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Using E-Commerce as the Connector Between ERP Systems


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As the e-commerce system becomes the principal interface to a company’s clients and business partners, its ability to integrate with internal back office systems such as the ERP and CRM becomes critical to having a single view of products, inventory, customers and partners. This ability to extend and integrate a broad range of diverse systems can also serve as the vehicle for connecting multiple ERPs from different vendors – a task not always easy to do. An e-commerce integration is one of the solutions that can addresses the problem of integrating disparate ERPs at a minimal cost, while also increasing the focus on the business’ clients, streamlining its processes and improving analytics.

 

This article examines how an open, adaptable and extensible e-commerce solution can become this link.

 

Multi-ERP Scenarios Abound

There are several instances where a company might find itself facing the possibility of marrying ERP systems from more than one vendor, most commonly Oracle, SAP, Microsoft, Infor, Epicor or UNIT4. One of the most common of these scenarios involves a large, multinational corporation that requires an ERP more suitable to a smaller subsidiary that might require back office support for different tax codes, languages and currencies. Another scenario involves subsidiaries that inhabit completely different spaces in the value chain, i.e. manufacturing vs. distribution. And yet another likely situation results from mergers and acquisitions.

Whether to eliminate competitors or to pursue strategic growth, mergers and acquisitions are a means of achieving larger corporate goals. Once the deal is complete, and the dust settles, a corporation often faces the task of integrating the new unit into the larger whole. One aspect this almost always involves is aligning at least some of the strategic business unit’s (SBU) back office systems (i.e. accounting, finance, purchasing, inventory) with the parent’s.

 

Two-tier ERP Strategy Gathers Speed 

Increasingly, rather than tossing out the subsidiary’s legacy ERP in favor of extending corporate’s ERP, a more common-sense solution is to employ a two-tier ERP strategy. Tier 1, or enterprise-level ERPs, are often much too large, unwieldy and costly for smaller business units. Therefore, this strategy informs subsidiaries to either retain their legacy ERP - which is often a smaller, size-appropriate system - or migrate to a Tier 2 solution, which, again, is better attuned to the business’ size, geo-political location and industry. Often, executing on this model may involve ERPs from two different vendors, such as SAP and Microsoft Dynamics AX.

As mentioned earlier, the reality of a corporate parent and its subsidiary possessing two ERPs from two different vendors presents a challenge to the CIO. To bridge this gap, many are now looking to another piece of the value chain – the customer-facing e-commerce platform.

 

Using E-Commerce as the Hub and Spoke 

Implementing an e-commerce engine to integrate disparate ERPs, as well as render them more customer-focused, has several distinct advantages over other solutions.

First, a centralized e-commerce application would act as a hub-and-spoke connector enabling multiple ERPs from different vendors to share data with the corporate parent. This would eliminate the cost associated with replacing a legacy ERP or extending corporate’s ERP license to include many more users. It would also eliminate the additional labor cost and high likelihood of error with manual data entry as a means of updating corporate’s ERP with the SBU’s back office information.

Second – and possibly more important – by merit of the e-commerce engine’s customer-facing interactivity, the use of the e-commerce system as an integrator would render the ERPs themselves much more attuned with their B2C and B2B customers. Orders, whether placed by sales personnel or by the customers themselves, would instantly flow from the e-commerce cart to the ERP for processing and fulfillment. This reduces response time, streamlines processes and ultimately results in increasingly positive customer perception.

Third, businesses rely on the timely nature of their analytics in order to make the best-informed decisions about products, pricing, promotions, sales channels, supply chain logistics and customers. E-commerce platforms, when correctly integrated with ERPs, are second to none in their ability to collect information, sync it with the ERP, and render up-to-the-minute analytics. Such a scenario would allow the company to most efficiently track its sales and marketing channels, including the fastest-growing of all – mobile and social media.

 

Contact us to find out more about how our latest product E-Commerce Growth Engine can act as a hub-and-spoke connector.

 

by Archana Yenna, i95Dev  - E-Commerce Solutions for Microsoft Dynamics

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