The Benefits of an Integrated Ecommerce System
Editor’s Note: This is part one of a three-part series on the benefits of an integrated, all-in-one ecommerce platform. The second installment is “Defining Your Integrated System Requirements.” The third is “Choosing an Integrated Ecommerce System; 4 Steps.”
I am consulting with a company that has a jumble of solutions that feed into its website. These include email marketing, call center functions, accounting, and inventory operations. The basic content management system is homegrown. The solutions are so disjointed, I don’t know how the company gets by.
It reminds me of my own dilemma from six years ago, when I was operating my own ecommerce business. Here is a rundown of our ecommerce systems at that time.
- Miva Merchant as our shopping cart.
- HTML website integrated with Miva for more flexible website design.
- Several Miva “bolt on” products for promotions, rewards programs and such.
- ShipWorks for managing orders.
- Endicia for postage.
- QuickBooks for accounting — we reentered summary order information by hand.
- Constant Contact for email newsletters.
- Urchin analytics — now Google Analytics.
- Authorize.Net and PayPal for credit card payment gateways.
We had no inventory control. We had no integration between QuickBooks and anything else. All order editing had to be done within ShipWorks. If an order was modified, we had to go into Authorize.Net or PayPal to make a manual change to the amount charged. If a customer called with a question about an order, we had to cross reference the order within ShipWorks to find the tracking information and what was actually shipped. Then we had to check QuickBooks and possibly Authorize.Net or PayPal to ensure the order was properly charged.
In short, our customer data was spread out in three systems; our product information was in two systems. We spent most of our time finding, managing, and reentering data.
It was then that we decided to invest in an integrated platform — NetSuite, in our case — that would streamline our operations and centralize our data.
Most platforms are now more efficient than ours was in 2006. But I learned then that if you really want to be able to scale your ecommerce business, use an integrated platform.
Goals of an Integrated System
The goal of an integrated solution is to increase your revenue potential and reduce your operating costs. A well-designed solution will allow you to add new products more efficiently by reusing product data in several different operations. You should have fast access to all customer history and information in your online, call center, or physical operations. That will impact your top line in a positive way by allowing you to reference past purchases and potentially up-sell from an automated system.
By integrating data systems, you will introduce operational efficiencies. For example if your order management is tied directly into your accounting and you do not need to manually post individual or summary order information, you will reduce costs and have real time access to your financial performance. Having product data centralized will allow you to use it in feeds, on your website, in your call center, and in your physical stores if you support multichannel operations.
Finally, having higher levels of integration will create more efficient workflow. Ideally, data will be integrated and you can introduce automation for many fulfillment and back office processes.
Data Storage in an Integrated System
An integrated system minimizes the number of places where you store data. Ideally, you will end up with a single database for all your various operational systems. NetSuite, for example, offers an integrated data platform. (While I used NetSuite for five years in my previous business, I have no ongoing relationship with that company).
Most ecommerce sites, however, use a variety of technologies rather than an integrated system. Those sites should strive for no more than three separate databases — for customers, products, and financial records — as follows.
- Customer data. Ideally will include shopping and browsing history, order history, email preferences and response history, personal information, and payment information. Having visibility into open or abandoned carts is very useful.
- Product data. Should include all product content, vendor information, product costs, pricing information, discount levels, packaging information, product sales and purchase history, inventory levels, reorder points, stocking levels, channel sales targets. Anything relevant to either buying or selling the product should be in this database.
- Financial data. This gets a bit fuzzier. For many of you, vendor and purchase histories may be stored in your financial system rather than your product systems or shopping cart. Likewise for sales history: it may exist in your customer relationship management system or your shopping cart and not be fully synchronized. Regardless, financial data will include sales numbers, operating expenses, payroll information, and chart of accounts.
If you have separate databases for email marketing, inventory control, order management, or other applications, you are likely facing challenges with systems talking to one another. Also, if you send data feeds to marketplaces, comparison-shopping engines, or ad platforms, you run the risk of being out of sync with your product inventory or in conflict with your pricing on other platforms.
Processes of an Integrated System
You want as few processes to support as possible. The more integrated your systems, the more likely that your processes will be simplified. To illustrate, I’ve identified five common processes, below, that an integrated system should accommodate.
- Customer relations. Name, address, order history.
- Marketing. Ad feeds, email, social media, analytics.
- Product management. Vendor data, product details, inventory control.
- Fulfillment. Picking and packing orders, warehouse management.
- Accounting and finance. Sales, purchases, expenses, payroll, budgeting, reporting.
The processes listed above can be supported by a wide variety of different applications or platforms. Many applications are designed specifically to do a single task, such as customer relationship management, and they do them well. The problem is that if you invest in best-of-breed solutions, you’ll end up with disjointed integration.