology has reduced risks and simplified global processes supporting remote work and employees and distributed users.
But, the caveat here is that it’s also not that easy to adapt. Big businesses may need ERP to manage their extensive and complicated supply chains but this requires extensive operational and personnel adaptions. This is something many organizations overlook or underestimate how much time it’ll take for the organization to train the employees and the company to make the most out of the ERP system.
Small product-driven companies integrate new sales channels and fulfillment processes quickly and cost-effectively. Doing this they also maintain full visibility of their supply chain as they scale operations, however, ERPs for big businesses might not be this nimble a solution and make the entire adaption cumbersome instead of agile.
So, make sure you take into account the nature and size of your organization and then choose the right ERP which is agile and lets you hit the ground running.
#5 Next Steps?
Ask yourself these three questions.
#1: Which systems does your ERP will natively integrate with?
Often industry-leading ERPs lack native integrations with eCommerce or supply chain solutions this will have you build and maintain your own through APIs or third-party consultants. Find systems that integrate natively with your ERP.
#2: Who or what type of business was your ERP designed for?
Your industry and intent will matter and you’ll realize that ERP systems built for brick & mortar stores or manufacturers are completely different from eCommerce, wholesale, and other ERPs. They may rely on third parties to layer on such functionality at an extra cost.
#3: Will I have to switch my entire tech stack?
If choosing an ERP seek evidence that you can keep your favorite software solutions from your existing technology stack. Add layers to your own solid foundations.
While it can take 6-12 months to migrate data, integrate and implement an ERP system of your choice, it may be the right decision if you’re a large enterprise.
Conversely, the advantage of working with a multi-solution ecosystem – may propose a cost-effective option that enables you to customize your existing tech stack with only solutions that were designed to fulfill requirements for organizations specific to the industry.
Asking the right questions is key – well as weighing the implementation risks – will help you objectively focus and determine whether an ERP is a right solution right now or in the future.
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You can learn more about the eCommerce industry here.
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