When does it make sense to switch from a CMS vs ERP for e-commerce businesses? Here’s a review of both types of systems, and how far you can go with each.
Software to run an online store comes in several sizes and types.
Depending on the type and size of your business, there are countless digital tools available on the market designed to streamline your business operations and help you grow revenues. This wide range of products falls into three major categories:
• CRM (Customer Relationship Management) A CRM is a customer database tool used most often by sales and marketing teams to keep tabs on relations with new and existing accounts, tag prospective customers, and analyze customer behaviors. SalesForce, Hubspot and ZenDesk are a few examples.
• CMS (Content Management Systems) Usually through a simple web interface, the CMS allows you (without a developer’s help) to add, update and delete the content on your website in a safe and secure fashion. Examples include WordPress, Joomla, and Drupal. Most e-tailers are familiar with Magento as one of the most popular CMS platforms for e-commerce.
• ERP (Enterprise Resource Planning) ERP is the business-wide management software that pulls everything together: operations, planning, manufacturing/importing processes, inventory management, shipping, sales, payroll, accounting, HR and more. Some of the best-known ERP software companies are Oracle, SAP and NetSuite.
For e-commerce enterprises, we will focus mostly on the last two from the standpoint of when it makes the most sense to step up from a CMS to an ERP system to handle your main selling operations.
Content Management Systems (CMS)
When starting out and in the early growth stages, almost all business owners choose to go with a CMS. They’re less expensive than ERPs, and they can be scaled and supplemented with additional tools tools like fulfillment programs, employee portals, and file management systems as needed. Until you have more than a few dozen employees, some call centers and one or more exclusive fulfillment centers, a CMS is usually enough.
Rather than requiring your web developer to make every change, a CMS puts the power to maintain your website’s content in your own hands. CMS’s come in all shapes and sizes: from the very popular, free (and hack-prone) WordPress, to enterprise-level systems like SiteCore. No one size fits all but generally the more features you get, the more you pay.
The key features of a CMS include:
- Custom domain names: Create a custom domain for your company
- Web hosting: Choose to store your website and all of its data either in the CMS or by integrating with a popular web hosting platform such as AWS.
- Site editor: Change the layout of your site, either using code or a drag-and-drop editor.
- Content library: Store content for publication including images and videos.
- Online store: Set up a catalogue of products and integrate a payment portal so users can shop online via your website.
One key consideration while implementing a CMS is whether or not your site is mobile-friendly (if you’re using a pre-built template, most come with mobile responsive design). As Google continues to stress the importance of mobile friendly sites when considering how to rank a website, you’ll want to make sure that your site is mobile-optimized to avoid losing out on traffic.
When your CMS begins to show weaknesses, that’s when it’s time to start comparing options.
The team responsible for making updates to your website surely has an opinion about the CMS. They may find it difficult to navigate, or they may now be so familiar with the tool, that a change would be unwelcome. Chances are your developer has one or more favorites and can explain the pros and cons of each.
For small customer requirements, most CMS add-on options are solid. However, as your company starts to require more complex pages or web applications, their efficiency decreases. Often, companies will resort to having their developers build them a customized CMS, which then starts to run costs to a level where you may want to comparison shop this option against the cost of an entry level ERP.
Enterprise Resource Planning (ERP) Systems
ERP is the big one. The main benefit of having this Big Kahuna is efficiency. ERP should allow your business to make more informed decisions, reduce the number of errors, and enhance transparency throughout the organization.
If your website is traditional, it’s possible that your ERP and website can each stand alone. On the other hand, if you have an eCommerce business – integration is key. Sure, you can manually enter online sales into your ERP or another back end system after the fact. But leveraging your ERP’s Application Programming Interface (API) is really the way to go. This allows orders and inventory to pass seamlessly between the systems. With an ERP, you can also add apps with all the main features of a CRM.
The ERP system is composed of several small modules and is designed to manage the entire enterprise. Any one of the smaller modules can replace a system for file storage, accounting, finance, supply management, or CRM. All these modules are connected to a single database, but independent of each other. They do not require the other modules to be able to function. Sales has their own modules; Accounting has theirs. Typically, these are desktop applications connected to the internal network of the company.
ERP system has more space for raw product data, more like a PIM, and can store product tag-based SEO (though SEO management isn’t included). By contrast, a CRM doesn’t usually feature any SEO specified fields, even if that’s already included in your product data. So in essence, an ERP system allows that many more shoppers to find what they need from your store via general search queries.
Final considerations on CMS vs. ERP for e-commerce
It’s possible that you have everything you need, more than you need, or that the tools you have just aren’t sized for your business needs. If you’re dealing with a patchwork of plug-ins that aren’t scaling the way you need them to, try adding up both the actual and hidden costs.
Don’t forget to consider the costs for digital subscriptions that may be eliminated by a custom-built CMS solution or an off-the shelf ERP solution. Either of those will give you better overall visibility into operations and help you track data in a way that’s better aligned with your KPIs, so you know in a timely way if you’re hitting your targets.
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