Enterprise resource planning software is an integrated business suite that helps manage multiple business applications and operations from a single platform. This type of software shares similar data models and covers the end-to-end processes.

Ecommerce platforms can consolidate visibility for HR, finance, distribution, manufacturing orders, customer service and supply chain processes into one robust business suite with ERP. Smaller ecommerce platforms can also implement ERP, as new cloud-based hybrid structures are now available to any-sized business in a given marketplace. Small businesses can automate many back office functions as they pertain to technology, services and other areas of operations.

What types of ERP systems are there?

Depending on the size of your ecommerce platform, the size and structure of an ERP systems will vary. Since the online retail industry is a digitally driven nowadays, ERP systems can monitor, manage and increase visibility with regard to critical components of a business's foundation. Your ERP software need to be integrated with other aspects of operations, though, otherwise it won't be effective.

There are two types of ERP modules:

  • On premise: An on-premise ERP system is a series of servers at the actual location of a given business. Some companies prefer to have the infrastructure on site so they can fix any issues on their own accord. Also, some businesses don't like letting go of company information in fear of cloud security strength.
  • Cloud-based: ERP as a service, or in the cloud, is when a company stores all of its integrated data in a massive sever hosted by a third-party vendor. These services charge an upfront fee, but there's no maintenance and upgrade costs to the partnering company. Cloud-based options offer a more flexible solution and create an agile workspace for businesses that use cloud ERP.

How does it relate to ecommerce?

Since ERP is housed under one roof and integrated with other operational programs, ecommerce platforms can access information faster and easier. Businesses can then process better analytics and reporting - both of which help identify customer trends and where companies need to dedicate more attention. For example, ERP, if integrated with financial records, can help distinguish who is buying what, and when. Furthermore, it also may shed light onto low customer retention rates if integrated with customer relationship management software.

ERP relates to ecommerce in a number of other ways besides analytics and reporting. Online retail is a multistep operation, and ecommerce platforms of any size can track order fulfillment, shipping and manufacturer inventory through robust ERP software too. In essence, ERP is a platform that houses all important information in a single, user-friendly location. Businesses invest in ERP to increase internal visibility, improve customer relations and grow the company. ERP relates to ecommerce platforms in that it can integrate with your existing structure and shed further insight into all business operations.

Do small businesses use ERP?

Traditional ERP software was designed to meet the needs of larger manufacturers. However, thanks in part to the rapid growth of cloud-based software, smaller organizations can now scale ERP to their operation, all while reaping the benefits that these systems offer, including improved oversight visibility.

From an ecommerce perspective, ERP can help improve the same elements of an operation, especially in the cloud. Small businesses can integrate with their manufacturer's ERP systems and better monitor workflow and communicate with their manufacturing partners in the supply chain. Back-end logistics in an ecommerce operation is a complex system, but ERP technology can dramatically improve workflow and business agility for manufacturers and ecommerce websites alike.


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