Mastering eСommerce ERP Integration
for B2B Organizations
When developing your roadmap for eCommerce B2B, you must plan for potential roadblocks. Detours along the way aren’t unusual. But, there are a handful of roadblocks so monumental that they bring the trip to a grinding halt. ERP integration is so crucial to the success of an eCommerce implementation that if you don’t get it right it can derail the entire project. So, it’s important to carefully plan for an ERP integration and choose your eCommerce platform wisely to minimize integration problems. When done successfully, an eCommerce ERP integration between platforms is crucial for leveraging the power of a fully digitized sales environment. This includes benefits for all aspects of the business from:
More accurate order processing as a result of reduced manual order entry. This saves time and increases throughput in addition to reducing order and shipping errors.
Improved inventory control through automatic synchronization of inventory. Customers get access to accurate inventory levels without the need for additional support.
Automatic notification of order shipment to customers and online shipment tracking.
Simplified inventory management through synchronizing product stock and availability.
Automated tax compliance eliminates risks from rate and collection errors
Ability to scale effortlessly without additional resources.
Targeted sales promotions to high-value customers that result in increased profit. When the data from the ERP is integrated with eCommerce, marketing efforts are more targeted and successful.
What’s in Your ERP and How It Helps eCommerce
Your enterprise resource planning (ERP) software is usually the backbone of your company’s IT infrastructure. It handles your accounting, customer database, manufacturing schedules, materials management, ordering, and shipping. It’s a powerful business tool. And because your eCommerce platform is a powerful sales tool, it needs to work and play well with your ERP. But that isn’t always as easy as you think it might be. That’s because of the nature of your ERP and what it contains.
Data Variety and Volume
Your ERP is the repository of your company’s historical data. That’s great because you need this information to analyze everything from production trends to the effect of seasonality on sales. However, the vast variety of information in the ERP poses a challenge in itself. That’s because with any data system, the more data fields you have, the more difficult the integration. For successful integration, it’s vital to identify early on during planning exactly what data in the ERP should be synchronized and integrated with your eCommerce system. In order to do this, you must first understand the types of data that will be shared between the ERP and eCommerce systems and why sharing this data is important.
- Product Information – So that customers receive the product they order accurately,
product names, SKUs, and descriptions must match.
- Customer Information – Accurate shipping and billing requires that contact information, shipping information, payment terms, and credit status be shared.
- Pricing – Since most B2B transactions are based on negotiated pricing, the appropriate prices and rules must be used by both systems.
- Shipping – Fulfillment rules, shipping logistics, order status and bill of lading information must flow between the two systems for shipping, inventory, and account management purposes.
- Inventory – Customers, purchasing managers, and warehousing personnel all rely on up-to-date inventory information. This means inventory status (e.g., in stock, back ordered, discontinued), quantities, and lead times must be coordinated and synchronized.
- Order/Invoice Information – Accounting teams, customer service reps, and customers need access to complete order information. This includes information on current orders and well as prior order history. This means sharing data on the order line items, prior order/invoice history, current order/invoice status, status on sales and purchase orders, and payment information.
- Taxes – Interstate and international transactions are subject to a variety of tax codes, rules, and rates. The ERP and eCommerce platform must share this data automatically to increase compliance and minimize risk. Tax codes, rates, and rules must be shared between the two systems.
- Returns – Because accidents, defects, and shipping errors happen, return merchandise authorizations and credit memos are part of doing business. Both systems must share this data, so customers and employees have access to the same account data.
In addition to the data listed above, the entire size of the databank should be considered. If your ERP contains data on hundreds of thousands to millions of SKUs, your eCommerce platform must be able to handle that volume of data as well.
Because ERP is integral in managing a company’s success, the technology isn’t changed often. Upgrading may or may not have occurred. It’s not uncommon for even updated ERPs to be based on older technology. A current ERP could be based on software that is anywhere from 10 to 20 years old. From a practical stand-point, an ERP may not readily accommodate connection into third-party systems. This older technology can make integrations even more complex as the outdated technology must seamlessly marry to the new technology. Oftentimes, in a legacy ERP environment, IT departments may have spent years configuring the system, fixing issues, and creating workarounds. And that leads us to the third characteristic of why ERP integrations are complex.
Because no two businesses are alike, ERP systems typically don’t work well without some level of customization. Whether you use SAGE or SAP, chances are your ERP installation has been so customized that it isn’t similar to any installations of the same software at other companies. Your ERP installation is unique to your company’s needs and workflows. That’s a good thing. But, unique ERP installations require a unique eCommerce integration, too.
Because your ERP contains extensive data, utilizes older technology, and has been uniquely customized, integration with your eCommerce platform can be a challenge. You’ll need to decide which system will be the master data source. Will it be the ERP or the eCommerce platform? Because the ERP has tentacles that extend into every department and function, it will most likely be your master data source. But that isn’t always the case. That’s why it is important to have that internal conversation and formally identify the master data source early in the planning stages. Failing to create a comprehensive integration plan can result in delays, additional expenses, and additional effort. With all of this in mind, what are the keys to a successful ERP and eCommerce integration?
