E-commerce companies are very complex. Different sales channels and movements of goods need to be looked at. The demands of the customers are increasing and the environment of the companies is becoming increasingly fast-paced. Efficient planning of resources and the rapid provision of information can often provide competitive advantages over competitors. To ensure this, ERP systems prove to be the solution. The benefits of a holistic system of resource planning and management are undeniable, but the choice of such a system is difficult. In this article we look at the topic of Shopify ERP.
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You use Shopify or Shopify Plus and need support in linking Shopify with ERP systems? We are at your side with advice and assistance. Get in touch with us!
What is an ERP system?
An ERP system is a bundle of software solutions that help a company implement resource planning and management of business processes. ERP software is usually modular, allowing companies to combine individual software modules according to their individual needs.
The ERP program connects all functions via a central database. With an integrated ERP, you can use a single software to oversee all areas of your business from procurement to production and sales to finance and accounting. This enables efficient planning and control across all company levels and departments.
Advantages of the ERP system
The benefits of a holistic system for managing the company are indisputable. The main advantages are:
Process optimization thanks to central data storage
Better collaboration thanks to a single data base
Consistency and transparency in information flows
Time and cost savings due to shorter turnaround times
Minimizing errors through better work organisation
For Shopify retailers, a combination of Shopify and an ERP system offers, above all, valuable work facilitation and time savings, which will benefit customers.
Types of ERP systems
ERP systems are no longer just for corporations. More and more providers are also targeting small and medium-sized enterprises (so-called SMEs) with their solutions. Thanks to leaner and scalable software, the use of ERP programs is also relevant for smaller companies. Over time, two variants of ERP solutions have developed.
1. On-premise software
An on-premise software is a computer program that works server-based. This variant of ERP systems includes the provision of licenses for locally installed programs. This means that the use of this solution is proprietary hardware in the sense of. Company computers and servers necessary.
Reading tip: The decision on-premise or cloud also affects the choice of shop system. In this article you will find out what the main differences are.
On-premise ERP systems are usually suitable for large companies and corporations. Due to the complexity of these companies, the set-up takes a long time and costs are high, but the requirements can be well mapped.
| Advantages | Disadvantages |
|---|---|
| No dependency on ERP providers | Own IT infrastructure required |
| One-time purchase of the licence | High effort for employee training and qualification |
| Data backup in your own hands | Sole responsibility for commissioning as well as maintenance etc. |
| Adjustments are possible at any time | Sufficient budget necessary |
2. Cloud-ERP-Systeme
Cloud ERP is a software-as-a-service (SaaS) solution that allows users to access the ERP software package online via a web browser. An installation on a company computer does not have to be done. ERP cloud providers usually use a rental model, which means that you as a retailer get all the components you need for a monthly flat rate and do not have to worry about maintenance, repairs and updates.
This variant is particularly suitable for SMEs, as the set-up is much faster and there is no need to set up an IT department. These solutions are also scalable and grow with the company’s requirements.
| Advantages | Disadvantages |
|---|---|
| No need for your own IT infrastructure | Dependence on external cloud ERP providers |
| Planned costs thanks to lump-sum rental | Company data is stored on external servers |
| Low effort for commissioning | Internet connection required for access |
| Unrestricted access across multiple devices and mobile |
ERP functions at a glance
Modern ERP systems cover all areas and business processes of a company. With ERP software, all business divisions have access to a common data base, so that functional boundaries are abolished. ERP programs include various basic modules as well as add-on modules that can be added as required.
Commodity management and logistics
The term material covers everything from raw materials to finished products. An ERP system allows you to keep track of all material movements – from procurement to storage to dispatching. The combination of Shopify and ERP allows fulfillment automation, which can be a valuable competitive advantage in fast-paced online business.
Advantages: With an ERP program, you can
build up efficient warehousing and reduce inventory, shorten lead times and increase delivery capacity.
Production
Production is the core area of many industrial companies and is an important building block in the ExRP software. Production planning and control (PPS for short) is an extensive component and requires interfaces to many other business areas.
Reading tip: A so-called PIM is very important for the growth of an e-commerce company. In this post you will learn everything you need to know.
