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magento & ecommerce

The Whys and Hows of Magento and ERP Integration

eCommerce is one of the main and most convenient ways to buy things today. From the user’s perspective, ordering and purchasing online might seem simple and easy. As a business owner, you know very well that things are somewhat more complicated than that.

Are you considering integrating your eCommerce platform into your ERP system? Yes, you’ve probably come across many businesses doing the same. Clearly, there are a lot of benefits to this integration. It can help you significantly boost your business and let your customers get your product faster and easier.

Magento

If you’re just getting into the world of eCommerce or simply want to boost your knowledge or revise it, knowing the basics of Magento can be very helpful.

Magento is an open-source eCommerce platform that essentially gives you, as an online merchant, a variety of flexible options for setting up your custom shopping cart system. Magento gives you a lot of control, particularly regarding functionality, content, and the general outlook of your store. You can add a variety of themes and plug-ins to make the customer experience on your store page the best it can be.

This platform has a lot of tools attached to its belt, such as SEO, marketing, catalog management, and many other tools. Of course, Magento has even more custom functionalities to brag about, but they do require more advanced programming skills.

ERP

ERP is short for Enterprise Resource Planning. This type of business management software essentially allows a business to automate a variety of back-office functions that incorporate human resources, technology, and services. ERP software includes development, product planning, manufacturing, marketing, sales, user interface, and application. It is a true virtual office assistant packed into a single bundle.

Make no mistake, however, ERP is enterprise software built for medium to large businesses. It doesn’t work on its own, but rather requires dedicated employees or even teams to set everything up, customize it, and run it. Small business ERP software does exist, but it is significantly more lightweight and can’t perform advanced tasks all that well.

Why integrate Magento and ERP?

As mentioned, the benefits of integrating your Magento eCommerce platform with an ERP system are huge. If this weren’t the case, there wouldn’t be a huge number of worldwide companies, big and small, doing it.

But, as a good businessperson, you should never blindly make decisions and adopt the flock mentality. You should thoroughly understand all the advantages and risks of the moves you make.

1. Cost reduction

Businesses are always looking to cut costs and maximize profits. Also, becoming stable and profitable is something that doesn’t just happen overnight. It takes years of careful resource allocation and cost reduction, in order to achieve long-term stability. So, how can Magento help here? In a nutshell – it allows you to keep better track of your business.

Essentially, the sales updates are automatically reflected throughout the ERP if you use Magento. In other words, when a customer places an order, updates are immediately applied to invoicing, accounting, shipping, and every other aspect of your ERP system.

This will allow you to keep perfect stock track, meaning that you won’t have to worry too much about redundancies. You’ll be able to keep everything that you need on hand, plus automatically order more when necessary. That way, you’ll cut the costs significantly.

2. More automation

The very essence of the world of internet is automation – not having to spend too much time on mindless processes that can be done by a program or a machine. Integrating Magento with your ERP will allow you to minimize the number of manual entries, such as orders and product, inventory, and shipping and customer data entries.

More automation means two things - a smaller risk of error and less time wasted on redundant tasks. Oh, and proceeding with Magento integration will significantly improve the communication with the sales teams, as well as overall back-office productivity.

3. Decreased risk of error

As mentioned, if you decide to integrate Magento into your ERP, you’ll be able to automate a huge number of redundant tasks. But what does Magento really do here? Well, it allows for a seamless integration of the payment, order, shipping, and customer details and information into the system.

Furthermore, you can upload all the inventory details straight from your ERP and directly onto your eCommerce portal with Magento. No more unnecessary human errors, no more tedious data re-entry.

4. Satisfied customers

Perhaps even most importantly, integrating Magento with your ERP will improve your clients’ overall shopping experience. Here’s a good example of what Magento can do for your customers.

Thanks to Magento, a customer can log in to a Magento shopping cart to place individual orders. They can pick which products they want to add to the cart, as well as filter the products by category. After doing this, Magento allows your customer to have the product or products shipped to the pre-set address. This may not sound like a lot, but the easier you make the ordering process, the better your chances at conversion are.

Not only is the general ordering process made easier here, but your customers will actually gain access to useful information, such as shipping details, order processing, delivery dates, text updates, etc. This is important because keeping a customer happy after the purchase is makes them more likely to come back.

5. ERP connectivity

The entire purpose of ERP software is integrating business processes and making your life easier. The list of processes you can integrate includes budgeting, finance, accounting, invoicing, payment management, workflow management, QC, supply chain management, inventory management, warehousing, and customer relationship management, among others.

Magento actually covers a good number of those, such as payment management, invoicing, customer relationship management, warehousing, inventory management, and many others. Magento and your ERP could be a perfect match.

How to integrate Magento and ERP?

In the following sections, let’s discuss how to incorporate Magento into your eCommerce business. The first step towards integrating Magento with your ERP is finding the perfect ERP for the job. Of course, if you already have a good ERP you can stick with it and there is no doubt that Magento will work fine with it. If you don’t have one, you should try to find the best fit.

1. Identifying what you want to integrate

The best way to go would be to start at the highest - and the vaguest - data flow design concept. You want data to be created and updated in one system and moved to another. For instance, you want your eCommerce store to be updated when a product attribute is changed in the ERP.

In essence, you’ll want to know what aspects of data you want integrated for ERP.

2. Triggering/Timing

Okay, so you’ve started establishing data workflows that will occur between Magento and your ERP. This isn’t enough. You’ll also need to figure out the timing, with regards to different processes being triggered.

For example, there is a maximum amount of time that is allowed to pass between accepting the payment and shipping the ordered items. In this case, Magento should capture and note the order and transaction only when your ERP system has confirmed a fulfilled order.

3. Updates

Your ERP system that processes the shipping details, setting up the tracking numbers for orders. It is essential that this information is updated in Magento as fast as possible, so that it can automatically make it available to your customers. There are two ways to go about it – you can set up ERP to automatically trigger updates in Magento or you can have Magento check for updates at set time intervals.

4. Middleware opportunities

One of the most challenging aspects of eCommerce is multichannel online retail. This brings problems, such as dealing with separate API connectors and abiding by many business rules that aren’t necessarily related to your ERP or Magento, to the table.

This is why you should consider researching and obtaining middleware solutions that can help streamline the workflow and make everything run smoother. With a good middleware system, you’ll also get more security which is always a nice perk.

5. Consider other opportunities

Picking a random ERP you haven’t explored or choosing to stay with a particular one out of habit is seldom a good idea. For things to work out well, you need to take your current business model into account and also think about the future and how your business will develop and grow.

Also, taking a leap of faith and switching to a new ERP system on an impulse is never a good idea. Such an important decision needs careful consideration and planning, both before and after the actual integration. Always keep in mind that Magento will work with any ERP out there. So, the real task here is to find the one that suits you and your business best.

The whys and hows

The reasons for integrating your ERP with Magento are fairly clear. Integration will grant you improved automation, cost and risk reduction, customer satisfaction, and many other benefits. However, integrating Magento into your ERP is a long and complicated process. Therefore, make sure that you’ve picked the right ERP before starting the integration process. Whether you decide to stick with your current ERP or switch to a better one, Magento will work wonders for your eCommerce business.

By interactivated • on May 12, 2019

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