How To Integrate eCommerce and ERP System Cost-effectively?
Estimated reading time: 11 minutes
Table of Contents
- What is ERP?
- Why Integrate eCommerce and ERP System?
- How your ERP is deployed
- Which eCommerce Platform To Use
- How To Integrate eCommerce and ERP System Cost-effectively
- Case Study – Inventory System
- Conclusion – Integrate eCommerce and ERP
- Further Reading
How can a small business integrate eCommerce and ERP system in a cost-effective way?
According to Statista, retail e-commerce sales worldwide amounted to US$ 3.53 trillion in 2019 and are projected to hit US$ 6.54 trillion in 2023. Online shopping is one of the most popular online activities worldwide.
What is ERP?
According to Wikipedia, enterprise resource planning (ERP) is the integrated management of main business processes.
ERP is business management software that an organization can use to collect, store, manage, and interpret data from many business resources like cash, raw materials, production capacity and the status of business commitments: orders, purchase orders, and payroll.
Why Integrate eCommerce and ERP System?
Before we crack into how to integrate your eCommerce website with your ERP system, let’s talk about why. Here are some compelling reasons.
First, it automates the business processes to make administrative savings.
Secondly, it avoids manual data entry mistakes and duplicates like information on products, orders, shipments, prices, and, inventory.
Thirdly, it ensures real-time, centralized data to reduce delays, paperwork, manpower, and trigger ordering alerts.
Fourthly, it improves inventory management with real-time updates and tracking.
Finally, it gives you total control over the online sales channel with better customer experience and customer loyalty. This includes real-time updates on inventory, prices, etc.
How your ERP is deployed
First of all, when considering an ERP system, one of the most important factors is to select an on-premise or SaaS ERP.
According to Wikipedia, software as a service (SaaS) is a software licensing and delivery model in which software is licensed on a subscription basis and is centrally hosted. According to a Gartner estimate, SaaS sales in 2018 were expected to grow 23% to $72 billion.
On-premise means the ERP system is installed locally on your own server and managed by you. It offers a high level of customization and data control, but are more expensive upfront and after-sales support, and many don’t support mobile. Therefore, it is meant for larger businesses.
On the contrary, SaaS means the ERP system and your data are managed by the ERP vendor and is accessed using a web browser. It is meant for small businesses with lower upfront and support costs though they come with limited customization.
Which eCommerce Platform To Use
Then, you need to determine which eCommerce platform you will be using.
WooCommerce is the world’s leading eCommerce platform for online stores. According to Datanyze (the world’s leader in technographics), WooCommerce is used by more than 28% of all the eCommerce websites.
Most importantly, WooCommerce is built on WordPress, the world’s leading online content management system that powers over 35% of the websites around the world. WooCommerce is simply the best of the best as far as an eCommerce platform.
Besides, regularly audited by Sucuri, an industry leader in security, WooCommerce online stores are in good hands.
Here are the features of a WooCommerce online store.
How To Integrate eCommerce and ERP System Cost-effectively
Finally, you need to find out how you can integrate eCommerce with ERP.
ERP systems require EDI, APIs or webhooks to synchronize with other systems e.g. an eCommerce platform. EDI is a traditional approach and usually used by on-premises ERP systems. APIs and webhooks are modern and used by SaaS systems.
The best way to integrate for an ERP integration to work is through APIs or webhooks because it saves a lot of time and money during integration, make it fast and easy to use for the team. Besides, it works with real-time updates and you can add unlimited synchronizations.
Therefore, customizing on-premise ERP systems usually costs more money. Conversely, when it comes to a SaaS ERP system, it is the system integrator’s job to do the customization like integration of your online store with the ERP system. Since they can sell the integration packages to multiple customers, the integration cost is rather low compared to integration with an on-premise ERP system.
For this reason, if you want to integrate eCommerce and ERP, the most cost-effective way is to deploy a SaaS ERP system with an eCommerce platform that uses APIs or webhooks.
WooCommerce uses webhooks to talk to other systems e.g. a SaaS ERP system. Webhooks can trigger events each time you add, edit or delete orders, products, coupons or customers. Besides, it’s possible to use webhooks with WooCommerce actions, e.g., Create a webhook to be used every time a product is added to the shopping cart. Webhooks make it easier for third-party apps to integrate with WooCommerce.
Odoo, based in Belgium with 850+ employees, is a suite of open source business software applications like CRM, eCommerce, accounting, inventory, point of sale, project management, etc. It is being used by over 4.5 million users including the World Wide Fund For Nature (WWF), Toyota, Cox Communication, Hyundai, and Danone.
With the use of WooCommerce webhooks, you can integrate and manage your WooCommerce online store in Odoo. These include importing orders and customer data, updating inventory, updating order status, and importing and exporting product details. Besides, you can automate functions like order imports, order status updates and stock updates. Below are some highlights.
Connect Multiple Stores
Integrate multiple WooCommerce stores with a single Odoo database.
Import Customer Data
Import customer details from WooCommerce to Odoo.
Manage Orders
Import orders from WooCommerce to Odoo & Update order status from Odoo to WooCommerce.
Synchronize Products
Import and Export Products & Product Details between Odoo and WooCommerce.
Manage Stock Levels
Synchronize product stock levels between Odoo and WooCommerce in a bi-directional way.
Set Automatic Jobs
Avoid manual operations by automating various daily operations between Odoo & WooCommerce.
Case Study – Inventory System
Using Odoo’s Inventory module, you can maximize your warehouse efficiency and manage your inventory with a warehouse management software application. This improves performance and process time.
