Managing the intricate demands of supplier relationships and sales can be complex.
However, with the implementation of an enterprise resource planning (ERP) system, this complexity transforms into a well-coordinated dance of efficiency.
For retail businesses, a Shopify ERP system enables real-time tracking of stock levels, sales rates, and supplier lead times, empowering accurate and timely decision-making.
In this guide, we will explore the benefits of integrating an ERP system with Shopify, how it can streamline various aspects of your business operations, and the key features to consider when choosing the right ERP solution.
Whether you are a small business looking to optimize your inventory management or a growing enterprise in need of a comprehensive system to handle end-to-end processes, this guide will provide valuable insights and practical tips for leveraging the power of ERP to take your Shopify store to the next level of efficiency and profitability. Let’s dive in!
What is Shopify Enterprise Resource Planning (ERP)?
ERP stands for Enterprise Resource Planning. It is a software system that manages day-to-day business activities in an organization.
ERP integrates various business functions and data into a single system to streamline processes and information across the entire organization. The software collates data from different departments including inventory, order management, accounting, human resources, etc., and ensures smooth information flow between them.
With an ERP system, data needs to be entered only once. It is then available in real-time to various departments through a centralized database. This eliminates silos, automates tasks, and provides organizational efficiency.
Some of the key capabilities of an ERP software system are:
- Integrated system connecting different departments
- Real-time enterprise-wide information
- Automated tasks and workflows
- Standardized processes across the organization
- Shared common data model and practices
- Increased operational efficiency
- Data analytics and business intelligence
- Improved reporting and compliance
- Lower costs and better ROI
How Does ERP Work?
Enterprise resource planning (ERP) software works by centralizing an organization's data and processes into a single, integrated system.
Some common modules found in Shopify ERP integrations include:
- Supply chain management: Manages the flow of goods and services, covering activities from raw material sourcing to final product delivery.
- Inventory management: Tracks stock levels, orders, sales, and deliveries to optimize inventory holding and reduce costs.
- Project management: Facilitates planning, execution, and completion of project-related activities to ensure timely project delivery.
- Human resources: Manages employee information, including payroll, recruitment, and performance reviews.
- Accounting software: Streamlines financial tasks such as accounts payable, accounts receivable, and ledger management.
- Finance: Provides insights into financial performance and supports budgeting, forecasting, and financial reporting.
- Order management: Handles the entire order process, including order creation, inventory checking, fulfillment, and shipping.
- Logistics: Improves planning, implementation, and coordination of storage and transportation of business goods.
- Sales: Assists in managing sales activities, tracking customer interactions, and sales forecasting.
These modules collectively form an integrated system that enables businesses to streamline their operations, enhance efficiency, and make data-driven decisions across various functional areas. This improves communication, productivity, and decision-making.
The choice and customization of modules depend on the specific needs and requirements of each business.
Benefits of Enterprise Resource Planning (ERP)
Implementing an ERP system can provide many benefits for a growing Shopify business. Here are some of the key advantages:
1. Improved productivity and efficiency
An ERP centralizes business processes and provides automation for many tasks. This streamlines workflows and eliminates redundant manual processes. Employees can save time on administrative work and focus on more value-added tasks. ERP also provides real-time visibility into operations which enables better and faster decision making.
2. Better accounting and financial reporting
ERP integrates all financial operations into a unified system. This provides accurate, up-to-date financial data across the business. ERP automates tasks like invoicing and billing and provides easy reporting. This improves financial compliance and closes books faster. Real-time financial insights help identify profitable business areas and improve forecasting.
3. Enhanced customer service
ERP provides a single view of customer interactions across all channels and touchpoints. This gives customer service teams the data they need to better serve customers. ERP also enables self-service options for customers like online order tracking and account management. Automated processes like inventory checks and order status updates improve delivery speed.
4. Better inventory and supply chain management
Shopify ERP gives real-time visibility into inventory and supply chain processes. This lowers stock-outs, prevents overstocking, and improves forecasting. ERP also automates replenishment and streamlines procurement.
Overall inventory costs can be significantly reduced. Advanced ERP systems provide additional supply chain automation and warehouse management capabilities.
5. Increased data visibility and insight
ERP centralizes information from across the business into a single database. This gives leadership access to real-time data analytics and reporting. With a holistic view of the business, managers can better identify areas for improvement or new opportunities for growth and expansion.
Limitations of Enterprise Resource Planning (ERP)
Every coin has two sides. Let’s also take a look at the drawbacks of using a Shopify ERP:
Implementing an ERP system can be very expensive. The software itself can cost millions of dollars, and that's before additional expenses like hardware upgrades, customization services, training, maintenance, and licensing fees. The total cost of ownership over 5-10 years can easily reach into the tens of millions for large enterprises.
Ongoing maintenance and operation costs are also considerable. ERP systems require dedicated IT staff to manage the infrastructure and perform troubleshooting and upgrades. Vendor technical support fees can also be substantial.
3. Initial complexity
Customizing and integrating an ERP solution to suit the specific needs of your business can be a complex endeavor. It typically involves aligning the ERP system with existing business processes and legacy systems, which can be time-consuming and technically challenging.
In many cases, integrating the ERP system with other software solutions used by different business units becomes necessary to ensure seamless access to unified data across all departments. This adds extra steps to the setup process.
