When you need an ERP system and when you don’t
The retail industry’s needs are changing all the time, and as such, solutions are always evolving as well. When new or small businesses outgrow their solutions and their current tools begin holding them back from achieving their growth potential, they often start looking for ERP systems that can help streamline operations.
In a traditional business sense, ERPs are excellent tools to help manage customer relationships, accounting operations, manufacturing initiatives and other tasks. The problem, however, is that the needs of a number of merchants have grown beyond what traditional ERPs offer retailers. This can result in some issues for sellers – they think they are finding a solution to their problems, when it only actually addresses a portion of their issues.
In a recent blog post, David Anderson, Vice President of Marketing at SalesWarp, addressed the confusion around why retailers search for “ERP” when trying to solve operational needs.
When do retailers need a traditional ERP?
Traditional ERPs are still incredibly valuable for many merchants, and there are numerous cases in which an ERP system may be the optimal solution that will satisfy retailers’ needs.
For example, some retailers manufacture the items they sell online – perhaps because they saw an opportunity to improve margins by selling direct to consumer. Regardless of why they do so, an ERP system can play a pivotal role in helping retailers track raw goods and materials throughout the supply chain and manage the production process. ERPs are also strong accounting and financial tools and can be a major benefit in this instance.
Customer relationship management is another area in which many retailers can utilize ERP systems. An ERP tool will help streamline many of the processes associated with customer service, allowing retailers to reduce expenses and cut costs along the way. Many companies across a variety of industries use ERPs for CRM purposes, and retail is no different in that regard.
When are ERPs not the way to go?
That being said, an ERP solution is not always the solution that merchants need. In fact, a traditional ERP solution is often not equipped to deal with the specific needs of online sellers, which can leave retailers scrambling to make due after they implement their ERP system.
For instance, many ERP solutions do not aid merchants in their efforts to improve their omnichannel selling initiatives. Most ERP systems are not designed to consolidate and manage online and offline retail channels. Additionally, many ERPs are legacy solutions, so modifying these systems or trying to integrate them with newer solutions can be a huge money and time sink for retailers, or not even possible.
As retailers consider their ERP options, the first thing they need to look at is what they actually want to accomplish with this software. Are they looking for tools to help them manage their resources and finances, or are they looking for tools that will allow them to coordinate cross-channel operations? At the end of the day, an ERP solution with specific eCommerce and omnichannel functionality may be the way to go.