Before deciding to implement an e-commerce connector, you need to figure out if it’s worth the investment and the ROI of an erp e-commerce connector. How much do you hope to gain by using it? What might it cost you should you decide not to? Ultimately, the returns for your company will often be decisive. This article gives you an overview of the costs and revenues of a possible solution, allowing you to weigh costs and benefits.
E-commerce connector investments for Microsoft Dynamics 365
The costs of implementing an e-commerce connector depend on several factors, namely:
- The target group: is the webshop intended for the B2C or B2B market? B2C webshops tend to have different (often simpler) requirements for integration than do B2B platforms.
- The degree of integration: which processes are automated? Examples are order import, product synchronization, delivery information, and customer portals.
- The degree of complexity: are there industry-specific add-ons present in Business Central that might affect your integration?
- The amount of customization: is customization available? Are customization-related plug-ins installed in the webshop that will likely affect the integration?
- The product information: how much relevant product information is already available for use? Think of images, commercial texts, product properties, etc.
When you consider the above, it sure doesn’t seem obvious or easy to estimate costs. A further complication is a fact that what is considered ‘standard’, differs per supplier. Still, to give you a general idea of the costs using Tinx-IT software, you can expect about €149 (Amazon) to €399 (Magento commerce) per month for standard configurations. Regarding one-time implementation and configuration costs, Tinx-IT uses the following estimates:
|Webshop and & ERP types||Integration type||A minimum amount of days|
|1 B2C web store and 1 ERP||light integration||4 to 6 days|
|1 B2C web store and 1 ERP||advanced integration||6 to 10 days|
|1 B2B web store and 1 ERP||light integration||6 to 10 days|
|1 B2B web store and 1 ERP||advanced integration||10 to 15 days|
|* implementation fee per day €1080|
The cost of not implementing
Expected losses from manual order entry
The potential costs of manually handling orders are often underestimated. To give you an idea of what you could expect by not using an automated link between your webshop and Business Central, consider the following:
- 4 minutes per order. On average, it takes our customers roughly 4 minutes to manually enter an order received from their webshop into Microsoft Dynamics 365 Business Central.
- 36 hours a week. Say one employee processes orders non-stop for 36 hours a week, the number of orders easily reaches 2338 orders per month.
- €56,000 per year. How much do you pay employees who manually enter orders within your company? Do you include taxes, insurance, holidays, and benefits?
Based on these assumptions, the cost for each manually entered order comes to €2.
Now also consider the following with regards to hidden costs:
- Human error is a thing. The more often this happens, the quicker it leads to angry calls, unclear email correspondence, and dissatisfied customers. Although these costs are difficult to estimate, they undoubtedly have an impact on total costs.
- Manually entering orders is probably not your employee’s favorite task at work. It follows that they could bring more value to your company when they can put their time and energy into generating new customers or handling existing ones.
- Most companies start their order process after an order is entered into their Microsoft Dynamics 365 platform. This means, however, that if an order is not entered straightaway, it significantly slows down your entire order process.
The ROI of an e-commerce Microsoft Dynamics 365 connector
Top 3 most common reasons for purchasing a commerce connector
- Higher quality service. Two target groups immediately benefit from the advantages of an automated system between a webshop and Business Central: customers and employees. The automatic exchange of data ensures that customers quickly find what they’re looking for. It also enables them to have a live overview of product information, inventory data, and delivery times. Since employees can now better help customers and respond to customers’ personal preferences, by having access to the latest customer and order data, your customer service goes up as well.
- Saves time. If every order manually entered into Microsoft Dynamics 365 takes about 4 minutes, and you consider how many orders are placed every week, you quickly realize how much time is involved in the processing of orders. It comes as no surprise then that being able to save time, is one of the most common arguments for integrating your webshop with your ERP system.
- Reduced operating costs. In addition to operational efficiency, integration can also reduce operational costs. As manual data entry becomes unnecessary, it reduces the risk of human error and its associated costs. Moreover, as inventory information is updated automatically, this allows you to purchase your stocks much more efficiently and avoid inventory shortages.
To invest, or not to invest, in an e-commerce connector
In the end, every investment you make has to be justified by clear results. Whether that be increased customer satisfaction, improved efficiency or productivity, faster order handling, or fewer costs because of human error, that depends on the business. Whilst it’s true that not all profits are easily expressed in figures, integrating both these systems does lead to a positive impact on the operation and operational costs.
How big of an impact? As always, it depends, in this case on the degree of integration and complexity. For example, a company that opts for only an order import saves ‘only’ 0.5 FTE, whilst a complete integration plus customer portal could easily lead to savings of about 2-3 FTE’s. To accurately estimate your ROI, be sure to take these factors into account. In both cases, however, you will likely have less pressure on back-office work, allowing your employees to pay more attention to other tasks such as customer satisfaction.
Want to estimate the ROI for your company?
If so, start by collecting the following information:
- How many of your employees process orders daily?
- How much time does it take to process one order?
- What is spent on operational costs, i.e. labor?
- What hidden costs does manual order handling entail?
- What are the (financial) consequences of handling complaints?
- To what degree is complete product data important for your business, and if it is, how could this generate more customer value?
Want to learn more about selecting an ERP e-commerce connector?
Head over to our e-commerce connectors for more information about our solutions. You can also follow this series, in which we help you go through the selection process efficiently and effectively, allowing you to make the best choice for your organization.