It must be clear, for example, which and how much material is needed for production. As a result, the production area is closely linked to procurement and sales.
Advantages: With an ERP system, you can design production planning and control more efficiently on the basis of parts lists and centralized data management.
Finance and accounting
The recording and monitoring of cash and benefits flows by finance and accounting are simplified by an ERP system. While internal accounting focuses on controlling and cost management, external accounting is responsible for clean accounting and reporting to the outside world.
Solutions are available for both internal and external processes that automate tasks such as payments, reminders or depreciation, etc.
Advantages: With the combination of Shopify and ERP, you can create effective controlling with which you can optimize your financial flows and budget planning. Due to the uniform data base, no data is lost and reporting is simplified.
Human Resources
Human Resources is responsible for personnel management and all related tasks. This module brings together personnel planning, recruitment and development as well as operational tasks such as payroll accounting.
Time recording systems can also be used to record all working, personnel and machine hours.
Advantages: An ERP system provides you with comprehensive information in a bundled way to optimally manage your staff and make strategic decisions.
Customer-Relationship-Management (CRM)
Extensive opportunities in the areas of marketing and sales are bundled in a CRM module. Today, products and services are often sold through multiple channels. You therefore particularly benefit from linking Shopify with ERP. Centralized data management is essential to build an intensive customer relationship.
Reading tip: In this post, we will explain how to win back lost customers.
This creates the opportunity to offer first-class customer service and carry out coordinated marketing activities.
Advantages: Only a centralized database enables intensive relationships with customers without losing track, analysing past processes and submitting tailor-made offers.
Master data management
Central master data management is the heart of an ERP system. This ensures a smooth operation on the basis of consistent data sets. Not only different systems for the same data, but also additional information from individual departments or employees can inhibit the flow of information within the company.
Advantages: Centralized data management improves data quality in the company enormously. Inconsistencies and redundancies disappear, multiple entries and manual data updates are eliminated, resulting in time and cost savings.
Document management
Similar to the management of (customer) data, various workflows and documents are created in individual departments. Paper documents such as invoices and digital documents such as e-mails are captured by document management and centrally organized.
The database can be searched according to any criteria, allowing all areas of the company to access documents and workflows. With the link Shopify and ERP, you no longer get lost in the paper economy.
Advantages: In addition to the general clarity, information silos disappear thanks to the central document management and existing documents are archived appropriately.
Interfaces
Due to the complexity of enterprises, the number of data sources is increasing. A modern ERP system offers further interfaces to e-commerce solutions, for example, to ensure a holistic view of the company.
Reading tip: In this article we explain how to build multichannel with Shopify.
As an e-commerce company, these interfaces are extremely important to ensure a smooth process across all important channels and not to lose track.
New Shopify ERP solution
A big innovation has started in the last few weeks at Shopify. In addition to the global ERP program with partners such as NetSuite or MS Dynamics D365, a new local, European ERP program is now being developed. In the future, European retailers will be able to seamlessly connect local ERP systems to their Shopify shops, as announced by Linda Hoffmann, Sr. Business Development Manager at Shopify.
With this program, local ERP providers now have the chance to integrate their systems directly into Shopify and thus offer retailers a direct solution via the Shopify App Store. Shopify Apps are now available for the integration of ERP systems. As a result, the ERPs no longer need to be connected via API or by proprietary solutions and dealers in Germany, Austria and Switzerland benefit.
Current German ERP partners with their own app in the App Store include JTL, plentymarkets and Xentral.
Our recommendation: 5 Top ERP systems for Shopify
The Xentral ERP Business Software bundles all business areas in one place and automates workflows. With the lean ERP system, you can keep track of everything from logistics to all e-commerce activities to accounting. The cloud-based Xentral ERP covers all important functions.
Via API interfaces, many third-party tools can be integrated into Xentral’s ERP software with just a few clicks. In this way, individual processes can be automated step by step. The Cloud ERP from Xentral is available in different price packages in the subscription.
Working closely with COEUR DE LION, we have established Shopify Plus and Xentral’s ERP in the company to enable the company to continue to grow. The Xentral ERP system can now also be integrated directly via an app in the Shopify App Store. This was programmed by Latori in collaboration with Xentral.
