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How to evaluate your options to choose the
right direction for your retail business.
SALESWARP WHITE PAPER SERIES | ERP FOR ECOMMERCE
TRADITIONAL ERP
ERP FOR ECOMMERCE?
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2. SALESWARP WHITE PAPER SERIES | ERP FOR ECOMMERCE
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TRADITIONAL ERP OR
ERP FOR ECOMMERCE?
The retail industry is quickly evolving. Customers have become the center of the retail
experience, with access to retailers from the Web, their phones, in-stores, by contacting
call centers and through any platform in between.
The omni channel retail environment is in turn demanding that merchants be more flexible
to suit the needs of shoppers. Retailers can no longer operate on a channel-by-channel
basis - they need to operate a dynamic empire that can serve customers regardless of
where they are and how they prefer to shop. Moreover, merchants need to carry out this
effort seamlessly and ensure the shopping experience is optimal across all channels.
The retail landscape has always been a competitive one, and this remains the case today.
In order to deliver a satisfactory shopping experience, merchants must leverage accurate
data to engage customers in meaningful ways. Having the right information empowers
merchants to react more efficiently and quickly across channels.
For many retailers, this calls for increased investments in eCommerce software and
solutions. The right technology will play a pivotal role in aiding merchants as they
develop the agility needed to keep up with the modern omni channel customer. To this
end, enterprise resource planning systems can be crucial in helping retailers store and
manage data across business functions.
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WHAT IS ERP?
In the context of the retail industry, ERP systems are software packages that integrate
data and related processes in a single space. They span a variety of business-specific
functions, everything from inventory to finance.
According to a study conducted by Emerald Insight, a successful ERP implementation
is tremendously beneficial and has several notable benefits. After integrating an ERP
system, businesses that responded to the study experienced procurement cost reduction,
financial cycle reductions, productivity improvements, personnel reduction and lower IT
costs.
Given the radical changes the retail industry has gone through over the past two decades,
particularly with the rise of mobile shopping, it only makes sense that merchants would
need to rely more heavily on technology. ERP
systems can be an effective means to tie all of
these functions across channels together and
get them working toward a single goal.
ERP systems can be an effective means
to tie all of these functions across channels
together and get them working toward a
single goal.
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THE PROBLEM WITH TRADITIONAL
ERP SYSTEMS
Retailers have particular needs that require their own industry-specific solutions. To take
that one step further, online merchants have different needs than traditional brick-and-
mortar retailers, and they too require niche-specific technology.
The problem, however, is that many traditional ERP systems aren’t designed with the
eCommerce industry in mind – meaning they lack eCommerce-specific features online
merchants need. Because eCommerce ERP is relatively niche, merchants don’t know what
to look for and often end up trying to attach best-of-breed systems to traditional ERP,
which can lead to costly and lengthy integrations, in addition to settling for less than
optimal functionality.
The systems that some merchants’ use can be up to two decades old and made for
a time when most telephones still had cords and the Internet was accessed by dial-up
modems. These legacy systems may not play well with the new systems that merchants
are leveraging for other functions. Trying to
make these old platforms work can be a
challenge - they often don’t scale well, require
a lot of maintenance, are limited in scope and
present a risk to the overall business.
Perhaps one of the biggest issues for a retailer
using a traditional ERP system is that it can’t be easily customized, or in some cases, not
customized at all. As ERP providers release new product updates and enhancements,
previously implemented customizations often will be wiped out when merchants upgrade,
and their IT teams will have to start customizing from scratch. Between all of these
downsides, ERP systems can end up costing retailers a lot of wasted resources, in terms
of development and integration time as well as financial funding.
Customization is just the tip of the iceberg. Many legacy systems are efficient when it
comes to managing inventory and supply schedules, but lack recent advancements,
including support for marketing and promotion functions, analytics and product
information in addition to multichannel management. This affects the agility and
nimbleness of retailers, which can set them back in a highly competitive market.
Many traditional ERP systems lack
eCommerce-specific features online
merchants need.
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Real-time data visibility is particularly important, especially considering the increasingly
global nature of eCommerce and the modern regulatory environment that governs the
retail sector. Increased regulatory scrutiny puts pressure on retailers to improve process
visibility, data accuracy and produce real-time reports. Legacy ERP systems, however,
may not offer that level of flexibility, DMS Retail
added – antiquated solutions may not be able
to produce the necessary information needed
by regulators in a timely and efficient manner.
Finally, because operating a traditional ERP
system can be such a complex challenge,
retailers may need to hire specific staff and
devote more resources to ERP operations. Integration can already be a big expense,
so having to devote personnel to maximize a traditional ERP system for eCommerce
functionality may create even more costs for merchants.
These are major obstacles that any business implementing a traditional, non-industry
specific ERP solution will have to address. Even established organizations with the
resources to deal with these challenges may still find a traditional ERP to be too much of
an expense, impeding their ability to deliver a quality shopping experience to customers.
Traditional ERP systems come with
rigid constraints that require custom
development and the aid of specialized
consultants.