The 4 Benefits of eCommerce ERP integration
1.Better use of data
An ERP integration supplies your eCommerce system with real-time data, turning it into a dependable source of truth. The whole organization can benefit from centralized data. For example, marketing and sales teams can create powerful reports to help them make calculated and informed decisions.
2. Inventory visibility
Crises can bring spikes in demand and frequent out-of-stocks even to the best of sellers. Without an ERP integration, it’s near impossible to keep reliable information on your eCommerce website. An ERP integration holds an accurate inventory record for both eCommerce staff and customers.
3. Cost savings
Suppose you don’t sync purchase information from your ERP to the eCommerce system. In that case, you’ll have to hold on to unneeded inventory, create inaccurate projections, and relay wrong information to vendors or suppliers. The result? Gaps in stock, opaque transactions, and overall inefficiency.
4. Customer experience
Buyers increasingly prefer omnichannel experiences and self-service over calling sales reps about their orders. An ERP integration allows for better account tracking and personalization, automatically delivering customers their order status, order history, and shipping data.
Understanding ERP and eCommerce Data Flows
Before you start exploring your ERP and eCommerce options, it’s important to understand how data currently flows and how and when data will flow once your ERP eCommerce integration is complete.
As you map out your data flows and their sources, ask yourself the following questions:
If you currently use EDI, where will the interchange take place once integration is complete? What about new customers? If one goal of eCommerce is to drive new business, how will new customers be handled once they arrive? What about offline customers that place online orders? How will offline and online accounts be linked? See where this is going? For successful integration, our advice is to use workflow diagrams to map the entire business. It will help you and your integration partner to have a visual representation of your various business processes. Only then are you ready to consider an initial migration and on-going integration plan.
ERP Integration Strategies to Consider
A successful B2B eCommerce ERP integration begins with extensive planning. It’s true for any project. So, a successful integration begins well before you’ve even selected your eCommerce platform. You need to understand how data should flow, build a migration plan, develop a synchronization strategy, and incorporate contingencies for future growth. Only then will you be ready to select your ERP integrated eCommerce solution.
Point-to-Point (P2P) Integration Model
A common integration model when your business has only a few applications is the point-to-point or one-to-one integration. Point-to-Point integrations offer a lightweight method for one application to be connected to another. While this model can be adequate for simpler integrations, it quickly starts becoming unmanageable as the number of integration points increase.
A P2P integration for two or three applications is quite simple, but it starts getting complex when more applications are involved. For example, if four different systems need to be integrated together, this means that the total number of point-to-point connections can be up to 12 according to the n(n-1) connections rule (also referred to as the n-squared problem). It’s not uncommon for large businesses to have hundreds of different applications that all need to be integrated. In this scenario, businesses should look towards a middleware integration model to reduce complexity.
Middleware Integration Model
The middleware integration model is when a centralized software sits between multiple primary systems, like an ERP, Product Information Management (PIM), and eCommerce system. Instead of each application requiring a separate connector to connect into every other connector (as is the case in P2P integrations), middleware uses a standard method for connecting a common system to the entire network. A few technologies that provide middleware capabilities include Mulesoft, Apache Camel, SAP PO (Process Orchestration), SAP HANA Cloud Integration, and Microsoft Azure Logic Apps. It’s important to note that there are different ways in which you can setup a middleware architecture. We’ll be focusing on the HUB and Enterprise Service Bus models in the next sections.
The HUB or Hub/Spoke model is a type of architecture when creating a middleware integration layer.
In this model, the spoke connects to an application and converts the application’s data format to a format which the Hub understands. The Hub brokers all messages and takes care of content transformation of an incoming message into a format the destination system understands and routes the message.
A hub/spoke model could be a great option if you are confident that the number of integrations and the amount of data to be integrated would not exponentially increase over time and/or you have got sufficient hardware to scale for the foreseeable future.
Enterprise Service Bus
Enterprise Service Bus (ESB) is another type of architecture when constructing a middleware integration layer.
Its core concept is to connect different applications to a communication bus where you then enable each application to talk to the bus. The bus acts as more of a messaging conduit without having the pressure of middleware tasks (i.e. data transformation & routing).
In short, the key difference between hub/spoke and ESB is that for the ESB architecture, the integration engine that performs message transformation and routing is distributed to the application adapters rather than centralizing it to a single hub. This makes EBS multiple times more scalable.
The most common reasons companies implement an ESB is for organizational agility and scalability. As new applications are introduced to your business, ESB offers a simple and modular system which reduces time to market for new initiatives.
Selecting a Synchronization and Processing Strategy
Regardless of the integration model you select, your business will have two plans to map out for a successful integration; and both plans require you to select a processing strategy. The first plan is your initial data migration. How will product and customer data be loaded? As previously discussed, data such as SKUs and customer IDs must be consistent across both systems. Be sure to allow adequate time for extensive testing of your data migration before going live. Don’t let your customers be lab rats.
During your business’ digital transformation, it’s important that customers have a positive experience from the first interaction. So, build in plenty of time for QA and testing. As important as your initial migration plan is your ongoing synchronization plan, or your second plan. You must carefully consider how data will migrate between the two systems on an ongoing basis.
