• Zabe Siddique

Why Ecommerce Companies Need ERP

With online sales jumping 44% in 2020, ecommerce companies are turning to unified, cloud enterprise resource planning systems to run their end-to-end business operations.

Ecommerce is experiencing a major growth spurt and it’s dragging e-tailers right up the hill along with it. Consumers spent $861.12 billion online with U.S. merchants in 2020, up an incredible 44.0% year-over-year, according to Digital Commerce 360. That’s the highest annual U.S. ecommerce growth in at least two decades, the company says, and nearly triple the 15.1% jump that the market posted in 2019.

These gains present a mix of opportunities and challenges for ecommerce companies, many of which had to make quick moves to improve both their front end (customer facing) and back end (operational) systems in order to keep up.

Those companies running with disconnected systems and spreadsheets found themselves in a tight spot. The cracks in the pavement emerged quickly during the early stages of the pandemic (i.e., shipment delays, stockouts, supply chain interruptions), and continued through much of 2020 as ecommerce companies worked to keep up with demand.

TechCrunch estimates that the pandemic accelerated the shift away from physical stores to digital shopping by roughly five years. “Around 75% of buyers and sellers now prefer digital options over face-to-face due to both safety and speed & convenience,” ROI Revolution points out. “But even with consumers’ heightened demand for digital options due to the coronavirus pandemic, many retailers are failing to meet expectations.”

Disparate Systems and Spreadsheets Don’t Cut it

At least some of the challenges facing ecommerce companies right now can be traced back to their use of disparate technology systems that don’t “talk” to one another, Excel spreadsheets, and manual processes. With their ecommerce storefronts, customer relationship management (CRM) systems, warehouse management solutions, and other critical systems operating independently of one another, getting all departments and employees working from the same playbook is virtually impossible.

This is why ecommerce companies need enterprise resource planning (ERP) systems. Once the domain of large enterprises with complex operational needs, ERP has since become “democratized” thanks to the popularity of cloud computing, which put the unified business platform into the hands of companies of all shapes and sizes.

Ecommerce companies are particularly well positioned to leverage the power of ERP.

According to NetSuite, ERP integrates and automates essential financial and operational business functions and provides a single source of data for inventory management, orders, procurement, distribution, and fulfillment—all the things that an ecommerce business manages on a daily basis. And because cloud ERP is hosted and provided as a service to businesses, it supports the same, or better, functionality as on-premises systems without most of downsides, (e.g., upfront licensing fees).

The Wins

The list of benefits that ecommerce companies can extract from ERP is lengthy and growing. Not only does the system integrate data from all of the important departments (e.g., accounting, HR, distribution, fulfillment, customer service), it also automates manual, time-consuming tasks like financial accounting, inventory control, payment processing, and shipping (to name just a few).

By integrating all financial and operational aspects of an ecommerce business onto a single platform, cloud ERP combines all ecommerce orders—and across all channels—into one database. Employees no longer have to log into multiple different systems to mark orders as “fulfilled,” customer service reps have a complete view of every buyer right in front of them, and sales teams can keep information organized across myriad different selling channels.

By reducing the need for manual entry, ERP helps ecommerce firms save time and money while also reducing errors. Customers are happier, sales teams have everything they need at their fingertips, data is consistent, and overall productivity improves. Accounting teams can generate financial reports at the press of a button, and corporate forecasts are more accurate. Combined, these benefits help ecommerce companies more efficiently serve their customers’ ever-changing demands without having to invest in more systems, processes, or labor.

It’s Time for a Shift

The pandemic has pushed ecommerce sales to new heights and the boom isn’t expected to let up anytime soon. By 2040, in fact, around 95% of all purchases are expected to be made online, which makes addressing current ecommerce challenges and future-proofing operations vital right now. “With consumers increasingly relying on online shopping, ecommerce is opening doors of opportunity to many entrepreneurs.”

Built for the cloud, together NetSuite and CEBA Solutions provides best in class ERP for ecommerce companies that want to access real-time insights, provide better customer service, and reduce their supply chain costs by integrating and automating essential financial and operational functions. By blending ERP, CRM, and ecommerce into one, companies can effectively streamline their operations and position themselves for success as online sales continue down their double-digit growth path.

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