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LEVERAGING AN
ERP FOR ECOMMERCE SYSTEM
Because of all the drawbacks of a traditional ERP, merchants may want to consider
utilizing an ERP system specifically designed for the needs of online merchants. These
platforms allow for better integration between consumer-facing online storefronts and
back-end inventory and accounting systems.
An effective ERP for eCommerce system also enables the merchant to better utilize
different options depending on the needs of the business. Retailers are no longer locked
into unwanted feature sets, but at the same
time they have the potential to utilize
multiple systems in complex ways.
ERP for eCommerce systems can assist with
achieving core retail functions, including
merchandise management, order management,
retail planning, inventory management and
supply chain execution more effectively than traditional ERPs. Merchants have specific
needs, so utilizing software specifically built to accomplish those goals can be a
significant boon.
Merchants looking to invest in an ERP for eCommerce solution should look for an offering
that is scalable, flexible, customizable and affordable, as well as one that will result in
reduced labor costs, time and resources. A solution with these characteristics will help
retailers avoid massive organizational changes and allow retailers to keep up with the
breakneck speed of the online retail industry. According to Lumenia Consulting, speed is a
“fundamental” characteristic for eCommerce ERP.
ERP for eCommerce platforms allow for
better integration between consumer-
facing online storefronts and back-end
inventory and accounting systems.
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Setup and maintenance should also be a high priority - although ERPs can provide retailers
with tremendous advantages, these benefits will be for naught if merchants have difficulty
with customization and implementation. As ERP Focus noted, Nike once invested $400
million into an ERP solution. However, integration struggles ended up costing the sports
apparel brand $100 million in lost sales. Merchants must look for an ERP for eCommerce
solution that can be integrated with their online sales channels and supply chains
seamlessly and one that can be maintained quickly and cost-effectively.
Finally, retailers should keep the operations of their eCommerce business in mind. An
ideal solution will have pre-built connectors to shopping carts and marketplaces, allowing
product, inventory, order and customer data
to be easily managed from one system and
synchronized in real-time across every online
store and sales channel.
Merchants looking to invest in an ERP
for eCommerce solution should look for
an offering that is scalable, flexible,
customizable and affordable.

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THINK OF THE CUSTOMER FIRST
Although many retailers consider their own needs as they integrate ERP solutions, it’s im-
portant to keep the needs of customers in mind as well. An effective ERP system can help
merchants improve the overall customer experience and enable them to capture more
shoppers and convert market opportunities.
A core advantage of leveraging ERP solutions
designed specifically for eCommerce is that
they streamline order history and tracking
functionality. For example, they can help
merchants track items purchased by shoppers
in the past and offer re-order templates, which
enables customers to quickly make repeat purchases. In the business world, it’s widely
known that it’s easier to serve loyal customers than it is to win over new ones, so this type
of functionality can go a long way in bolstering shopper loyalty and ensuring people can
quickly and seamlessly make repeat purchases.
Whereas a traditional ERP may often be built with the business side in mind, with most
functions and features built for the internal user, ERP systems for eCommerce often have
broader functionality, enabling merchants to create a better customer experience that
helps them stand out from the crowd. For consumer-facing retailers, this can be critical to
their success and should be a top consideration when deciding between a traditional ERP
or one catered to the needs of the retail and eCommerce sector.
Retailers need to operate a dynamic
empire that can serve customers
regardless of where they are and how
they prefer to shop.
>

