Magento is the foundation of your eCommerce business. Magento provides the storefront for your customers to find and shop your products. On the backend, you manage your items, orders, and inventory within the platform.
As your business grows though, managing all your order processes become too cumbersome to do within the platform itself. You need a robust backend system, like an ERP. Quickly, you learn that Magento is primarily an eCommerce shopping cart, after all.
This post will walk you through how to choose the best Magento-ERP solution for your business. What do you look for in an ERP? How to choose the best integration between Magento and an ERP? We’ve got the answers for you!
Top Signs That Your Business Needs an ERP System
As your sales grow, so does the amount of legwork you need to do to manage your orders. When not properly managed, your customer experience can falter. Customer satisfaction consequently suffers.
If you’re having trouble keeping up with your order volume, it may be time for you to consider using an Enterprise Resource Planning (ERP) system. Here’s some top signs that could be telling you that you need an ERP:
- You’re having trouble keeping up with order volume. Orders are getting delayed or handled incorrectly.
- You have no idea what your inventory counts are. This can lead to overselling on your site.
- It’s taking longer and longer for you reconcile financials at the end of the month.
- You can’t forecast sales easily and accurately.
- Customer satisfaction is slipping because of erroneous order processing.
If these problems resonate with you, your business is probably ready for an ERP system.
An ERP provides a single database for all your business data such as sales, orders, inventory, and customer. With real-time data, you’ll have easy access to the information you need, such as inventory counts and accurate sales reports.
An ERP allows you to work more efficiently, so you can focus on customer experience, and ultimately satisfaction.
How to Pick an ERP System
Deciding that you need an ERP is the easy part of the decision. The hard part is actually picking the best ERP system for your business. There’s no one right ERP system for all Magento users.
There are numerous ERP systems available to Magento sellers. You can go as big as SAP or Oracle. Or, go cloud-based with NetSuite. Consider the slew of systems made available by Microsoft such as GP, SL, NAV, and AX. Then,can’t forget about options such as Sage, Infor, and IBM.
Every system is different. So, picking the best ERP will depend on your unique business needs and what features you need.
Consider these factors when picking an ERP system:
- Expected order volume. What type of resources do you need to accommodate?
- Complexity of order fulfillment. Do you use multiple drop shippers or suppliers? How do these workflows need to be handled in an ERP system?
- Biggest need for an ERP. Is it for order fulfillment, shipping, inventory management, or sales reporting?
- Channel expansion. Are you just a Magento seller, or do you also sell on marketplaces, brick and mortar locations, or do your own manufacturing?
- Size of company. Are you an SMB or an Enterprise?
- Magento Integration. How will your ERP integrate with your Magento webstore?
These are questions you’ll have to ask yourself. Let them guide you as you evaluate ERP systems.
Magento-ERP Integration Solutions
When looking at an ERP system, one of you main concerns should be if it integrates with Magento. While you might not need to integrate right away, you will want to if your business grows.
Forgoing integration means you’ll be stuck with many manual processes to move data back and forth between Magento and your ERP. You’ll have to stuff orders, inventory counts, item, and customer data from Magento into your ERP, or vice-versa.
Manually doing these processes take a lot of time, and people. You won’t be efficient. You’re process will be prone to human error. A missed-typed shipping address leads to your products not getting delivered. These are very real consequences to an eCommerce seller.
Integrating Magento with your ERP eliminates the needs to do these types of processes by hand. You can instead automate the exchange, or sync of data between Mangeto and your ERP. It saves you time and resources, while making your business more efficient.
When researching ERPs, keep in mind how the ERP will integrate Magento.
Integration will most likely be point-to-point, custom built, or by a multichannel integration platform. Here’s the pros and cons of each of those integration types:
Some vendors (like some of those found in the Magento Extension Marketplace) offer point-to-point connector solutions. For this type of solution, Magento and your ERP are “pointed” at each other to synchronize data; there’s no operational platform in the middle of them. Companies have to choose which system to manage their data in.
These type of solutions are affordable (like $100 or so month), which can be great for smaller retailers. For growing retailers, however, you’ll run into some problems.
A point-to-point integration doesn’t allow for as much flexibility as you add sales channels. You’ll have to re-configure your integration every time you add a new channel. It’s messy and you’ll end up spending even more resources.
Custom Magento-ERP Integration
You can also build your own custom integration between Magento and your ERP. A custom integration would work using both applications’ programming interfaces (APIs) to synchronize data such as items, orders, inventory, customer, and shipping information.
Custom integrations are complex and expensive. That’s why there are companies that actually offer these services as their primary business offering.
This approach is best for organizations who have the right resources and specific requirements to justify it. Most likely though, that’s not your business. Another approach is probably easier and more cost-effective for you.
Multichannel Integration Platform
As mentioned above, there are companies that offer a multichannel integration platform specifically designed to integrate systems such as Magento and ERP systems, like NetSuite. This type of technology sits as an operational hub between your ERP and Magento. The five types of data (item, inventory, order, customer, and shipping) are automatically synchronized between your two systems.
Ideally, the platform uses pre-built connectors for Magento and your ERP. This makes integration and configuration easy and flexible. (This is what nChannel does and is why we know a thing or two about it.)
This approach is pricer than a one-off point-to-point solution (a couple hundred bucks a month and set-up fee), but is more affordable than a custom integration. This is usually a good fit for an SMB or Enterprise seller.
This solution scales with your business, making it easier to add and remove other sales channels as you need. They also offer more robust capabilities like order workflow management and product information management.
What integration solution is best for you depends on your unique business needs. Nonetheless, how Magento will integrate with your ERP is crucial when choosing an ERP system for your business.
What to Do Next
Deciding to use and choosing an ERP is a big step for your business. It takes time, resources, and thoughtfulness to choose the right one. You’ll want to consider all these factors, especially integration soltuions, to decide which ERP is best to use with your Magento business.
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