When a customer orders something from your ecommerce business, what happens next? You need to recognize and acknowledge the order, get it ready for shipping, notify the customer when it’s about to ship, and then adjust your inventory levels.
All of this happens multiple times per hour for a successful ecommerce company, which means no part of the process can afford to break down.
Unfortunately, breakdowns do happen quite often when you’re handling every aspect of the ordering process individually. Maybe you’ve got separate employees managing each step, in which case human error can occur. Well, an ERP system will transform the entire ecommerce order process for your business, streamlining everything and making it virtually impossible to mess up.
The result? A better ordering system for both you and your customers, meaning everyone is happy. How does an ERP system handle all of this? Let’s walk through the main steps to demonstrate how simple everything becomes.
ERP Systems Explained
Before we get involved in all the different steps, let’s take a moment to explain what an ERP system is and how it works for your business. Essentially, it’s a software solution that lets you manage all of your main activities via one platform. This includes the following:
- Accounting/finance
- Sales
- Inventory management
- Customer services
All of these different departments remain connected through an ERP system so it’s much easier for you to manage and control your entire company. Popular ERPs include NetSuite and Workday – though the former is gaining prominence due to the rise in NetSuite consultants up and down the country. These consultants are helping businesses get even more from their ERP system, which is translating to serious operational benefits.
So, after clearing that up, let’s take a close look at how an ERP system transforms the ecommerce order process.
Step 1: A Purchase Is Made
One of your customers visits your ecommerce store and buys a product. From their perspective it’s a simple case of browsing your website, finding what they want, adding it to their cart, and checking out.
You make the checkout processes as streamlined as possible to improve their experience, and as far as they’re concerned the purchase is done. Behind the scenes, however, your ERP system kicks into action to get the product ready for shipping as soon as possible.
Step 2: The Purchase Is Acknowledged
This is really where the magic begins. Your ERP system makes a note of the order and notifies your sales team through the integrated sales platform. They receive an alert that tells them a sale has been made, which then also records this sale in the system.
That’s a crucial step because it helps you keep track of all your ecommerce orders at all times. It’s all done automatically as well, meaning there’s no worry of a sales worker forgetting to catalog an order.
Step 3: Your Inventory Management System Updates
Without an ERP system, your sales team would need to contact the inventory management team to alert them of this sale. Or, they’d log into the inventory management platform and handle this manually. It leaves a lot of room for things to go wrong – and you absolutely do not need any inventory issues.
One big ecommerce problem is the presence of fake inventory information. As far as you’re concerned, you’ve got enough stock in your inventory to fulfill x amount of orders. However, the orders come in and you realize there’s actually less stock than you thought. How has that happened? It’s because you’ve not tracked the inventory correctly and some purchases weren’t recorded.
ERP systems exist to prevent this problem from happening. Thanks to the automated nature of an all-in-one system like this, the inventory management platform will always update with every order. This gives you real-time stock levels to stay on top of things and know when it’s time to re-order supplies. In some cases you can even set up automations to re-order when inventory levels reach a specific figure.
All in all, an ERP system completely revolutionizes this part of the process by allowing you to maintain adequate inventory levels. You should never be in a position where you have to contact a customer and apologize because you actually don’t have the product in stock.
Step 4: Your Finance Team Receives The Payment
As the inventory system updates, your finance team receives the customer’s payment. Keep in mind that all of this is happening simultaneously in a matter of seconds! If you’re using the right banking software, then you can automatically assess payments and either approve or deny them. A lot of ERPs work with existing banking platforms to make your life even easier, so that’s great.
If the payment is approved, then the money is automatically updated in your accounts, meaning you never lose track of the money. Denied payments will get sent back to the customer along with an automated email explaining that their payment was rejected. They then get a chance to update their payment or give up on the purchase.
Again, doing this without an ERP means individual people will have to check payments, contact banks, etc. It’s so much more long-winded – and prone to mistakes.
Step 5: The Purchase Is Approved & Shipping Gets Notified
You then reach the final stage in the process, which involves notifying warehouses and shipping partners. They receive updates from your ERP explaining that an order has come through. It tells them what the product is and when it needs to be shipped by. A warehouse team uses this information to find the product and prepare it for shipping.
If you’re using a third-party shipping company, then they’ll be alerted to all of your orders, ensuring they arrive at the right time for delivery.
All five of these steps happen before you can handle one on your own. It’s the true benefit of an ERP system: everything is managed in one place, with so many automations allowing things to move quickly. Your customer places an order and receives a confirmation email, then all of this goes on behind the scenes to make sure they get their product ASAP.
