Integrating your ecommerce with ERP part 2 - Integration methods
When integrating an ecommerce solution with an ERP system, there are different levels of functionality and different levels of complexity. A high-level distinction between different methods could be defined as “Batch”, ”Live” and “Hybrid”.
Many companies can gain operational efficiency with batch integration. They periodically upload product and customer information from the ERP system to the ecommerce and download the orders into the ERP. Batch integration ensure re-use of master data already entered and it ensure that you have the products created correctly in ERP system before you start selling it online.
Batch integration is the simplest and least complex integration.
Simple ROI calculation where average costs for handling product changes, orders and customer queries are multiplied with the daily number of occurrences, and an estimated efficiency improvement in per cent
Live integration is when the ecommerce connects real time into the ERP system when the visitor is on your website. This could be for customer specific prices, discount calculation, credit max check, real-time stock level etc.
Live integration requires a fast connection from the ERP system to the ecommerce system since the visitor on the website will be “waiting” for every request. With the development in internet technologies and bandwidth this is possible in most areas – alternatively the online platform and the ERP system should be placed on the same network (close to each other).
Live Integration is more complex than Batch and will typically have higher cost associated with the implementation. Solutions with Live integration will normally also include some Batch integration.
Not only is bandwidth is a potential bottleneck. A high number of visitors will generate many requests to the ERP system and some larger installations decide to implement business logic in the ecommerce to limit the load on the ERP system. This could be a solution where product data and customer price data is loaded from the ERP to the ecommerce solution every night. Customer prices are then calculated in the ecommerce when prices are displayed to the visitor and any discount is calculated in the ERP when the visitor confirms the order. This becomes a hybrid solution with batch load of products, customer price calculation in the ecommerce, and discount calculation from the ERP. This setup provides a fast and consistent customer experience and it does not query the ERP system every time a user display a product. However it does require the replication of data/logic to the ecommerce solution for calculating the customer specific prices.
The Hybrid solution will have both the cost of doing Batch and Live, but also the cost of re-creating the application logic on the ecommerce solution.
Data integration or Business Logic integration
ERP systems and ecommerce solutions both store data and have an application component where the specific business logic is implemented. Integration can be done both at the data level and at the business logic level.
Integration at the database layer is either directly with the databases or via exchange of files. If it’s simple data in simple relationships, this is the preferred way. But you lack the business logic, which often is needed to get value out of data and to ensure data consistency.
Business Logic Integration
Integration at the business logic layer is often more complex and needs to be done via a given system’s defined interface (API). For example “creating a new product” includes many tasks like ensuring a unique product ID, ensure correct unit of measurement, price, inventory information etc. It’s often done within the business logic to ensure data consistency for all products.
Therefore integration at the business logic layer is preferred in more complex scenarios. Especially when there is an existing brick and mortar business, that already creates many of the data and already has much of the business logic implemented in the ERP system.
Ecommerce in your ERP system
An alternative to integrating an ERP system and ecommerce system is a solution where the ecommerce is built on top of the ERP system. This eliminates the need for integration, but has not proven to be a practical solution in real life since the two systems serve different purposes and are built for different processing, are quite complex on their own and use different technology.
Beware of limitations
There are some ERP vendors that have added ecommerce functionality to their feature list and some third party ISV’s that have built add-on modules. However it is often limited in ecommerce capabilities because it is built on the ERP system and lacks the ability to customize the front-end interface to increase the user experience, which becomes increasingly important.
Finally the ERP-based ecommerce solutions do not include the rest of the online tools like Content Management System, Email Marketing and Online Marketing Optimization.