Here are the features of the Inventory module.
Clean and fast
Double Entry Inventory
The unique Odoo double entry inventory management allows full traceability from the supplier to the customer. Nothing is lost, everything is moved.
Mobile
Scan products in your warehouse using the barcode scanner. Control your dashboards and track orders wherever you are.
Corrected posted transactions
You are now able to update any transaction (picking, manufacturing order) after being posted through the new lock/unlock button.
Modern User Interface
A fast user interface designed for modern inventory management. Get more work done with less effort with or without barcode scanners.
Flexible
Easily manage a single inventory or a complex multi-warehouses environment by activating features on demand.
Basic Operations
Delivery Orders
Pack orders and deliver with or without barcode scanners. Odoo prepares delivery orders for you based on availabilities.
Inventory Adjustments
Do an inventory for a zone, a specific product, a lot or a pallet/box; Odoo prepares cycle counts for you.
Multiple Locations
Use hierarchical locations to structure your warehouse: zones, rows, shelves, etc.
Manufacturing, Repairs
Use extra apps to manage manufacturing orders, repairs orders, etc.
Receipts
Control incoming products and compare to what was ordered from the supplier.
Packing
Pack products in just a click and assign barcodes to packs for an easy tracking of the orders.
Scrap Products
Scrap products in just a few clicks and get clear reports on scrap: their costs, reasons and volumes.
Stock Transfers
Use the simple transfer interface to move products from one location to another.
Advanced Routing
Drop-shipping
Deliver to customers straight from your supplier based on products, orders or customers.
Cross-Docking
Unload incoming material and directly transfer to outbound gates with little to no storage in between.
Put away & Removal strategies
Define your own storage and removal strategies; fifo, nearest available zone, lifo, etc.
Pick – Pack – Ship
Design your own order process flow. Deliver to customers in one step (delivery order) or several steps: picking, packing, shipping.
Push & Pull Routes
Design your own product routes to automate transfer orders between warehouses or locations.
Multi-Warehouses
Manage all your warehouses with the same system and define replenishment rules between warehouses.
Productivity
Barcode Scanners
Nice unified interface. Use barcode scanners for every inventory operation: inventories, incoming shipments, packing orders, etc. Scan the goods and confirm the reception or sending of those only through the scanner (no keyboard needed). Support EAN13, EAN14.
Customer Portal
Your customer can track their order status into the customer portal: orders, invoices, delivery order status, etc.
Custom Alerts
Define alerts on products or suppliers that should appear for a salesperson when they make quotations.
Smart Scheduler
Odoo’s scheduler will trigger all operations automatically for you based on product availabilities and forecasts of orders.
Powerful search
Search documents to process easily. Just scan a barcode or filter based on any criteria: customer, product, etc.
Replenishments
Minimum Stock
Have proposition of purchase orders (or request for quotations) created by Odoo based on your future stock forecast.
Request for Quotations
Want to negotiate a price with suppliers every time you buy a specific product? Odoo can trigger request for quotations automatically based on future needs.
Make-to-Order
Purchase raw materials or manufacture products to order. Define your own routes specific to warehouses, products, orders, etc.
Traceability
Activity Log
Have the history of all operations attached to every document (picking, delivery order, quality control) for full traceability.
Serial Numbers Tracking
Tracks manufacturer lots with barcode or serial numbers. Define and choose which transactions require tracking (delivery orders, receptions, internal moves, etc.)
Perpetual Valuation
Get your inventory valuation posted in real time in your accounting software for an accurate balance sheet in real time.
Products
Product Types
Odoo supports several product types that have different behaviour: physical products, consumables, services, digital products.
Custom fields
Add as many custom fields as you want on products to handle your business needs.
Expiration Dates
Track expiration dates on products.
Multiple unit of measures
Odoo supports multiple unit of measures and converts automatically for you: buy per tons and sell in kg.
Multiple barcodes
Create custom barcodes with specific codes to implement desired behaviors, such as a specific promotion.
Inventory Valuation
Costing Methods
Odoo WMS supports FIFO, Average Cost (AVCO) and Standard Price for product costing methods.
Landed Costs
Reincorporate landed costs into your product cost to get an accurate valuation of your inventory.
Valuation Methods
Use continental or Anglo-Saxon accounting (to record cost of goods sold)
Perpetual Inventory Valuation
Set up perpetual (real time, automated) or periodic inventory valuation mode by product.
Reporting
Dashboard
Use predefined dashboards or build your own with the advanced reporting engine. Share filters with the team.
Inventory Forecast
Get forecasts of product availabilities based on confirmed sales orders, purchase orders or manufacturing orders as well as internal moves.
Integrations
Accounting
Have all your inventory operations impact your accounting in real time or periodically.
Purchases
Automate proposition of purchase orders and control products coming from your suppliers in just a few clicks.
Quality
Define quality control points and trigger quality alerts easily.
Sales
Automatically schedule all your inventory operations based on sales orders.
Shipping Connectors
It supports UPS, USPS, Fedex, bPost, DHL and EasyPost. EasyPost integrates with tons of other carriers. Get an instant quote on your packs. Generate the sending labels from the shipper. Order automatically from the right shipment company. Track and trace your packages.
Powerful API
Make Odoo WMS do pretty much anything with the API: integrate with 3PL, integrate hardware (scales, scanners, RFID), etc.
Conclusion – Integrate eCommerce and ERP
In summary, for those looking to integrate eCommerce and ERP, the most cost-effective and effortless way is to use a SaaS ERP system like Odoo that can be integrated with an eCommerce platform like WooCommerce using webhooks.
