If you, as a merchant, have multiple Shopify stores under your name, then not getting lost in the chaos is even trickier. This is where ecommerce brands but not only use an ERP system to turn chaos into order and ensure everyone is on the same page.
However, picking a Shopify ERP integration platform and adding it to the store isn’t as simple as it might seem – there are plenty of things you need to research first and a couple of challenges to face. In this guide, we’ll help you with all that – we’ll show you the basics of Shopify ERP integrations, the benefits of having one in the shop, and how to ensure that it fits like a glove with Shopify.
What is an ERP?
ERP, or enterprise resource planning, is software that businesses use to manage their day-to-day business activities such as accounting, internal communication, project management, compliance, and supply chain operations. ERP suites also typically include performance management software, which is used to plan, budget, predict, and report on an organization’s financial results.
Data collected by G2 shows that 53% of businesses believe implementing an enterprise resource planning tool is a priority – for example, to help them automate processes that take far too much time to be done manually.
The system’s main job is to collect data across departments such as supply chain, sales, human resources, manufacturing, accounting and store it in a single database that is available to all employees. But the ERP system also has many automation tools that can handle most of the mundane tasks for the team and streamline business processes inside the company.
You can think of it as the glue that binds together the different systems and departments inside a large organization and allows employees to communicate and share information more easily with the rest of the company.
What is ERP Integration?
In essence, ERP integration is a method to connect and synchronize the enterprise resource planning software with other applications and data sources you use in the company, creating one single database with all the data. That way, the integrated platform can give you a unified view of data from different systems and departments in real-time, as well as allow you to update the data in all systems at once.
Plus, having one integrated system rather than multiple ones for each department can make a lot of things easier for your team and give them a significant boost in productivity but not only. When the whole data is in one place, then not only does everyone has access to the same information, but they also can share it much easier with others, visibly improving the communication and collaboration between different teams.
What are the types of ERP integrations?
While an enterprise resource planning app is supposed to make your and your team’s job easier, finding the right ERP solution and adding it into the Shopify store isn’t exactly straightforward.
First of all, you have hundreds of available ERP systems to choose from, with varying capabilities and features. Some are dedicated to ecommerce businesses and are supporting the leading ecommerce platforms. Others can help you handle customer data – those are called CRM or customer relationship management. And another type can improve business predictions via Business Intelligence or automate some HR tasks. There are also a couple of general ERP solution apps that can be customized to any industry.
To pick the right system, you should spend some time pinpointing the main expectations and goals for the system and think about whether there are any industry-specific features the app should have. If you compare all the options carefully and discuss them with your team, then the risks that the Shopify ERP integration might fail can be significantly lowered.
But besides choosing the most suitable ecommerce platform for the Shopify store, you will also need to plan what method of integrating Shopify with the ERP you will use.
- Custom integrations: Custom ERP integration is a bespoke app made by development teams for a specific company. If you need the chosen enterprise resource planning to connect to some tools and apps your business uses, but that aren’t available as native integrations, asking for a custom one is usually the best idea.
- Native integrations: Those are out-of-the-box integrations that allow you to link specific applications to an ERP straight away. While it’s typically the easiest and fastest way to connect the business tools to it, the list of natively supported apps is usually pretty limited.
- Third-party built integrator apps: Those are special integrator apps made by other companies through which you can link your apps to an ERP system. They are typically either built for a specific platform or various systems.
- Cloud Integration solution (iPaaS) is a cloud-based solution where users can connect various apps using a cloud service without installing the iPaaS service itself.
Selecting a solution and method should depend on the main goals for your brand and which ERP integration way would be most effective for you. Native ERP integration is typically the easiest one to add, but they have limitations in what applications can be added to it.
Third-party integrator apps or iPaaS integration solutions can also make connecting the entire tech stack smoother, though you need to be sure that the apps and platforms are secure enough for you to enter sensitive data there.
Meanwhile, a custom ERP integration built for your specific business will take time, but if you need to add particular apps to the ERP for which there’s no other connection option, then working with a development company on a custom app is the best option.
