B2B ERP Integration Explained

B2B ERP Integration - B2BWoo

In today’s interconnected business landscape, efficiency reigns supreme. Businesses handle multiple systems – CRM, accounting, inventory management – each holding vital data. But what if this data gets stuck in separate places, it’s hard for them to talk to each other and slows down important processes. Here B2B ERP integration helps like the last missing puzzle piece that opens up a lot of new options for organizations striving to optimize their operations and stay competitive.

However, it is also important to win over B2B customers in the current landscape means understanding their requirements and making purchases of those products and services easy. If your website says something is available, people expect it to be really in stock. But even the largest companies sometimes have trouble making sure things are in stock when they say they are. This is why numerous B2B companies are setting out on enterprise resource planning (ERP) systems.

In a recent survey conducted by Deloitte Digital, which encompassed 530 B2B organizations, it was revealed that approximately 13% of lost sales were attributed to the lack of effective digital commerce solutions. It also found that businesses that provided a consistent digital experience across various channels, facilitated by ERP e-commerce integration, reported a significant 62% surge in sales of both products and services.

This shows how B2B ERP integration is holding the key to streamlining operations, fostering collaboration, and driving sustainable growth. In this blog, we’ll delve into the significance of B2B ERP integration and explore its myriad benefits for modern enterprises.

What is B2B ERP Integration?

By definition, B2B ERP Integration refers to the process of connecting and synchronizing Enterprise Resource Planning (ERP) systems between different businesses in a B2B context. In simpler terms, it’s about linking the internal software systems (ERP) used by one company with those of its business partners, suppliers, or customers.

Imagine you have a big box where you keep all the important information about your business, like how much stuff you have in stock, how much money you’re making, and who works for you. That big box is called an ERP system, which stands for Enterprise Resource Planning.

Now, think about when you need to work with other businesses to buy or sell things. You exchange information like orders, invoices, and product details. B2B (Business-to-Business) ERP integration is like connecting your big box of information with the big boxes of other businesses. This connection allows all the information to flow smoothly between your business and theirs.

So, instead of manually entering data or sending emails back and forth, everything happens automatically. Orders are processed faster, invoices are sent promptly, and you always know how much stock you have or when to expect deliveries.

B2B ERP integration is like having a secret tunnel between your business and other businesses, making it easier and faster to work together and get things done. With Enterprise Resource Planning (ERP) software, you can successfully engineer a system that maintains efficiency as your business expands.

B2B integration involves connecting disparate systems, applications, and processes between different business entities, enabling seamless data exchange and collaboration. ERP serves as the central technology that links and manages the essential operations of your B2B enterprise, covering areas like accounting, finance, inventory management, order fulfillment, supply chain, reporting, material management, customer and product data, and more. According to Gartner’s forecast, 65% of organizations were expected to adopt AI-integrated ERP systems by 2024.

In centralizing and sharing data across systems, teams can access and view real-time information, streamlining operations and fostering collaboration. This leads to improved accuracy and efficiency, benefiting both customers and team members. However, successful integration enhances your business convenience, speed, and personalization to meet customer demands. It also provides access to robust data, boosts productivity, and establishes a single source of truth for information.

Important B2B E-commerce ERP Integration Features

1. Holistic Inventory Management

  • Track inventory and orders with ERP software to handle stock fluctuations and backorders.
  • Sync ERP and e-commerce platforms for up-to-date payment and shipment info, ensuring accurate inventory reporting.

2. Unified Data and Processes

  • Integrate disparate systems to improve data visibility and streamline workflows.
  • Enhance sales and marketing reports by synchronizing information across channels.

3. Streamlined Business Processes

  • Simplify complex B2B order workflows, including invoicing, contracts, and approvals.
  • Provide an omnichannel, self-service experience for customers with easy order management and shipment tracking.
  • Build trust with customers through positive interactions and maintain flexibility for growth and new opportunities.

4. Revenue Capture Optimization

  • Automate order processing and financial management to reduce errors and increase efficiency.
  • Transfer customer orders from e-commerce to ERP for inventory allocation, fulfillment, and accurate financial reporting.
  • Spend less time on system maintenance and invest in lead generation, brand building, and enhancing user experience to boost sales and revenue.

Top Ways for Integrating your B2B E-commerce and ERP platforms

Connecting your ERP and B2B e-commerce platforms seems simple until it gets complicated. The process of integrating these systems can quickly become challenging once you embark on it—and often, the initial hurdle lies in selecting the optimal method for connecting them.

A common viewpoint of many people is that ERP integrations primarily rely on an API layer. As most of the time APIs facilitate real-time data sharing between two platforms, so the discussion for many companies usually means using an ERP with an API.

However, some unique cases could steer you in a different direction. To assist you in choosing the best option for your business, here are three of the most popular ways to integrate your B2B e-commerce platform with your ERP.

