ERP

What an ERP is

ERP stands for enterprise resource planning and means the system a business keeps its commercial transactions in: orders, stock levels, invoices, payments, accounting and often procurement and staff as well. It is therefore the centre of the operation, while the shop is the outward facing side.

For an online retailer that means a clear division of labour. The shop sells and takes orders. The ERP keeps stock, produces invoices, books payments and delivers the figures for analysis. Anyone holding both in one system saves an integration but gives up freedom in shaping the shop.

How it differs from shop and PIM

Three systems share the data, and the boundaries decide the effort. The shop holds everything the customer sees: text, images, prices for display. The PIM holds the product description those details come from. The ERP holds stock, purchase prices and bookkeeping. The decisive question is which detail is the source of truth where, and that question should be answered before the integration, not after it.

What goes wrong during integration

• Two stock figures: if stock is kept in both systems, the values diverge within days. One system has to lead and the other to follow.
• Orders without feedback: if the order arrives in the ERP but the status never returns to the shop, the customer learns nothing about the parcel.
• Price rounding: if the price is net in the ERP and gross in the shop, cent differences appear that turn up again in accounting.
• No retry: if the connection breaks, orders must be replayed. Without a queue they are lost or booked twice.
• Master data by hand: anyone creating new items in both systems produces a mistake on every second one.

Where the selection fails

The first mistake is choosing by features instead of by process. A system with a hundred modules does not help when your own order handling is not modelled cleanly. The reverse route is sensible: write the process down first, then check which system carries it.

The second mistake is underestimating the migration. Carrying over legacy data is the most laborious part of any switch, and incomplete legacy data gets carried into the new system instead of being cleaned. The third mistake is a missing connection to the chosen shop system. An ERP without a maintained interface to the shop costs manual work permanently.

Frequent questions

• Do I need an ERP from the first sale? No. Up to a certain volume a spreadsheet with clear rules is enough.
• Can a shop system replace the ERP? For small volumes yes, for accounting and stock usually not.
• What is the most common reason to switch? Too much manual work as the business grows, not missing features.