Shopify ERP integration benefits
While, as you can see, the integration can get a bit tricky, and it will take time and effort to make everything run smoothly, you should see the positive changes in no time.
First, integrating enterprise resource planning with the ecommerce store will be incredibly helpful if you have several Shopify stores to manage or are thinking about moving to multi-channel sales. Before, businesses were using only one or two sales channels (for example, only a retail store), so handling the business data only with the help of spreadsheets wasn’t usually much of a problem.
When you are selling through retail stores, social media, online marketplaces, and the Shopify store, then things can quickly get hectic – especially looking at just how much data to process you get every day. And your Shopify users only get more demanding each day. An ERP system can aid you massively here by taking most of the heavy loading onto itself.
For example, you wouldn’t need to spend as much time keeping the database (or several databases) in order. The app can automatically track, add, update, process the incoming data, and also share it between all other connected applications.
But you can also use it for:
- Managing the price lists between multiple stores and channels
- Improving data accuracy and speed as there’s a much lower risk of an error like with manual adding data
- Enhancing customer experience in the store (for example, by automatically notifying customers when their payment is accepted and the order is packed up and ready to be shipped)
- Use the inventory management and forecasting feature to predict what supplies you should order.
- Automating some tasks, such as tracking and updating the inventory levels, financial tracking, generating monthly reports, or sending notifications to your customers
- Find out precisely in what production stage your manufacturer and supplier are
- If you use a cloud-based ERP solution, then you can use it from any device and location as you wish, so you can keep an eye on your business whether you are in the office, working remotely or on a business trip.
And that’s just the beginning of how you can use an ERP tool to improve how the brand store works.
What are the other benefits of using Shopify ERP integration?
An ERP REPORT by Panorama Consulting Solutions shows that in 2020, 35% of businesses moved from their legacy systems into a more modern enterprise resource planning solution. Why? Legacy systems simply started to fall short in modern times where processing large amounts of data and having access to real-time data is basically a matter of business survival. And when it comes to enhancing the customer experience or optimizing a supply chain, real-time visibility and accurate information are essential.
In the same research, 61% of organizations said that they noticed the benefits of the ERP system after implementing it. Which ones? Let’s look at some of the biggest benefits that come with it.
1. Enhanced productivity
The top reasons companies decide to implement an ERP are increasing efficiency (35%) and reducing costs (29%). And a visible boost in employee productivity is one of the biggest benefits of such a solution.
Since it can easily take over most of your team’s mundane tasks daily (like updating the data inside the systems, tracking metrics, or creating reports), they have far more time to focus on more complex tasks. Having accurate data from all departments available at a glance also makes their work far easier, as they don’t have to spend time adding the data themselves or asking other departments about the order status, for example.
An extra benefit is that the app can work 24/7 without breaks, so it can also process data coming when the business is closed. Therefore, the staff won’t have to waste time in the morning sorting and processing data that came the previous day – everything will be already organized and processed for them.
2. Superior customer experience
Enterprise resource planning solutions can also help significantly improve your customers’ experience at the store. We all know that customer demands are only growing now – and ERP might be exactly what you need to meet or even exceed their expectations.
For example, when the customer service and sales teams have quick access to the customer data they need at the moment, they can go straight to handling customer complaints or problems and answer all their questions. They can also process and send orders much faster by automating some sales order processing tasks.
What’s more, you can create automatic notifications for when your inventory drops below a certain threshold. That way, you can order supplies before you run out of them and keep a steady number of items in the warehouse – that might be especially useful during a peak sales period.
By improving operational efficiency, an enterprise resource planning can also help your organization cut costs while increasing profitability across all departments, from manufacturing to finance. Based on G2 research, a properly implemented ERP can reduce operational costs by 23% and administrative expenses by 22%.
Once you have all of your apps used in the company put together, you as the store owner will be able to monitor what’s happening at every single of the stores and then make better decisions at a given moment. For example, by tracking the inventory status 24/7, you’ll know exactly what supplies you should order and which are sitting in the warehouse unused – preventing overspending. That gives you full cost and sales transparency around your entire store (or multiple stores).