Reading tip: Learn more about how we successfully supported COEUR DE LION in the transition to Shopify and the integration of Xentral ERP.
Microsoft Dynamics D365
With the expandable ERP, operations can be automated across departments. The ERP system offers a wealth of functions and the ability to integrate external data. The user interface is designed intuitively in line with other Microsoft products. Individual applications can be used independently, combined with each other or integrated into external tools. The Microsoft Dynamics offering is available as a software solution in the cloud or on-premise. In the past, we have already been able to support some customers with the integration of the MS Dynamics ERP system. Outdoorchef, the leading Swiss manufacturer of gas ball grills, relied on the service of Latori to connect a powerful ERP system with Shopify with Microsoft Dynamics D365. Mister Spex also relies on the know-how of Latori for the migration of its Norwegian contact lens shop Lensit to Shopify Plus and for the connection to the ERP system MS Dynamics.
Reading tip: Learn more about the background and details of the collaboration in our Lensit Case Study!
SAP
Probably the best known player on the market of ERP systems is SAP. For example, while Xentral’s ERP software is aimed at SMEs, SAP is also and above all suitable for large companies. SAP offers can be requested as an on-premise, i.e. local installation, as well as in the Software-as-a-Service model.
With this ERP all business areas can be automated. Due to the range of functions and the complex installation, both advice and onboarding from the expert are recommended. By the way, the Latori team can also help you here!
plentymarkets
The plentymarkets e-commerce ERP system simplifies the day-to-day work of e-commerce companies with numerous modules and linking all important channels.
The cloud-based ERP software provides comprehensive features and interfaces to automate the entire multichannel distribution for retailers. plentymarkets also offers its ERP subscription in different packages.
Shape Republic is one of the leading retailers in the area of feelgood food for women. Together with Latori, the company migrated from Magento to Shopify Plus. In addition to the general time pressure and customer-specific solutions for the online shop, we have integrated the cloud-based ERP system plentymarkets, the fulfilment solution odc and the Emarsys Customer Engagement Platform to create a seamless multi-channel solution.
Reading tip: In this post you will learn in detail how Shape Republic switched from Magento to Shopify with Latori.
JD Edwards
JD Edwards' ERP software suite provides a powerful, fully integrated system that can be used on-premise, cloud and hybrid. More than 80 application modules offer great flexibility for the automation of important business areas.
The wide range of functions and wide-ranging industry solutions make this ERP system particularly interesting for large companies.
Sennheiser, one of the best known manufacturers of headphones and soundbars, relies on Shopify Plus and uses the JD Edwards ERP system. For the technical implementation, the company relied on the service of Latori. The connection of JD Edwards to Shopify was based on EDIFACT.
Conclusion
ERP systems offer you a comprehensive overview of your company. As an online retailer, you benefit from the connection between Shopify and ERP systems, above all by simplifying work and saving time. With ERP software, you have all important data centrally available and easily keep track of multiple sales channels, goods movements and customers.
As the first Shopify Plus agency in Germany, we have experience in integrating different systems. We are at your side with advice and assistance and will be happy to advise you! Make an appointment now!
Frequently asked questions about the link between Shopify and ERP
What is an ERP?
ERP stands for enterprise resource planning. An ERP program helps you with resource planning and control of business processes. With the help of a central database, you integrate all business areas and have an overview of all processes within the company.
What is the difference between enterprise resource planning and ERP?
Enterprise resource planning systems only focus on the flow of goods (e.g. procurement, warehousing and logistics) and thus only one area of the company. An ERP, on the other hand, maps the entire business processes of a company and thus helps to optimize them.
What are the benefits of linking Shopify to an ERP system?
As a Shopify merchant, you benefit from the link between Shopify and ERP primarily through valuable workload reduction and time savings. Thanks to the central database, processes are optimized. The uniformity and transparency of information flows leads to error minimization and better work organization. All in all, you can devote more time to your customers and focus on customer relations.
Shopify and ERP- when do I need an ERP program?
ERP software isn't just for corporations these days. Thanks to cloud solutions, small and medium-sized businesses can also build an effective link between Shopify and ERP. An ERP is especially worthwhile if you want to merge individual partial solutions and have a holistic view of your company.