Will data migrate in real-time? That’s the Holy Grail of some ERP integrations, but it’s expensive and usually requires extensive programming. Will data synchronize on a batch basis? This requires extensive processing resources. The final decision is a strategic one that requires an assessment of your available resources and data needs. You may find that a mix of real time and batch processing is the ultimate answer. That’s not unusual. Here’s the major differences between the two strategies
With real-time B2B eCommerce ERP integration, the source system is continually monitored for new transactions. When a new transaction is discovered, the system responds immediately by integrating the transaction with the target system. Each transaction is added as it occurs. This type of synchronization is necessary when data is time-sensitive. It may also be the best approach if you anticipate a large number of transactions occurring on a regular basis. The larger the number of transactions, the longer it will take a batch of them to process. By processing in real time, you avoid long batch runs that hog resources and prevent other jobs from executing.
This strategy provides the most current and up-to-date data and efficient processing of a large number of transactions, but it does have drawbacks. This type of synchronization can be complex. It requires extensive development skills and expertise as well as the time necessary to develop the necessary complex integration maps that make this happen. These maps must identify the specific data to be integrated while excluding unnecessary information. That’s because for real-time processing to be efficient, you must only integrate the data that is required to be synchronized. Synchronizing more data than necessary is a waste of resources and offsets the benefits of real-time processing.
When your ERP and eCommerce platform are integrated during data synchronization, both will serve as target and source depending on the information that is updated. For example, as orders are processed, the order data flows from the eCommerce platform (source) to the ERP (target) for fulfillment. Once the order is processed, the shipping information and invoice will typically flow from the ERP (source) back to the eCommerce platform (target). Because data flows in both directions, the ERP and eCommerce platforms are at times alternately the source and the target. This added complexity is just another reason that visual mapping of data flow is helpful during the integration process.
The other option is batch ERP eCommerce integration. Where real time integration processes each transaction as it occurs, batch integration processes all of the data that matches a specified criterion into the target system all at one time. Batch integration takes a great deal of processing power and a long time to complete, since it processes all records that meet the integration criteria at once. However, if the synchronization is not time-sensitive or if you find that the integration between the ERP and eCommerce platform is limited or it’s important to synchronize with as few processes as possible, batch integration may be the way to go. In addition, batch processing that updates many fields may be a time saver.
Whether you use one or both strategies, keep in mind that information will be flowing both ways. For example, new orders may migrate from eCommerce to ERP in real-time to expedite processing and fulfillment while invoicing and shipping data may migrate in a batch at the end of each business day. So, the execution must be carefully planned as well. For example, will data migrate from eCommerce to ERP and ERP to eCommerce at the same time? Will further customizations to both software packages be required? Based on the strategies you implement, will your job scheduler be robust enough to continually prioritize jobs for the most efficient processing?
Plan for Growth
If a business isn’t growing, it’s dying. If the goal is continuous growth, then a successful integration must scale to accommodate growth. More growth means more products, more customers, more data, and more processing. It also means your business needs to be set up to accommodate automation. Accenture reports that 86% of manufacturing companies say technology will increase “rapidly” or “at an unprecedented rate” between 2017 and 2020. Wholesalers are adding options such as the ability to photo-identify parts in their efforts to improve the digital experience. B2B customers are demanding an omni-channel experience. Wholesalers, manufacturers, and distributors must grow, evolve, and adapt continuously.
Whether it’s in the ERP or the website, how will you handle scalability? If the only constant is change, a successful and durable integration requires a flexible platform that provides solutions when new requirements need to be addressed. Avoid data silos, bottlenecks, and juggling processes with software that turns the data you have into the data you need to grow. These tips will help you select a secure, scalable, and ready ERP integrated eCommerce solution.
Pick Your eCommerce Partners With ERP in Mind
Finally, make sure you pick your integration partner and eCommerce vendor carefully. This is a complex process and your partners must understand the challenges you face and your ultimate objectives. A good partner assesses their success not by the sale made to you, but by the success your company enjoys because of the sale.
A good partner is supported by a quality development community. Look for a partner that is supported by a diverse community of third-party applications. The more robust the eco-system, the easier it is for you to grow and adapt. Whether it’s payment processing or web performance, you’ll want platform partners that bring technology partners to the table with them.
Make sure you select a vendor with whom you feel comfortable. You treat your customers with honesty and respect. Shouldn’t you expect the same from your solution partner? Consider your B2B eCommerce ERP integration early on. These systems should be treated as serious partnerships and their integration should be built on a stable, trusted relationship. Whether the goal is real-time or batch integration, OroCommerce is a B2B eCommerce platform that integrates with any ERP system. We’ve successfully integrated with:
OroCommerce includes marketplace management capabilities, and a built-in CRM to manage the omni-channel experience and provide a 360° view of each customer. The same powerful software can scale to handle catalogs with over 60 million SKUs. It comes out of the box with a flexible and dynamic API and workflow engine that helps maintain integration as you scale.
Schedule a free demo to find out how OroCommerce can integrate with your ERP for B2B eCommerce success. We are ready to work with your business team and your IT team for your success.