According to a study conducted by Software Path, a software review site, most buyers looking for business software are interested in the following items:
- Finding software that increases efficiency (29.46%)
- Getting information on total cost (20.82%)
- Comparison-shopping options (20.7%)
These reasons are important for the bottom line, but before you make any investments or even start shopping around, you should clearly verify what you need software tools to do for your business.
In other words, consider the value that software development investments provide for your company. If you’re not getting value, then why are you investing?
For ecommerce leaders, you’re often buying new software for employees, customers, or both. In either situation, ask yourself the following:
What value will your users get by leveraging this improved software?
True, it can be difficult to quantify value in relation to software usage. Let’s think about this from an employee perspective to better understand the value.
Consider the number of high-value team members you have doing repetitive, low-value tasks for the bulk of their day. No doubt, you have people wasting at least 25-50% of their day on tasks that could be automated or streamlined.
For your business and your employee users to see real value in new software purchases, you would be wise to choose tools that significantly reduce the time spent on these menial tasks. Not only will such software investments make employees feel more productive and avoid stress-related burnout, but doing so also increases overall productivity for the business.
Research shows that making software development investment decisions with your users in mind improves software adoption, which further justifies the investment. Of course, for leaders to make sound investment decisions on software tools that users will support, leaders must first understand the following:
- How users currently leverage different tools and platforms
- Options for software development upgrades
- Where and when to invest in new software
As this article is part of an ongoing series for ERP ecommerce investment strategies, the rest of this piece will focus on the employee side of software investment decision-making. That said, the key points can still be applied to other software investment decisions.
For additional background on maximizing your ROI with ERP ecommerce software investments, or any software investments, we highly recommend you refer to this article.
How Do Your Team Members Use ERP Ecommerce Platforms?
In a nutshell, your ERP and ecommerce platforms contribute to bringing in revenue. But that doesn’t mean that they are used the same way.
An ERP (enterprise resource planning) platform manages your company on the backend. Particularly, it focuses on finances, accounting, inventory management, order fulfillment, vendor management, product management, and logistics.
This is the information different departments in your business use to make sure orders go out, money comes in, reports run, and any consumables are ordered to keep the business going.
In contrast, your ecommerce platform is your marketing engine. For the most part, it’s customer-facing and filled with information designed to attract and convert prospects into buyers. This can include but is not limited to your website, digital shopping cart, catalogs, blogs, emails, and social media.
The team members using your ERP are focused on numbers, running reports, and keeping the business moving from day to day. Marketing and salespeople working in your ecommerce platform are trying to sell products by experimenting with messaging, creating new images, and gathering market research about potential buyers.
These are two distinctly different groups of people with unique priorities for their specific duties. Yet they’re all trying to do what they can to keep revenue and productivity high.
For these two teams to succeed with their individual goals, leaders must provide the best tools possible for each group to accomplish their tasks. Likewise, leaders have to balance those tool choices so that neither platform blocks the other from being productive.
Best-in-Class vs All-In-One Solutions for ERP Ecommerce Platforms
To best serve your ERP number-crunchers and your ecommerce platform marketers, leaders may wonder whether they should purchase best-in-class software or an all-in-one solution.
Best-in-class software includes any top-performing solution designed specifically for users who need to accomplish designated and sometimes highly complex tasks.
All-in-one software solutions provide features and tools for multiple departments to use while all users work inside one software solution platform
Either of these solution options may work for your business needs, but you should understand the pros and cons before deciding.
Another consideration for choosing between these options includes determining whether you have traditional or unique business processes.
If you have not done so already, work with your team members who directly interact with your ERP and ecommerce platforms to map out every business process from start to finish. Your map does not have to be perfect at this stage, but you at least need enough detail to figure out what type of software capabilities you will need to run those processes.
For more traditional business processes, purchasing an out-of-the-box solution can work well whether you want to invest in a specific best-in-class option or go with an all-in-one. Such premade solutions are designed to fit the masses and accomplish common business tasks.
