ECommerce is a part of everyday life. The number of transactions that occur online is significantly higher than the number of transactions that occur face-to-face. It has become an essential function of businesses, particularly amid the global COVID-19 pandemic.
Ecommerce companies have the unique ability to establish a software storefront while leveraging other parties to make, stock, transport, and deliver their products. Typically, eCommerce companies are thought of as businesses that sell a majority of their products or services online. ECommerce businesses differ from pure wholesale distributors, manufacturers, or retail stores while retaining traits of each of these legacy industries. They may rely on third parties for their manufacturing needs and may not have their own warehouses, shipping trucks, or inventory. To make matters more complex, eCommerce businesses may be a combination of the above, making some products, while sourcing others; stocking and fulfilling some products while relying on third-party logistics or vendors to stock and fulfill others; some may have a brick-and-mortar location and still others “stock” their inventory inside of big box stores until the point of sale.
ECommerce digital transformation should be more exciting than scary. Many businesses can explore digital transformation possibilities with eCommerce functionality. While digital transformation may seem like it is meant to ease work for business users, it really is the framework for reimagining customer experience, and that usually starts behind the scenes with better software, including eCommerce and ERP.
Digital transformation facilitates company-wide knowledge and understanding of the processes that are taking place across the organization. Within a digital environment, staff can leverage real-time information for enhanced decision-making across core business processes. As for the customer, digital transformation may be as simple as upgrading shoppers’ access to products across all your channels in one shopping experience. In this scenario, eCommerce website software, as well as inventory, accounting, and ordering, must all integrate seamlessly to ensure a great customer and worker experience.
But digital transformation for eCommerce businesses isn’t reserved for product-based companies. Service businesses can enjoy the benefits of digital transformation, too, even if they don’t have a product to manufacture, ship, and deliver. Offering reservations for attractions, accommodations, vehicles, or restaurants via a website or app broadens a company’s reach while enhancing the customer’s ability to do business with you. Yet there must still be an integrated software interface that presents available options in an elegant way that your customer will want to interact with. Layering an eCommerce application (like AirBnB or Uber) over the top of a traditional service (like vacation rentals or taxis) can transform a legacy business into a brand-new enterprise capable of reaching new markets.
Software vendors and implementation partners are accustomed to working with traditional manufacturers and distributors with traditional manufacturing and distribution business models. A growing eCommerce business finds itself in the difficult position of navigating software that was not primarily developed for its business model when undergoing a digital transformation. Simply buying a best-in-class ERP to integrate with their eCommerce site will not solve their inventory, order, and accounting woes.
The typical software ecosystem for an eCommerce company minimally includes the following business processes:
Depending on whether the eCommerce company is serving consumers, businesses, or both add an additional layer of complexity to the ecosystem; wholesale businesses may involve a variety of scenarios for order and inventory management. Managing the flow of data out of the eCommerce site is not necessarily as simple as setting up an integration platform to the new ERP or order management tool.
Be upfront when considering which digital transformation route will provide the best outcome for your business. This involves setting a clear strategy by coordinating with all key stakeholders. If you don’t do this, one of two things may happen: you might pay magnitudes more than you actually need for software; or conversely, you may vastly underestimate the technology underpinnings to successfully transform disjointed inventory, order, and accounting processes and lose your job for buying technology your company cannot afford to deploy.
Our greatest piece of advice for contemplating digital transformation in eCommerce is to know what you want. ECommerce businesses need to be absolutely sure of what they are looking for prior to the search. It is far too easy to get lost in the variability of the solutions in the market; however, it is possible to avoid getting overwhelmed.
Still not sure how to approach the digital transformation process? We’re here to help. Contact ERP Advisors Group to set up a consultation today.