ERP vs. Ecommerce Software: Which Should You Choose?


July 31, 2019

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Ecommerce is high-speed, high-stress and never-ending. That is, until you find the right team and workflows to help you out.

Whether used to boost productivity or eliminate costly errors, automation is key to your success as an online seller. The problem is, tons of software now claim to do the same thing.

Enterprise resource planning (ERP) systems are among them. While an invaluable tool for large businesses, ERPs aren’t an apples-to-apples replacement for software that’s specifically made for ecommerce.

cta to download an ecommerce software checklist

Below are fundamental differences between the two types of systems. Keep reading to learn which is best for you and how ecommerce software has evolved well beyond simple automation.

What is an ERP?

Running a business requires juggling everything from finance to operations, sales to marketing. ERP systems aim to consolidate these back-office processes into one system. They help you track, store and share information across various departments, ensuring that all of your employees rely on the same data.

Popular ERPs like Oracle, NetSuite, SAP, and Microsoft Dynamics are traditionally considered business management systems with accounting at their core. But to keep up with the changing tide of retail, many now have integrations for ecommerce solutions like:

  • Order management systems (OMS)
  • Warehouse management systems (WMS)
  • Inventory management systems (IMS)
  • Supply chain management (SCM)
  • Product lifecycle management (PLM)
  • Product information management (PIM)
  • Customer relationship management (CRM)
  • Business intelligence (BI)
  • Human resources management (HRM)
  • Customer experience management (CX)
  • Shopping carts like Shopify

The Challenges of ERPs in Ecommerce

Because ERP monoliths aren’t tailored to a specific industry or line of business, the quality of their ecommerce integrations often falls short of expectations. They’re built on older technology that just can’t keep up with ever-changing marketplace requirements or the level of innovation that ecommerce software routinely delivers.

Most ERPs are also built for back-office purposes. They’re not designed for customer-facing sites like your webstore, which need additional data transformation and real-time analysis. When you hinge your whole multichannel business to an inflexible system like this, you risk listing errors, noncompliance and other mistakes that can cost you your right-to-sell on marketplaces like Amazon.  

To address another concern: ERPs require major financial and time investments. Aside from annual subscription fees, you face up-front and support costs that can each run into the hundreds of thousands of dollars. (Not to mention, you’ll likely have to involve multiple teams and hire an outside consultant.)

This, coupled with the fact that it can take years to fully implement an ERP system can lead to disruptive changes to your business. Put plainly, things can get really messy really fast.

So, if not an ERP, what approach should you take?

A True Ecommerce Solution

There’s an emerging trend entailing the modularization of enterprise software. In practice, you can create your perfect ecommerce ERP by picking and choosing specialized platforms to plug together. With the right partner, setup may only take weeks.

For example, imagine that you use Salesforce CRM to store customer data. You simultaneously use SkuVault’s WMS for order management, and EasyPost for fulfillment. Each are masters of their craft—you just need a way to marry these tools to avoid logging into each platform separately or manually relaying information from one system to the next. Enter commerce operations management (COM).

What is a Commerce Operations Management (COM) Platform?

A COM platform centralizes multiple ecommerce platforms into one environment. At its core is a product information management (PIM) platform specifically for multichannel sellers. It connects a seller’s catalog and data to  marketplaces and shopping carts that they’re selling on.

This piece is crucial. PIM is the lifeline for the rest of your tools; with the ability to transform data to each unique sales channel, a COM platform can properly display information to your customers when needed.

In other words, when sales are raining in from multiple channels, your COM software does several things:

  • Receives and routes orders automatically to the right warehouse, which are managed through your WMS, 3PL or other source. ERPs, by comparison, may require manual data entry for each order.
  • Updates inventory on both the backend and frontend. This means that your team and warehouse are up to date while your customers are shown the right quantities on each channel, preventing overselling. ERPs aren’t natively set up to send data to external sites, like eBay or your 3PL, so you’ll have to rekey stock levels by hand for every channel.  
  • Analyzes data in real time to provide actionable business intelligence spanning your catalog, pricing and inventory strategies (among others). On the ERP front: you’re dealing with spreadsheets. ERPs offer great operational insights but won’t perform trend analysis or demand forecasting.
illustration of how zentail's commerce operations management platform works

In essence, your COM system quarterbacks product, pricing, inventory and order data. Although there are multiple software vendors in play, data easily flows between these systems via your COM in a highly customized fashion.

Can you integrate a COM into an ERP?

Yes. The two aren’t mutually exclusive. In fact, they can be very complementary to each other if integrated well.

If you’re already working with an ERP,  avoid ripping it out and instead consider building a workflow that looks something like this:

how zentail integrates with an erp

Here, the COM platform augments the native functionality of the ERP. The COM manages product data and handles the critical ecommerce-related aspects like content syndication, listing errors, pricing and inventory syncs.

The ERP, in turn, serves as the inventory master. It receives and processes orders, passing off any updates to the COM. Basic product data from the ERP can flow safely into the COM, where it is syndicated to each sales channel.

In Summary

ERPs streamline internal data and processes across your organization. Meanwhile, COMs streamline your ecommerce operations. It helps you manage multiple marketplaces and apps at once, and transforms data so that it can be publicly displayed on all of your sales channels.

For the ERP-less: If you’re looking for an ecommerce solution, then a COM is the clear winner. Setting up a new ERP can be cumbersome whereas a COM like Zentail only takes weeks to install. Moreover, a COM is nimble. It’s specifically built to unify your sales channels, warehouses and apps and to field data from all directions. In short, COM delivers real-time results for real-time needs.

Zentail is the leading COM platform, trusted by today’s top brands and retailers. With AI-powered listing tools and the industry’s most user-friendly interface, you can easily augment an existing ERP or build your own perfect solution. Get started today.

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