If you have distinctly unique business processes, out-of-the-box solution vendors may be unable to provide the required services. In that case, you would need to work with a custom software development company. If a custom software solution will provide a better fit, then you are most likely leaning toward individual solutions for specific department needs (best-in-class options) and not an all-in-one option.
What Happens When You Invest Too Much or Too Little into Either Platform?
As pointed out above, your ERP manages most of the backend processes while your ecommerce brings in and converts potential buyers. You need both of these systems functioning at optimal levels to consistently operate and bring in revenue, but it’s not uncommon for businesses to invest more in one platform than the other.
If leadership is metrics and reports oriented, they often relate more to the ERP side of the world and may invest more in that platform. Technically, it may not be a bad thing to invest in your ERP, presuming you have ERP problems or require upgrades.
For instance, if your company has not updated your ERP in more than five years, then some changes would make sense, such as the following:
- Adding in new modules to keep up with changing technologies
- Performing a ‘lift-and-shift’ to migrate to a cloud-based platform
- Updating & streamlining your ERP business processes
Recognize that anytime you change or update your ERP, it can slow down other business processes. After all, your ERP is the backend backbone of your business. It manages order fulfillment, logistics, and financial workflows that keep your lights on and the revenue coming in.
It’s not that you should avoid ERP changes altogether, especially if you need them, but just be aware of what you’re getting into when you make those updates.
Conversely, if your leadership team is sales-oriented, they may be more likely to put the bulk of the budget into your ecommerce platform. Again, it’s not necessarily detrimental to the business to be sales-focused, provided you can make good on your promises.
For example, if your company started running marketing campaigns that promised next-day delivery on all orders no matter what, then you would need to have your logistics and order fulfillment teams ready to go to make good on that promise.
In other words, the integrations between your ecommerce system and ERP platform would need to be optimized to take orders efficiently and provide deliveries within the promised time frame.
If the integrations between your ecommerce system and ERP platform have not been optimized, or are non-existent, any dreams you have of next-day delivery will most likely be cut short. Additionally, your inability to deliver on marketing promises could result in angry customers, a drop in repeat business, and a loss of trust in the brand.
How to Decide Which Platform Needs More Software Development Investments?
After reading both extreme scenarios of investing too much or too little into your ERP or ecommerce platforms, it’s not wise to use a one-sided investment strategy. Both your ERP and your ecommerce platforms contribute to the ecosystem of your business, so both need your attention and support.
Figuring out how much to invest in two very different systems starts with answering the following business-critical questions:
- Which overall business problems are impeding you the most?
- Will improving your ERP solve those problems directly?
- Will improving your ecommerce platform solve those problems directly?
- Is the value of solving those problems worth any business slowdowns?
The answers to these questions can give you a better idea of structuring and prioritizing investment plans in your ERP and ecommerce platforms. The answers can also identify other areas of the business that may need attention first.
However, if you don’t have enough information to answer these questions with confidence, you’ll need to take a step back and conduct a formal assessment.
During this assessment process, figure out the root of your problems, identify the bottlenecks, and make note of other consistent problems plaguing your business. To find any problems within your ERP and ecommerce platforms, you may want to think in terms of what business processes inhibit you from reaching goals and meeting KPIs.
For instance, common KPIs to consider for your ERP and ecommerce platforms include:
Besides just looking at business goals and KPIs, don’t forget to consider user feedback. After all, your employees are in your ERP and ecommerce systems daily. They know better than anyone what could be blocking productivity, so their insights are invaluable. Furthermore, by inviting them into the problem-solving process, they feel more validated, which often can make them more willing to support new software solutions.
Discover Other ERP and Ecommerce Investment Strategies Today
This article is part of an ongoing series about key investment strategies related to ERP and ecommerce business solutions. To avoid missing out, visit our resources page and read other already-published articles.
By the way, we will be publishing an ERP and Ecommerce Investment Strategies ebook shortly, so keep an eye on our resources page for that announcement.