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A LOOK AT ERP VENDORS
TRADITIONAL ERP
There are numerous ERP vendors that retailers can take advantage of to improve their
eCommerce operations. When it comes to the retail sector, it’s crucial that merchants
consider their needs and go with the vendor that offers the right solutions for the
challenges they face.
First, there are the traditional ERP vendors that provide merchants with proven, robust
solutions that are used by some of the most successful companies around the globe.
Traditional ERP vendors include:
> SAP Business One
> Oracle
> Microsoft Dynamics
> JD Edwards
> Sage
> Epicor
Although these traditional ERP vendors are used by some of the world’s most successful
businesses across a variety of industries, that doesn’t mean they are the perfect fit
for every organization. In fact, they may present significant drawbacks for retailers,
particularly as they try to tackle industry-specific challenges. As Manufacturing.net
noted, these ERP systems come with rigid constraints that require custom development
and the aid of specialized consultants.
>
It's an ongoing partnership between
retailers and vendors that is working to
align the ERP system with the merchants’
changing business needs and goals.

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OPEN SOURCE
Similar to the traditional ERP system, open source ERPs can span a variety of depart-
ments including purchasing, warehouses, accounting, manufacturing, human resources and
more, and scale with enterprise retailers. The real advantage to using an open source ERP
system is first, the ease in which it can be downloaded and utilized on most web browsers,
and second, the flexibility a user has to modify the freely available code base to meet
business needs.
Several open source ERP systems can be downloaded online and are offered free of
charge. Users can try the system out for free to see if it meets their needs without any
risk of upfront licensing fees for software that may not work for their businesses. Others
may charge a monthly subscription fee that
includes support and upgrades.
However, even though most of these solutions
are customizable and easily accessible from
any Web browser, retailers will need to rely on
technical professionals or on an open source
community for most support, upgrades and customizations.
Some vendors that offer these solutions include:
> OpenERP
> WebERP
> ERP Next
An ideal ERP solution will have
pre-built connectors to shopping
carts and marketplaces.

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ERP SYSTEMS FOR ECOMMERCE
Because of these disadvantages, merchants may want to consider leveraging an ERP
made specifically for eCommerce retailers. Some vendors that offer these solutions
include:
> RetailOps
> Netsuite
> SalesWarp
Regardless of whether retailers opt for a
traditional ERP, an open source ERP or one
designed specifically for eCommerce, vendor
selection is always important. Investing in an
ERP system often isn’t a one-time deal where
merchants purchase the system, implement it
and let it run. It’s an ongoing partnership between retailers and vendors that is working to
align the ERP system with the merchants’ changing business needs and goals. Whichever
type of ERP is required, retailers need to choose a vendor that grants them a platform
for growth and the flexibility to evolve with the changing retail landscape. The flexibility
and rigor granted by an ERP system specifically designed for online merchants can be a
key weapon in the arsenal of online retailers as they move forward.
A core advantage of leveraging ERP
solutions designed specifically for
eCommerce is that they streamline
order history and tracking functionality.

12. To learn more on how SalesWarp can help your
retail organization, visit SALESWARP.com.
ABOUT SALESWARP
SalesWarp provides an end-to-end omni channel software solution that consolidates and manages all product,
order, inventory and customer data across multiple sales channels and fulfillment locations. With powerful,
cross-channel integration and advanced automation, you can streamline your retail operations, gain real-time
data visibility across your organization, and deliver a seamless omni channel experience from one unified
system. For more information, visit SALESWARP.com.