SALESWARP.COM

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?< OR >

SALESWARP WHITE PAPER SERIES | ERP FOR ECOMMERCE

SALESWARP.com

P. 2

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.

>

SALESWARP WHITE PAPER SERIES | ERP FOR ECOMMERCE

SALESWARP.com

P. 3

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.

>

SALESWARP WHITE PAPER SERIES | ERP FOR ECOMMERCE

SALESWARP.com

P. 4

THE PROBLEM WITH TRADITIONAL ERP SYSTEMSRetailers 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.

>

SALESWARP WHITE PAPER SERIES | ERP FOR ECOMMERCE

SALESWARP.com

P. 5

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.

SALESWARP WHITE PAPER SERIES | ERP FOR ECOMMERCE

SALESWARP.com

P. 6

LEVERAGING AN ERP FOR ECOMMERCE SYSTEMBecause 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.

>

SALESWARP WHITE PAPER SERIES | ERP FOR ECOMMERCE

SALESWARP.com

P. 7

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.

SALESWARP WHITE PAPER SERIES | ERP FOR ECOMMERCE

SALESWARP.com

P. 8

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.

>

SALESWARP WHITE PAPER SERIES | ERP FOR ECOMMERCE

SALESWARP.com

P. 9

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.

SALESWARP WHITE PAPER SERIES | ERP FOR ECOMMERCE

SALESWARP.com

P. 10

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.

SALESWARP WHITE PAPER SERIES | ERP FOR ECOMMERCE

SALESWARP.com

P. 11

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.

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.