Understanding Costs of Not Integrating

When selecting an ecommerce solution you will find both integrated and non-integrated software products available in the market. The initial investment of an integrated solution may appear higher and cause you to wonder just how much is the business process automation and integration with back office or ERP systems really worth? To assist with this analysis, think of the labor required for each step throughout the order cycle.

With a non-integrated solution, you will need to hire workers to enter orders that come in from your website into your accounting or ERP system. Any customer information that is captured will need to be re-entered as well. This duplicative data-entry is manual and prone to keying errors, which can result in additional cost that is not necessary, and could virtually be eliminated with an integrated, automated solution.

Once an order has been placed on your website and entered into your accounting system, a non-integrated solution will require you to hire workers to manually check inventory and see if the product is available in your warehouse. If an item is backordered, you will need to have workers manually contact the customer to inform them of the delayed shipping date, and hope this bad news does not upset the customer and cause them to cancel or delay their order.

If there is a change in a product’s price or you would like to run a promotion, you will need to have workers manually update items online in your web store as well as in your accounting database for each product or stock keeping unit (SKU). Again, these operations are duplicative, labor intensive and more prone to human-error when using a non-integrated ecommerce system, and the associated cost of each step slowly eats away at your margins. Now imagine these issues with thousands of products and / or customers. The diminishing effects on your ROI can be staggering.

After an order has been fulfilled and shipped to the customer, not having real-time automated tracking numbers and shipping notifications readily available through your web store will prohibit customers from self-managing their orders, and often result in increased call center demands for your non-integrated ecommerce business. This means you will need to hire workers to manually service customers and look up information that could be provided automatically with an integrated ecommerce solution. When you consider this in light of a successful web store, it’s clear this type of inefficient business process could weaken profits if not optimized correctly.

The issues discussed above become exponentially more treacherous the more products and customers you serve with your ecommerce storefront. Managing suppliers, large inventories of items in your warehouse and large numbers of customer records in your CRM is difficult, compared to small scale operations, and often prone to waste and error. Even more challenging is constantly keeping accurate, detailed information available for all product SKU’s and customers in your internal accounting database. Updates using non-integrated solutions will require you to hire workers to make duplicative changes to both your online web store and your ERP system each time something changes with a particular item. Over time, and with large inventories of items, this process becomes costly and further undermines profits. Contact us for a free copy of our latest white paper, Planning for Success: Nodus eStore Solution Stack, An Integrated Ecommerce Solution For Microsoft Dynamics GP.

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Posted on May 22, 2015, in Ecommerce and tagged , . Bookmark the permalink. Leave a comment.

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