1. API-driven Data Synchronization

Modern development teams heavily rely on APIs, and rightfully so. The API of your ERP system provides developers with a standardized method for other applications to communicate with it. This simplifies the extraction of data from your ERP, enabling its real-time utilization across your e-commerce platform.

Usually, API-driven integrations between your ERP and B2B e-commerce platform operate on a one- or two-way basis:

In one-way integrations, information moves from your e-commerce platform to your ERP. For instance, you could arrange for order details to be sent automatically from your e-commerce platform to your ERP. Alternatively, you might choose to transmit inventory updates from your ERP to your e-commerce platform. Utilizing the API method, data is seamlessly transmitted between the application and the e-commerce environment, eliminating the necessity for data reconciliation.

Two-way integrations connect both systems, facilitating mutual exchange of information. If a modification is made in your e-commerce system, it will be automatically reflected in your ERP, and vice versa.

2. Planned Data Synchronization

As mentioned earlier, there are several reasons why a real-time ERP integration might not be the best choice for every business. While larger enterprises frequently deal with constantly changing accounting and warehouse management data, some B2B companies prefer to synchronize data between their ERP and e-commerce platforms on a regularly scheduled basis, rather than in real-time.

These scheduled data synchronizations are typically not utilized for updating inventory and pricing data; tasks that even newer retailers often manage through real-time data synchronization. However, B2B organizations with limited internal development resources may opt to schedule certain activities, such as updates to product descriptions. They have two options for doing so, both capable of handling large data transfers quickly, yet with some notable differences:

  • SFTP, or Secure File Transfer Protocol server – offers development teams enhanced file transferring or receiving protection features, providing reassurance during each data synchronization process. These features include encryption, public key authentication, and host authentication.
  • API data synchronizations – are renowned for providing businesses with the latest data across all connected platforms. APIs grant development teams improved data visibility and flexibility to devise customized actions and workflows.

3. Manual Data Synchronization

While many B2B businesses prefer real-time or scheduled integration between their ERP and e-commerce platforms, some organizations seeking to optimize resources may choose to synchronize data across both platforms by uploading CSV files containing essential information.

Businesses with smaller datasets that do not require frequent updates often opt for manual “integrations” between their ERP and e-commerce platforms. However, as their business expands, they typically consider more automated integrations. Manual uploads lack scalability and may eventually necessitate hiring a dedicated individual to manage the integration. Furthermore, manual integrations heighten the risk of security breaches and data integrity issues, potentially leading to significant and avoidable impacts on the end-user experience.

How ERP Integration Benefits B2B E-commerce

The emergence of e-commerce has revolutionized both customer interactions and business operations. Customers now demand enhanced features, improved performance, and a seamless purchasing journey, while businesses aim to boost profits and foster customer loyalty. Meeting and surpassing these expectations is crucial.

Thankfully, integrated e-commerce presents a clear solution to this challenge. By harnessing the business logic, client information, and product data within your Microsoft or SAP ERP system, you can transform the sophisticated capabilities you’ve longed to offer in your online store into reality. Integrating the real-time ERP data you already possess enables you to power a feature-rich, data-driven web store. It’s as straightforward as that.

The Benefits

ERPs are now considered a primary focus for B2B organizations regardless of their size or industry. According to a recent study conducted by TechTarget and ComputerWeekly, 26% of participants identified ERPs as one of their key software investment priorities for 2023. Predictably, Acumen Research forecasts substantial growth in the global ERP market, expecting it to surge from $53 billion to more than $137 billion by 2032.

1.  Real-time Data

The significance of accessing real-time data has never been more important for B2B enterprises, especially as many strive to establish the omnichannel e-commerce experiences their customers desire. Leaders in various industries unanimously agree that seamless integration of everything is the cornerstone of success in today’s omnichannel B2B environment.

Here, by integrating your B2B e-commerce platform with your ERP, you gain unparalleled access to real-time data crucial for addressing crises like surges in product demand, checkout issues, and order management glitches. This consolidation of platforms accelerates data gathering and minimizes the likelihood of inconsistencies among separate systems. Additionally, ERP integration empowers teams across your organization to tap into vital data informing areas such as marketing strategies or campaigns and quarterly sales forecasts.

2.  Making Customer Convenient

Today’s online shoppers have higher expectations these days. Businesses are now offering ways that encourage both retail dealers and B2B businesses to develop omnichannel experiences that allow customers to complete purchases on any device of their choice. While this flexibility benefits buyers immensely, it poses challenges for organizations in maintaining data accuracy.

Here, integrating your ERP with your e-commerce platform enables you to provide a consistent experience to customers across all channels, ensuring smooth service delivery regardless of the platform they use to shop with you.

