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What is ERP? A guide to enterprise resource planning systems

Thomas Wailgum | July 28, 2017
Enterprise resource planning (ERP) software doesn’t live up to its acronym. Forget about planning — it doesn’t do much of that — and forget about resource, a throwaway term. But remember the enterprise part. This is ERP’s true ambition. It attempts to integrate all departments and functions across a company onto a single system that can serve all those different departments’ particular needs.

 

How does ERP fit with e-commerce?

 

ERP vendors were not prepared for the onslaught of e-commerce. ERP is complex and not intended for public consumption. It assumes that the only people handling order information will be your employees. But now customers and suppliers are demanding access to the same information your employees get through the ERP system — things like order status, inventory levels and invoice reconciliation — except they want to get all this information simply, without all the ERP software jargon, through your website.

E-commerce means IT departments need to build two new channels of access into ERP systems — one for customers (otherwise known as business-to-consumer) and one for suppliers and partners (business-to-business). These two audiences want two different types of information from your ERP system. Consumers want order status and billing information, and suppliers and partners want just about everything else.

Traditional ERP vendors are having a hard time building the links between the web and their software, though they certainly all realize that they must do it and have been hard at work at it for years. The bottom line, however, is that companies with e-commerce ambitions face a lot of hard integration work to make their ERP systems available over the web.

For those companies that were smart — or lucky — enough to have bought their ERP systems from a vendor experienced in developing e-commerce wares, adding easily integrated applications from that same vendor can be a money-saving option. For those companies whose ERP systems came from vendors that are less experienced with e-commerce development, the best — and possibly only — option might be to have a combination of internal staff and consultants hack through a custom integration. No matter the details, solving the difficult problem of integrating ERP and e-commerce requires careful planning, which is key to getting integration off on the right track.

One of the most difficult aspects of ERP and e-commerce integration is that the internet never stops. ERP applications are big and complex and require maintenance. The choice is stark if ERP is linked directly to the web: take down your ERP system for maintenance and you take down your website. Most e-commerce veterans will build flexibility into the ERP and e-commerce links so that they can keep the new e-commerce applications running on the web while they shut down ERP for upgrades and fixes.

The difficulty of getting ERP and e-commerce applications to work together — not to mention the other applications that demand ERP information such as supply chain and CRM software — has led companies to consider software known alternately as middleware and EAI software. These applications act as software translators that take information from ERP and convert it into a format that e-commerce and other applications can understand. Middleware has improved dramatically in recent years, and though it is difficult to sell and prove ROI on the software with business leaders it can help solve many of the biggest integration woes that plague IT.

 

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