But by automating repetitive tasks, such as drafting reports, handling payrolls or invoices, or passing data between multiple applications, you’re also saving your team’s time, which they can then use for more urgent tasks.
As a cherry on top, automating many basic, tedious tasks between the ERP and Shopify operations will also help eliminate costly mistakes and keep track of any potential problems before they even happen. All those things will visibly cut your operational costs in the long run.
4. Data security
Around 27% of business respondents are worried about a security breach when adopting an enterprise resource planning solution. This is especially true if they are considering a cloud solution that appears incredibly useful on the one hand but could be dangerous on the other, looking at the number of hacking attacks that happen every day.
Storing all the essential data in one place when cyberattacks are on the rise might not sound like the best idea after all, especially when you have plenty of customer personal information. However, an ERP system does come with a few features that can make sure that your Shopify store data is secure.
One, you have full control over who has access to the information in the database and can edit the authorization settings at any time. As the data (and all changes to it) is fully visible to all employees, that also makes it harder for anyone to try and manipulate the data in secret.
Most ERP solutions can also automatically back up data and store it in an encrypted cloud database. So if you lose access to the business data at any point, you can recover it almost immediately from the backup – but for hackers, the encrypted data will be useless.
5. Better inventory and warehouse management.
Tracking and monitoring inventory is a challenge, especially if you have several stores or a large number of orders. And if you have several scattered warehouses as well, then inventory management can turn into a nightmare.
For an enterprise resource planning platform, though, keeping an eye on the warehouse and supply chains 24/7 isn’t the slightest problem as they can track all items using serial numbers or RFID tags – even those that are still at the manufacturer site or in transit.
And besides the number of items or supplies you have, an ERP can also give you highly accurate data on customer demand, shipping and storage costs, any issues during manufacturing or shipping, and even alarm you of overstock and understock.
Who can benefit from Shopify ERP integration?
So who exactly can benefit from connecting ERP to their Shopify account? Is it only something large brands with several stores should use? That could be the case in the past when such solutions were extremely expensive, but not so much now, as small and growing businesses can find an ERP integration just as valuable.
As a company grows, so does its amount of data generated—and data sources to track. The number of systems and tools they are using daily increases as well. One research found out that, on average, a small business uses 102 different apps, while each mid-market business uses an average of 137 apps.
Managing the store’s data across so many apps and platforms can quickly become costly, time-consuming, tiring, and confusing at times. If this is a problem for your company as well, then moving them to an enterprise resource planning is worth considering.
When else should you start thinking about getting ERP software?
- You’re losing track of all those spreadsheets, constantly switching between software, or struggling to get the apps to communicate with each other.
- Accurately tracking the inventory or supply chain is difficult or impossible.
- Since the teams work separately, they struggle with regular team collaboration or data exchange.
- Your team spends too much time on tasks like manual data entry tracking metrics, updating databases, or writing reports.
- Tracking the progress of the projects or supply chains takes far too much time.
- Neither you nor your employees know what is happening in other departments and often learn too late there’s an issue.
- Every department uses different data types and forms, making data exchange almost impossible.
While there’s no hard-and-fast rule on when exactly your ecommerce business should move, if you noticed that your team is struggling with most of the points above, then ERP might be a solution to all of them. While the implementation method your business chooses might come with some challenges to overcome (more on those in a moment), you can get the money spent quickly in the form of far smoother business processes, maximized workflow efficiency, and far happier staff (and customers) as well.
What ERP systems integrate with Shopify?
Now, which of the many business platforms can you use together with Shopify? There are a couple of options for you to consider.
One option is to go for the Shopify Global ERP program, available to both regular and Shopify Plus users. With the program, merchants can now access some of the leading ERP platforms like Netsuite, Brightpearl, and Acumatica ERP directly from the Shopify app marketplace. Soon, Microsoft Dynamics 365 will also be available to download there.
Another way is to browse websites such as Capterra or G2 to pick the most suitable solution for your store that also has an ecommerce ERP integration. But with Capterra having over 1400 ERP software reviewed on their website, how can you pick the right one and not end in the “ERP failure rate” statistics?
