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ERP Simply Cannot Deliver the Perfect OrderAt first glance, the linkage between the efficient management of the customer order lifecycle and satisfying the fickle consumer with the right product in the right place at the right time with the right price might not be exactly obvious. However, the manner in which multi-channel retailers process orders through online stores, a marketplace such as Amazon or eBay, a pop up store at a tradeshow, a mail-order catalog, or even a physical location and then fulfills these orders via a warehouse, drop-shipper, or outsourced logistics provider directly affects the total customer experience. Exceeding expectation, executing flawlessly and building satisfaction, loyalty and retention, is about optimizing every touch point, and order capture and fulfillment is a vital part of this equation.

Today’s multidimensional supply chains offer enormous opportunities that unfortunately come with huge challenges. Specialized IT systems that are capable of matching demand across multiple channels with a distributed and, in some cases, virtual, supply ecosystem, are now required. But the truth is many organizations profoundly stumble in this area by attempting to standardize on enterprise resource planning (ERP) software. ERP software, while delivering huge benefits to the operations of certain types of large, multinational organizations, is not tailor made for the needs of the multi-channel retailer. Simply put, ERP software, such as that produced by SAP, Oracle, Epicor, Infor, NetSuite, Microsoft, or Sage, is not architected to sell products through multiple channels nor to deliver these products via multiple fulfillment mechanisms. These and other notable deficiencies are easily revealed:

Flawed DesignFrom its very foundation, ERP software was built to run enterprises with efficiency. It has its roots in accounting for regimented consistency, as well as human resource management for inward facing, consistent company operations. Rigid data models and process flow ensure standardized operations and minimized cost. These systems are not meant to be flexible, adaptive or customizable to the unique requirements of a particular company and the re-engineering of business practices to fit the

“industry standards” they prescribe may actually lead to a loss of competitive advantage. As a result, a multi-channel retailer who wishes to utilize multiple eCommerce platforms, Internet storefronts and/or online marketplaces to sell the exact same products for vastly different prices, with unique channel-specific promotions and then import these orders into their system for fulfillment via internal warehouse, drop-shipments or Amazon Fulfillment by Amazon (FBA) is going to be disappointed with an ERP system.

Imperfect Order Lifecycle ManagementERP software manages orders in ways that are efficient to the application’s own internal preset

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workflow and processes, not the business processes channel partners, fulfillment organizations, and direct customers would ever utilize. The systems are designed for the antiquated “buy – hold – sell” model where high-volume “routine” orders are placed by known customers, fulfillment occurs via company-owned warehouses and purchase orders are used as the common currency. The software is unable to deal with plausible situations such as a “spot” purchase made by an unknown customer using PayPal via Amazon, fulfilled via a third-party logistics and shipped to three separate parties with one of them receiving a gift receipt.

Limited Functional Scope and Lack of FlexibilityERP systems were designed to manage the specific tasks of the large established businesses and therefore lack an approach to real-time dynamic problem solving. This makes such systems unsuitable for use in a modern business environment that is highly competitive in nature such as multi-channel retail. Need to manually redirect an order taken via the web on moment’s notice to a fourth tier backup supplier because your primary supplier is closed for the Chinese New Year? What about react to a sudden spike in demand for a product due to an early and unseasonably warm spring? How about adjust pricing on the fly due to sales analysis? Or revising the manual order entry process because your customer service representatives are taking too long to process orders? None of these urgencies can be solved by an ERP system.

High Degree of Customization RequiredERP software typically requires significant modifications to adapt to a particular business and its unique requirement. Professional services costs to the tune of three to 10 times software license fees are not uncommon, with technical support charges usually double than those charged for using the software “out of the box.” And in the end, customizations spell massive trouble for system upgrades, as too many modifications could render a future system upgrade to be virtually impossible. At the same time, if ERP software could deliver the functionality needed for the multi-channel retailer, then customizations would not be needed in the first place.

Protracted Time to Productive UtilizationIt is alarming to note the amount of time that must be invested to implement an ERP system in an organization, with timelines based on many months or even years. As capital is tied up of this time period, employees become distracted and unproductive, frequently shunning their normal roles to participate on project teams, test the system and undertake extensive training to attempt to effectively utilize the complicated and cumbersome software.

Unrealistic Expectations after ImplementationBombarded with glitzy marketing literature promising the world, system “marketectures” that

“prove” that the system is functionality rich and sales executive who overpromise, it’s no wonder why customers of ERP software are disillusioned when confronted with massive processes changes, workarounds, or even the reinstitution of manual tasks after implementation.

Massive Total Cost of OwnershipERP systems are extremely expensive, with even companies under $50mm spending on average upwards of $140,000 in licensing fees, another $100,000 in implementation and professional

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services charges and a first-year technical support bill of $34,000. And the costs just keeps rising, with hardware, peripheral, database software and training fees adding thousands of dollars to the total costs in just the first year alone. Add annual software maintenance and technical support fees upgrade charges and the seemingly unending system modification and customization fees, and Total Cost of Ownership (TCO) can easily millions of dollars over time.

The needs of the multi-channel retailer with respect to order management and fulfillment are obvious. Today’s winning organizations are focused on unifying the orders placed through multiple channels, enabling multitier fulfillment mechanisms and dramatically improving customer response times requiring technologies to help enable the perfect customer experiences through proactive visibility, accurate real-time responses to requests and perfect delivery performance within an increasingly complex and fragmented ecosystem of supply chain participants. However, the potential option of implementing an ERP system and adding bandages in the form of custom development and point solutions is flawed. The long-term solution requires the adoption of affordable technologies specifically designed for the unique needs of the multi-channel retailer.

About Monsoon Stone EdgeAt Monsoon Commerce, we haven’t tried to be everything to everyone. Since 2001, we concentrated on designing, implementing, and supporting enterprise software for small and mid-sized multi-channel retailers. Today, Monsoon Stone Edge is trusted by over 2,500 online merchants to run their business operations – from single-person companies processing as low as 10 orders per day to multi-million dollar enterprises fulfilling over 5,000 orders per day, including several in the Internet Retailer 1,000. We attribute this success to superior products, attentive customer service, unrivaled expertise, rapid implementations, and enterprising employees.

♦ Unrivaled Industry Expertise – Our team includes some of the industry’s leading multi-channel retail technology experts. With the lowest turnover rate in the industry, we are constantly building on our knowledge and resources. Our employees are also the driving force behind our

“customer-first” philosophy. ♦ Customer Focused – Product design involves collaboration with multi-channel retailers to assist us in

identifying industry needs. The result is a product that meets—and surpasses—customer expectations. ♦ Superior Product – By investing over 20% of our revenues in research and development—one of the highest percentages in the industry—our solution sets the standard for the industry.

♦ Rapid Deployment – Our efficient implementation methodology brings your operation online much more quickly than our competitors, whether we work directly with your team or in partnership with a consultant.

♦ Higher Value – Monsoon Stone Edge offers more value for your investment due to its reasonable licensing, implementation and support fees coupled with its depth of functionality. In fact, customers often remark that comparable order management software is usually 10 to 20 times more expensive.

For more information on the order and inventory management system that optimizes billions of dollars of customer orders per year and was named as the overall category leader by Internet Retailer in 2013, please contact stoneedgesales@monsooncommerce.com or call 1-800-520-2294.

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