Integrating Magento with your ERP? Follow these 5 best practices

Magento integration with ERP

Marriages, they say, are made in heaven. Yet some work, others don’t. From choosing the right partner with compatible life goals, to dedicating time and energy to the relationship, experts concur that there are definite ways and means to a successful marriage.   

Likewise, integrating your Magento eCommerce platform with your enterprise resource planning (ERP) software is a fabulous idea, provided you do it with the right partner, for the right reasons, and in the right way. This alliance holds the promise of maximizing productivity through workflow automation, improving optimization of logistic and purchasing processes, enabling cost-effective operation, and better customer experiences.

For many online businesses, Magento’s integration with an ERP software like SAP becomes inevitable, as the manual entry of data between the two platforms gets cumbersome with growth. Also, as retailers look to make the most of their brick-and-mortar business as well as online presence, the Magento-ERP alliance becomes vital. Nonetheless, the process can be rather overwhelming. 

Here’s looking at five things to keep in mind before merging your Magento site with your ERP: 

Tell me ‘why’

An increasing number of online businesses today are opting for the integration of Magento eCommerce platform with an ERP system. As a company, you need to be clear about your expectations. What are your key business goals? Do you want to cut costs? Improve customer retention? Improve scalability for future growth? Instead of blindly following the trend, it is better to make informed decisions after proper analyzation of your unique business requirements. 

The first – and the most important – step is to clearly define your eCommerce strategy. Once that is done, you can decide on the type of integration that makes the most sense for your business, and then find the right ERP partner to complement that plan. 

An ERP system can be so much more than an accounting system, an inventory management system, or an order management system. So when it joins forces with an open source e-commerce engine like Magento, which is known for its intuitive UI features and highly effective marketing as well as SEO tools, the results can be extraordinary. 

Work out ‘what’

What data will you incorporate into the ERP? It is a critical business decision that should to be based on the answer to the ‘why’ that we just analyzed. While data pertaining to shipments, inventory, orders, product information, etc., will need to go into the ERP, you will have to take a call on what kind of customer data – contact details, shipping address, buying history, etc – should follow suit.

In most cases, it will be a two-way data stream between Magento and ERP. But what is the primary data source that “owns” and stores the data? It is important to understand what product data is currently organized or will be organized in the Magento structure, as well as the ERP system that is being used. In the absence of this basic understanding, the Magento-ERP integration process can turn into a costly mistake.

Look at ‘when’ 

While the scope and extent of information exchanged is determined by the particulars of the industry, typically the two systems must be able to identify products and exchange key information. Questions about timing and triggering need to be addressed before the integration process begins.

For instance, once an online payment is accepted, the order has to be sent over to the ERP system so that the order tracking number is generated, which can then be swiftly sent to the Magento site, to be included in customer emails. Timing is of essence here.

Explore the third factor

Sometimes, you need a third entity to keep the front-office functions of the web platform separate from the back-office ERP system. Multichannel selling often calls for middleware solutions to help deal with different API connectors and a variety of business rules, that do not always belong exclusively to your Magento or ERP platform. 

From streamlining data workflows to communicating information across ERP and Magento platforms, as well as creating an added layer of security, middleware solutions can play a key role in the integration process. As an enterprise, you need to consider whether there is need for such a solution. 

Of time, money & customizations

How much time and money will your Magento-ERP integration take? Depending on the type of integration (fully automated or semi-manual) and the amount of touch points (one-way points or bi-directional points) the time and cost can vary significantly. Also, many enterprises opt for a step-by-step integration – whereby, say, the products and inventory are added, and later, the order and customers are brought into the process.  

The logistics also change depending on whether you opt for a standard, cost-effective, pre-built connector, or build a custom connection from the ground up. For those who wish to take the middle ground, there is the tailored option of Magento integration. This helps a business leverage the pre-built solution and combine that with the option of tailoring the integration process and its behaviour, according to their rules and requirements. No matter what you choose, it is prudent to have a budget plan and time frame on paper before initiating the integration process.

In the end

One size simply doesn’t fit all. Whether it is the integration methodology, or the kind of data transported between Magento and your ERP, it all boils down to choosing what works best for your business. Integration is a rather complex process that requires considerable planning and onboarding. The key is to understand the e-commerce system elements, including both ERP and Magento, and then make sound business decisions. A lot like marriage, don’t you think?

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