Enterprise Resource Planning

The Pros And Cons Of Enterprise Resource Planning (ERP) In eCommerce

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Nowadays, modern merchants can deliver a swift eCommerce journey to their customers and improve their whole business administration.

The eCommerce industry has recently changed. If you want to be competitive, you need software that can automate and streamline your business management. Enterprise Resource Planning (ERP) is one of the best applications for this.

How Does ERP Work?

ERP software is a technology that centralizes data, automates repetitive tasks, and streamlines work processes. This integrates all aspects and procedures of a business into one system.  ERP software may integrate many back-office operations such as HR functions, warehouse management, IT services, and inventory software. When ERP and eCommerce operate together, you have a single data hub that removes silos.

Pros Of ERP

Investing in an ERP system would have significant advantages for a growing eCommerce business. Because operations usually have a quick turnaround time and in large volumes, a tailored system such as the sage 100 erp that has key automation features and financial data integration can be hugely beneficial. 

The following are some benefits eCommerce organizations can enjoy should they consider integrating their online platform with an ERP system.

Improved Analytics

In terms of analytics, the benefits are pretty straightforward. Utilizing a single database can improve reporting and analytics. The ERP software records all input data, aggregates all the information, and comes up with solid and integrated reports. Thus, using an ERP saves time and money.

Additionally, ERP systems usually come with a dashboard. Managers can simply log in and access all the files and business information they need. With a single click, they can see revenue and expenditure data. Seamless access to pertinent information will help managers make better choices.

Inventory Streamlining

Inventory is a vital part of every business, especially eCommerce businesses. With ERP integration for eCommerce, firms can better organize and manage inventory by keeping track of product prices and availability. Orders are also fulfilled promptly with ERP software, preventing order accumulation.

Moreover, eCommerce ERP integration offers real-time product management loop synchronization from the primary warehouse to the distribution hub to the endpoint of sale. Stock inventories can thus be optimized across an enterprise supply chain. This keeps downstream cost accounting limits in place while enhancing return on investment (ROI).

Data Security

Due to technical challenges, an online store may need to employ an internal backup. When data is fragmented, it’s hard to tell which backup version has the data you need. This can be solved by storing all information in the ERP system.

In addition, ERP systems allow for customization of user rights, ensuring that business information is safe from unauthorized users and away from leaks and security breaches.

Improved Customer Service

Today’s tech-savvy buyers demand conveniences like complete account business transactions, prior invoices, product research, warranty, use, and ratings. Customers love eCommerce ERP integration for these reasons:

1. With back-office software integration, customers can access precise inventory figures in real time. Customers can be notified when their orders ship and track their shipments online.

2. Buyers can choose shipping options depending on cost, delivery speed, and other factors. Buyers can choose alternative shipping options for different areas, and integration automates the process of shipping to many addresses. However, note that this does not apply to all ERP systems.

3. Customers prefer automatic services like tax computations, onsite currency conversions, and personalized catalogs based on their ordering habits.

4. Instead of contacting customer care, customers can instantly acquire valid pricing quotations from sales employees while ordering. When back-office software is fully linked, customers that qualify for lower pricing tiers will know the right prices. The technology can also give additional modes of payments to speed up invoices.

5. Allowing clients to place orders online 24/7 keeps you competitive in a market where customers can easily find alternatives. So, whether you offer B2B or B2C, your shoppers can find the products they want when they need them.

Reduced Operational Costs

Ultimately, the integration of ERP and eCommerce will help save on operational costs. With automation, tasks are done quickly with fewer people involved, minimizing labor expenditures. Moreover, business changes can be implemented fast due to process standardization, minimizing lead times, and increasing efficiency.

Cons of ERP

While ERP integration has many benefits, it also has drawbacks. Cons when installing ERP in e-commerce business include:

High Costs

The cost is, of course, a deterrent to utilizing ERP. ERP programs are expensive on their own, let alone maintenance and hardware requirements. Subscription-based ERP creates an ongoing operational cost. However, as business operations improve, organizations report considerable ROI in six months to two years. Moreover, there are ERP software providers who offer flexible payment solutions depending on company requirements.

Benefits Are Not Readily Visible

Implementing an ERP system takes time and money. The trick is to be patient and set realistic goals. After all, the benefits usually only show over time.

It’s Complex

ERP software has many features, making it difficult to use. Companies often get caught up in the possibilities of an ERP technology but fail to plan for its implementation. Some businesses may see a low return on investment. This is especially true if your workforce finds the software too hard to use.

To avoid becoming a victim of ERP software complexity, invest in role-based user training. Since they are the end-users, they can also provide inputs for system improvement, ensuring that stumbling blocks are reduced before the system is fully implemented.

In addition, avoid solutions with more features than you require. Stick to the basics first, then add other features once needed. Doing so can also reduce unnecessary expenses.

Data Migration May Take Time

While ERP easily integrates with other business solutions, cloud data migration is always required. This can take a while. If not done correctly, it may cause delays in your ERP implementation. 

Moreover, without data cleaning, reports generated from the system may not serve their purpose. Thus, it is recommended that a team oversee the data migration to ensure that any information in the system is consistent, correct, and usable.


Modern ERP solutions can significantly help your eCommerce business. Choosing the appropriate solution may boost productivity, improve customer service experience, and position your business for growth and expansion. That will surely have a positive effect on your net income.

However, while the benefits of ERP installation are apparent, it never hurts to be aware of the risks. This way, you can come up with alternative solutions and better prepare your operations in the process of transition.

Also read: Enterprise Business Solutions: The Most Profitable Area to Alleviate the Business Growth



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