Moreover, as business operations evolve, the ERP system may need further modifications to keep up with new requirements. If the complexity of using the ERP system becomes overwhelming, employees may prefer to rely on their familiar old systems.
4. Learning curve
There is a significant learning curve when adopting ERP software. Employees at all levels require extensive training to use the system properly. This training represents both a major time and monetary investment. Additionally, people are often resistant to change and reluctant to use new systems, which can hinder adoption.
Integration with other business systems can be challenging. ERPs may not work seamlessly with other proprietary or legacy systems, requiring expensive custom programming. This system's integration process can be complex and time-consuming.
6. High dependency
Once an ERP is in place, it can be difficult to switch providers. The business becomes reliant on that particular vendor and software environment. This "vendor lock-in" reduces flexibility and negotiating leverage with the ERP vendor.
Best Shopify ERP Systems
Here’s a comprehensive list of some of the best Shopify ERP solutions available in the market.
Salesforce is one of the most popular and powerful CRM and ERP solutions available. It offers robust inventory management, order processing, accounting, reporting, and omnichannel sales capabilities.
Some key features of Salesforce for Shopify users include:
- Seamless integration with Shopify via apps like Commerce Sync and Commerce Cloud
- Automated syncing of customers, orders, inventory, and more between systems
- Advanced sales force automation and CRM capabilities
- Robust analytics and custom reporting
- Scalable omnichannel order management
- Inventory and order management automation
ERPNext is an open-source ERP system designed for small and medium businesses. It integrates well with Shopify to manage back-office operations and inventory.
Some key highlights include:
- Free and open source system to minimize costs
- Built-in integration with Shopify via apps
- Inventory, accounting, HR, CRM, procurement and more
- Role-based access control and permissions
- Custom reporting and analytics features
- Scales from small to large businesses
Odoo is a full suite open source ERP solution ideal for Shopify merchants.
It offers strong back-office capabilities like:
- Free open-source ERP system
- 250+ apps covering all business needs
- Built-in Shopify integration via Odoo API
- Inventory management with warehouse management capabilities
- Accounting, billing, HR, CRM, and more
- Customizable reporting
- Mobile app available
- Scales from startups to enterprises
Netsuite is a robust and comprehensive ERP system that offers businesses a wide range of tools to manage their operations seamlessly.
Its key features include:
- Real-time inventory management for accurate tracking of stock levels
- Automatic syncing of Shopify data for seamless integration
- Advanced financial management tools such as invoicing, billing, and tax management to streamline financial processes
SAP is a leading provider of ERP software known for its scalability and functionality.
Some key features of SAP include:
- Efficient order management for seamless processing of orders
- Real-time synchronization of sales, inventory, and customer data with Shopify integration
- Advanced analytics and reporting capabilities for data-driven decision-making
6. Microsoft Dynamics
Microsoft Dynamics is a versatile ERP system that integrates effectively with Shopify. Key features of Microsoft Dynamics include:
- Real-time syncing of sales, inventory, and customer data
- Streamlined order fulfillment and shipment tracking
- Robust CRM capabilities for effective customer relationship management
7. Sage ERP
Sage ERP is a flexible and scalable solution known for its seamless integration with Shopify. Some key features of Sage ERP include:
- Real-time syncing of data for accurate and up-to-date information
- Comprehensive inventory management tools for effective tracking of stock levels
- Advanced warehousing and fulfillment capabilities
Epicor is an ERP system that provides businesses with advanced supply chain and inventory management solutions.
Key features of Epicor include:
- Advanced procurement and order fulfillment processes for efficient supply chain management
- Real-time analytics and reporting for valuable business insights
- Advanced manufacturing capabilities for businesses involved in production and assembly operations
9. Blue Cherry
Blue Cherry is an industry-specific ERP solution designed for the fashion and apparel industry.
Some key features of Blue Cherry include:
- Comprehensive product lifecycle management tailored to the fashion industry
- Advanced inventory tracking and order management capabilities optimized for fashion businesses
- Streamlined operations specific to the fashion and apparel industry
HubSpot can be integrated as an ERP solution for Shopify stores, providing a comprehensive and streamlined approach to managing various aspects of your business operations.
With its powerful features and seamless integration capabilities, HubSpot offers a robust ERP solution that helps businesses optimize efficiency and maximize growth.
Key features of HubSpot ERP integration with Shopify include:
- Inventory management for real-time tracking and optimization of stock levels
- Order management for efficient order processing, fulfillment, and shipping
- Customer Relationship Management (CRM) to store and manage customer data
- Sales and marketing automation for lead generation, nurturing, and conversion
- Financial management with accounting functionalities like accounts payable and receivable
- Analytics and reporting for valuable insights into business performance
- Seamless integrations with other platforms for data synchronization
- Enables operational excellence, enhanced customer experiences, and business growth
Implementing an Enterprise Resource Planning (ERP) system can provide numerous benefits for Shopify merchants looking to scale their operations. By integrating critical business systems and automating processes, ERP enhances visibility and control across the organization.
The right ERP platform can be transformative for your Shopify business.
To determine the best solution for your unique requirements, contact our Shopify experts today. We can guide you through selecting, implementing, and getting the most value out of an ERP system optimized for your Shopify operations.