Shopify ERP integration – challenges
For all the incredible benefits an ERP tool can give you, there are a few other equally essential statistics that could give you second thoughts. Namely, ERP failure rates, actual cost, and time involved.
According to Netsuite research, 50% of ERP implementations fail the first time around, cost three to four times more than initially planned, and also take 30% more time than estimated. Why?
Here are a couple of problems brands often come across when implementing an enterprise resource planning platform:
- Lack of or inadequate planning: ERP can solve an array of problems, but first, you need to know what exactly you want from it, what features you will need, and what application you want to connect to it. The success or failure of the implementation will depend on this stage, so you shouldn’t rush here. Spend time talking with your managers and team members about it, it’s a good moment to plan an ERP training for the team later too. If you are in doubt, then sharing your requirements with the vendor or development company is always a good idea.
- Reluctance to use the solution: With how much time your team spent during tasks manually or using other apps, they might be pretty hesitant to switch to an ERP. And if the majority of the employees do not understand how to use the new tool, they won’t use it. However, if you show them practical benefits of using the platform (such as easy access to all data or automating business processes that were taking a good part of the day) and how to use the tool daily, they are far more likely to accept it.
- Going over the budget: Many businesses underestimate the cost of the ERP in the long run. For example, system modifications needed to improve usability cause overspending 65% of the time. But adding multiple customizations to the platform or not budgeting for training, maintenance or updates can quickly rack in the cost as well.
- Poor data quality: As ERP relies on the data it has inside the database, having inaccurate, corrupt, or outdated information can cause the platform to give wrong suggestions or run processes incorrectly. Before transferring data into the solution, it must be cleaned of errors and updated. If you haven’t done it earlier, this is also the right moment to set standardized rules for entering data.
- Picking a platform without a long-term plan: If you choose a platform without thinking about what features or integrations you might need in the future, the ERP might quickly become obsolete, or you might need additional apps to cover the extra features.
How to integrate Shopify with ERP?
Now that we got through all the benefits and risks of getting an ERP platform, you probably want to know how exactly you can integrate your Shopify store with it. There are a couple of methods, depending on which platform and ERP integration approach you picked.
A native integration is the easiest to handle, as you can find the connector apps in the Shopify marketplace and add them to the store from there. For example, thanks to the Global ERP Program, you can install the NetSuite or Brightpearl connector straight from the Shopify app marketplace and then transfer data to the app. Then a NetSuite/Brightpearl implementation team or Shopify-certified partner will help you manage the rest of the implementation process.
If you need to transfer large amounts of data or want to add a custom integration to the ERP though, then the safest option is to ask a Shopify development partner to help you handle the integration process.
Hiring a developer familiar with Shopify ERP integrations means that you will both get advice on choosing the best platform for your business needs but also how you can use it for the most power. They will also help implement the system, transfer the data and then offer ongoing support with the maintenance or any issues you might face.
As a Shopify development partner, we at WeCanFly helped several clients integrate their basic or Shopify Plus stores with their enterprise resource planning systems or build custom integrations for their online stores. With our help, you can smoothly connect your Shopify store to ERP, CRM, or PIM systems and transfer the entire data safely. Similarly, we can also help you build a custom Shopify ERP integration for the store if you need one.
Moving to an enterprise resource planning and integrating it with your regular Shopify or Shopify Plus store might seem like a big and risky decision to make. But you’ll see the benefits in no time. Thanks to the Shopify ERP integrations, you can both save time and money while also making the business run smoother than ever. You should also quickly notice that several key tasks will become significantly more efficient, thanks to automated stock updates, shared databases, business forecasting, and more. That will also boost your Shopify sales to a higher level without increasing the teams’ responsibilities and workload.
But to ensure a successful implementation, you need to carefully think about what you expect from a Shopify ERP system and how your brand plans to use it in the future. Asking a development company like us to assist you to manage all the technical aspects can also help you rest assured the new enterprise resource planning will work exactly as you expect it and supercharge your Shopify store.