The Art of Commerce

The Increasing Role of ERP in Customer Experience and B2B E-Commerce

 

This is a guest post by Justin King. Justin is a commerce adviser and strategist at BoxCar Interactive as well as the founder and chief evangelist at eCommerce & B2B

When most people in the e-commerce industry discuss the digital B2B buyer, they often talk about the consumerization of B2B. Consumerization of B2B means that your buyers bring expectations to your site because they have been conditioned in their home buying experiences. That conditioning creates expectations that you need to meet in the online customer experience.Read more...

Consumerization is a big deal. But maybe not the biggest.

In most B2B businesses, there exists tremendous complexity. There are complex ordering processes; complex products with complex attributes; and finally elaborate back-end systems with their own complexity. So, while companies want to create a “consumer-like experience in B2B”, they must do that in the context of the inherent complexity that exists.

The Increasing Role of the ERP System

Of all the backend systems, the complexity of the ERP system is one of the key differences between B2B e-commerce and B2C e-commerce. The ERP is the lifeblood of many B2B organizations. The reality is that B2B companies have to focus a tremendous amount of resources on integrating the ERP to plug into that lifeblood. Think about this:

  • Integrating to the ERP system(s) will most likely be one of the biggest initial and ongoing costs in a company's B2B e-commerce project.
  • Most B2B companies have more than one ERP system because of multiple acquisitions and the time and cost involved in consolidating into a single ERP.
  • Many of the B2B features that exist on websites today are really just about making ERP functions customer facing.

It is natural then to ask, "With all of that complexity, you see the role of the ERP system increasing?"

Yes.

ERP: The Foundation of a Great Customer Experience

In an article by Manufacturing Business Technology magazine, results of a survey describe the significant role of the ERP system in the Customer Experience.

The ERP has a significant role in streamlining interactions with suppliers and customers:

  • Nearly 40 percent of all Industrial Machinery and Equipment (IME) manufacturers surveyed believe the ERP is as vital as the platform that connects the back office and front office
  • Nearly 85 percent of large IME organizations with 5,000 employees or more indicated that their ERP is a vital platform for delivering a good customer experience
  • IME manufacturers have come to realize that providing superior customer experience has to be one of their top initiatives

To improve the Front Office (customer experience), you must consider the Back Office (ERP).

When you think about it, most B2B e-commerce sites are simply about exposing specific functions of their ERP system to customers.

Take for example the shopping cart. By providing an online shopping cart, the online buyer controls order-entry instead of an inside salesperson keying the order into the ERP. By providing online pricing based on the terms and conditions of the contract, pricing moves from the ERP system to the online buyer.

The Customer-Facing ERP

Consider these B2B best practices: providing order status, inventory availability by location, ATP (available to promise), taking payments, and even the online catalog. All of these best practices are about giving B2B buyers more transparency into the back office. Previously, product content was housed only in marketing catalogs and cryptic codes in the ERP; now there is customer-facing product content.

This transparency started very basic, but take a look at the backlog of change requests for your e-commerce site. Are there any patterns related to your ERP? We don't think that is going to stop. If the secret of B2B e-commerce is about helping B2B buyers do their job easier, then that means giving them more and more access to complete self service. That equates to more transparency into the ERP—the new Customer-Facing ERP.

Additional Reading

I would also suggest reading Zach Hanlon's article on this same subject in Manufacturing Business Technology Magazine. At a higher level, there is also a great series on growing B2B e-commerce that just kicked off:  The 9 Levers You Can Pull to Grow Your B2B E-Commerce Business - Part 1

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