ERP-to-e-commerce integration: Why have separate platforms at all?
Businesses that already use both ERP and e-commerce technologies stand to benefit immensely by integrating them. Cost savings, advanced analytics, personalized customer journeys, omni-channel enablement, and easier development of new digital services are just some of the reasons to integrate. However, decision makers in some organizations might be wondering why their entire digital operations shouldn’t be managed using a single, all-encompassing platform. This would seem like an especially attractive option for companies that have yet to implement either type of digital solution. After all, wouldn’t one platform have a lower total cost of ownership than two? After a bit of digging, I came across a good reason to think twice about this kind of monolithic approach. Recent articles by researchers from MIT Sloan recommend that businesses build their digital strategy around either customer engagement or digitized solutions (Ross, Sebastian, & Beath, 2017; Sebastian et al., 2017). While both outcomes converge (customer engagement drives the development of digitized solutions, while digitized solutions facilitate customer engagement), companies should pursue only one strategy, or they risk losing focus. In their study of “big old companies” (averaging approximately 80,000 employees and 100 years), the authors illustrate how the two main technological requirements for the successful implementation of both digital strategies are a strong and scalable operational backbone and an agile digital services platform. For most organizations, the operational backbone corresponds to ERP and CRM platforms, while the digital services platform corresponds to e-business technologies (e-commerce, SCM, EDI, and so on). While the researchers agree that these two classes of enterprise technology need to be integrated, they also present compelling reasons to use two specialized technologies instead of a single, generic solution. In a nutshell, both components satisfy different, complementary requirements of an organization’s digital strategy. In their words, the operational backbone enables operational excellence, while the digital services platform enables rapid innovation. Both platforms also employ contrasting development strategies, funding models, and primary goals, which makes them difficult to manage as a single system. While ERP platforms aim to standardize and improve visibility of internal business processes, web technologies are better suited to the construction of single-purpose modules that can be mixed, matched, and swapped in and out as needed. ERP systems favor large funding tranches and quarterly or annual updates, web platforms prefer more frequent funding in smaller parcels and continuous development methodologies.