Practical Ecommerce

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.

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Dale Traxler
Dale Traxler
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Comments ( 11 )

  1. Rahul Agarwal August 31, 2012 Reply

    This indeed is a good peice of information. I certainly agree that it is important to have an integrated platform. Talking about Netsuite how is your experience using Netsuite, does it meet your expectations, did it require customizations and how did the implementation process went?

  2. Damon Sloane August 31, 2012 Reply

    I’ve had a similar experience with a couple of different companies – organized chaos. There’s a relatively new term that describes a process that seems to be what you’re talking about: Customer Experience Management (CXM).

    Brian Walker from Forrester explains it well here: http://blogs.forrester.com/brian_walker/11-08-10-cxm_solutions_visible_on_the_not_so_distant_horizon

    Seems to be the companies with a more mature vision are adopting this approach.

  3. HK August 31, 2012 Reply

    Not sure if the reasonable all in one solution yet exists. IMO Netsuite is overpriced. Custom solutions give a better and tailored solution and, if you have good tech in house, you can make it work much better. databases do talk to each other. YMMV

  4. ebernhard September 4, 2012 Reply

    What really bugs me is that the often solution to process/manage 3rd party orders (Amazon Merchant Seller, Ebay, Buy.com, etc) is to pull it all together via 3rd party. I refuse to have to different customer/inventory databases, but often very difficult to get order import/exports to work with existing cart. Also limits possible carts, because you need to own the code to do this kind of customization.

  5. seosamba September 4, 2012 Reply

    Ebernhart, can you expand a bit please about the difficulties you faced when wanting to consolidate marketplaces interaction with your cart? which cart did you use? what did you end up doing?

    Thanks.

  6. Elizabeth Ball September 4, 2012 Reply

    Dale, the benefits are obvious and this echoes where I am with my website. However, in reading the Internet Retailer Top 100 Retailers Handbook, I was curious to notice how many of the biggest player do not have integrated systems. Is it the hassle, cost, or the quite valid fear of putting all their ecommerce eggs in one basket?

  7. David Anderson September 5, 2012 Reply

    Dale, I couldn’t have stressed the need for consolidation & integration any better. Our company SalesWarp is a relatively new E-commerce platform that does integrate both the front-end and back-end operations giving retailers one system that manages and/or integrates all their product data, orders, warehouse/ERP, inventory, fulfillment, feeds, CRM, accounting, shipping, 3rd party marketplaces (ebernhard)… If anyone on this thread has any questions, please reach out.

  8. Dale Traxler September 5, 2012 Reply

    Responding to several comments:

    Rahul – overall, my experience with Netsuite was very positive. The implementation took us about 6 months from the first training to turning on our first online store. Most of that was content creation – for our products – not actual Netsuite related work.

    Howard – re Netsuite being overpriced – that’s a relative term. My costs for Netsuite were less than half of what I would have had to pay an inhouse developer or system administrator for a more traditional system. And I did not need to hire a bookeeper, pay for other systems to do CRM or inventory mangement etc. I think Netsuite saved me tens of thousands of dollars per year, not the other way around.

    Elizabeth – I think that integrated systems are incredibly complex and vendors tend to aggregate their offerings around the "hottest spots" – right now that is marketplace management and order management. Adding the other ends of the systems – shopping carts to ERP to Financials is very, very difficult. Really, only Oracle, IBM, and Netsuite seem to have a solution that crosses the entire solution set. Even then, they are not all best of breed, so you need to be able to plug in other solutions as well.

    Dale

  9. YDeveloper September 11, 2012 Reply

    The best integrated ecommerce system allow an online retailer to make all activities starting from inventory manage to order management, shopping cart management, shipping management easy and flexible. So, they always looking for such system to their ecommerce site.

  10. Scott Wheeler April 14, 2013 Reply

    As you have pointed out, the elusiveness of real-time inventory management has been a primary driver for businesses seeking out such fully-integrated single-provider systems. The landscape has changed though, and achieving real-time inventory doesn’t require a capital investment, out-of-reach of small business operators thinking they must abandon their QuickBooks or Sage 50 accounting systems.

    I author the CartSpan eCommerce integration for QuickBooks, Sage 50, and Peachtree accounting systems. This is a focused integration that overcomes the issues you have raised while allowing the store-owner to select from a large number of eCommerce platforms that best suit their internal business processes; rather than locking into a one-size-fits-all platform.

    The best example of this is the CartSpan integration for the Magento eCommerce platform. In addition to superior support for Magento’s standard functionality, CartSpan natively supports many of the very popular community extensions that help meet the business requirements of online merchants. This coupling makes it increasingly difficult for all-in-one systems to argue a higher cost/benefit ratio. CartSpan lists one customer review on Magento Connect that exclaims, “When using CartSpan…we have been able to operate like companies 10x our size for a fraction of the cost.”

    CartSpan, and similar integration solutions on the market, offer 100% ROI in only 2-3 weeks if the business processes approximately 17+ orders per day. This is a ridiculously attractive return when one considers the incremental margin required to pay for the all-in-one solution.

  11. Matthew Barbour October 3, 2013 Reply

    Great Article! In addition to Netsuite, the Nexternal eCommerce Platform offers XML Tools designed to allow data synchronization and integration with third party systems housing similar data. Some of Nexternal’s clients have used the XML Tools to create real-time integrations with the following systems:

    QuickBooks
    NetSuite
    SalesForce.com
    ShipCompliant
    eMobilePOS
    Oracle
    Ecometry
    Sage
    Comcash
    Microsoft Dynamics

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