3.  Data Precision and Management

B2B enterprises utilize highly advanced business software, yet the quality of available data often falls short of expectations. Without reliable data from all connected systems, a B2B business cannot accurately determine stock levels or inventory surplus. One system might indicate a seamless checkout experience, while another demands an update. Regardless, comparing data from unconnected systems is a surefire way to disrupt your plans.

Here, integrating your ERP and e-commerce systems grants you greater control over data flow between them. When inventory numbers are updated in your ERP, the changes are reflected on your e-commerce site. This integration guarantees that all data exchanged between the two systems remains accurate and current.

4.  Minimize Operating Expenses

We already discussed some manual methods for syncing data between your ERP and e-commerce systems. While these methods are feasible, they’re also laborious and costly. Manual data syncing is prone to errors and security risks, necessitating internal resources for management. Scaling manual integrations may require dedicating multiple personnel to tasks like CSV uploads and data input. Although integrating your ERP and B2B e-commerce platform might seem like a significant project, it pales in comparison to the expenses associated with manual “connections.”

Challenges of integrating an ERP with your E-commerce Platform

Integrating an Enterprise Resource Planning (ERP) system with your e-commerce platform can unlock a wealth of benefits, but it’s not without its challenges. Here are some that you should be alert of when you connect your ERP to your e-commerce platform.

1. Data synchronization issues

Data synchronization across multiple platforms is no walk in the park, and any competent engineer knows it. Achieving accuracy and speed demands extensive testing to ensure the connection between your platforms runs smoothly. Even with meticulous testing, something as minor as a weak internet connection or a single misconfiguration could disrupt the entire synchronization process.

Several challenges may hinder the connection between your B2B e-commerce platform and ERP. Common data synchronization errors, such as missing data or incorrect formatting, can pose significant hurdles. Additionally, changes in data structures and API updates across your organization may necessitate reconfiguring the integration between your B2B e-commerce platform and ERP.

2. Integration with legacy systems

Outdated systems may lack the necessary features for real-time data synchronization and automated workflows, making it challenging to handle large transaction volumes efficiently. This deficiency often requires costly and time-consuming customization efforts. Differences in data formats or structures between legacy and modern systems necessitate cleansing and reformatting during mapping and transformation processes.

Moreover, if the legacy system is outdated or no longer supported by the original vendor, there may be insufficient technical support, resources, or familiarity with the software. This can hinder stability, security, maintenance, and compatibility with new technologies. Legacy systems are deeply ingrained within organizations, leading to resistance and hesitance to invest in modern software solutions.

To overcome these challenges, carefully assess the legacy system’s capabilities against integration requirements and consider potential solutions such as custom code or middleware to bridge the gap.

3. Evolving compliance and security demands

As e-commerce evolves, so do the complexities of meeting expanding security regulations for B2B organizations. Five new regulatory demands that many B2B businesses must be vigilant about:

1. Mandates for Cybersecurity Risk Management, Strategy, Governance, and    Incident Disclosure for Public Companies

2. Cybersecurity Maturity Model Certification (CMMC) 2.0

3. Executive Order 13984

4. American Data Privacy and Protection Act (ADPPA).

5. California Consumer Privacy Act (CPRA)

Comprehending and ensuring compliance with these requirements is challenging for any security team. Moreover, they influence how customer data can be utilized across your ERP and B2B e-commerce platform, and more critically, how data is shared between the two platforms. Prepare to implement significant modifications to your data flows, synchronization schedule, and data collection practices whenever new security regulations are on the horizon.

4. Data accuracy after migration

After confirming the communication between your ERP and B2B e-commerce platforms, the next crucial step is assessing the accuracy of data exchange between these systems. Even the most carefully planned integrations are susceptible to complexities or dependencies. A single incompatible format in a field can lead to widespread misinterpretation during data synchronization.

Failed data synchronization can have significant financial implications. Inaccurate data contributed to approximately $3 trillion in losses for U.S. businesses last year. Additionally, 40% of business goals fail due to inaccuracies, resulting in further revenue loss.

To mitigate such losses, development teams must prioritize proactive measures like data cleansing and reconciliation procedures to address data quality issues. Equally important is the implementation of validation steps and transformation rules to prevent the transfer of flawed or duplicate data between ERP and B2B e-commerce systems.

Conclusion: The Future is Integrated

When selecting your next B2B e-commerce solution, prioritizing ERP integration is essential for scalability and optimization. B2B ERP integration emerges as a strategic imperative for organizations seeking to stay competitive and agile.

While expanding your online business is promising for profitability, it can strain operations, slow down performance, and lead to a poor customer experience. Nonetheless, an integrated system consolidates data, automates processes, minimizes errors, streamlines sales, reduces costs for your e-commerce business, and positions you competitively in the evolving landscape of online retail.

Khizra Khan is an experienced SEO and technical writer, specializing in e-commerce. Passionate about startups and technology, aiming to make complex technical concepts accessible to all. Her engaging writing style and deep research skills make her a go-to expert in digital innovation.