Replacing the ERP ‘One Piece at a Time’ - Modern Distribution Management

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Replacing the ERP ‘One Piece at a Time’

Relying on old ERP technology is restricting what distributors are able to do with e-commerce sales.

As they invest heavily in eCommerce storefronts and strategies, B2B distributors are relying heavily on their enterprise resource planning (ERP) systems. While the ERP is a vital piece of doing business today, the technology is incredibly old, with many systems dating to at least the 1990s. Few of us are still using a boiler from the ’90s, or a dishwasher, or probably even a car. Distributors may not know this, but relying on old ERP technology is actually restricting what they’re able to do with e-commerce sales, because it can’t handle the complexity of large catalogs; specifically, around digital asset management, taxonomy management and detailed attribution. 

With so much of their business reliant on an ERP, how can a distributor break free of the bondage? The answer, as Johnny Cash once sang, is “one piece at a time.” By replacing the components of the ERP one at a time, distributors can bring their business into the 21st century. All they need is a place to start.

In the song, performed by Cash and written by Wayne Kemp, the narrator works on the GM assembly line, putting wheels on Cadillacs. He hatches a plan to slowly steal car parts over several years, and then assemble a car from the pilfered parts. In the end, the car doesn’t look pretty, but the narrator takes great pride in his creation, vowing to “ride around in style.” 

Now, we’re not advocating theft. And in contrast to the song, augmenting an ERP one piece at a time won’t draw the laughter that Cash’s narrator did as he cruised around. An ERP that has updated functionality can make life much easier for the B2B e-commerce seller. 

But where do you start? Unlike the song, distributors aren’t building something wholesale — they’re looking for pieces that can improve what they already have. As a first step, distributors should identify their systems of record, and then find the systems subscribing to that. If you have a publishing system, what are the subscribing systems linked to it? Once that is mapped out, you have a clear game plan for where to pursue upgrades. 

One place many may choose to start is with a product information management (PIM) system. A PIM system houses catalogs and products, and can act as the source system of record for product data and categories for all subscribing systems. This includes the ERP, which can subscribe to the PIM and draw data that way. A PIM system doesn’t necessarily replace the product file in the ERP system, but it augments it, bringing in improved capabilities. 

Now, one reason that so many wholesalers hold tight to their ERPs is that it’s a single system. Replacing and augmenting some of the core functions with multiple systems may appear overwhelming. To be honest, it can be more work and effort. But the bigger question is whether B2B distributors want to do more work to grow their e-commerce operations (or other business issues), or if they want to remain where they are today, possibly ceding online sales to a competitor. 

This is a tough journey, to be sure. Johnny Cash may be able to assemble a car in one verse, but distributors will need to make progress over time. Once the PIM is in place, they should identify other ways they can adopt and add on technologies that become the system of record for other problems. They may find new tools that can become their system of record for back office accounting transactions, credit card processing, customers (CRM), vendors and products (PIM), right on down the line. This creates more harmony in e-commerce, giving distributors a clear idea of where they’re going to handle different components.

Distributors who are looking to fully take advantage of all online selling has to offer need to start examining ways to improve their systems. The ERP is obviously well built, because it’s still in use 30 years later. But relying solely on the ERP imposes restrictions that can inhibit growth, sales and speed in the e-commerce space. 

Johnny Cash’s character didn’t have a priority order of the parts he took “one piece at a time.” I’d suggest the distributor first prioritizes the pieces they want to augment/replace from the ERP system.

Joe Bennett is SVP of North America at Unilog

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1 thought on “Replacing the ERP ‘One Piece at a Time’”

  1. Joe, you are covering quite interesting thoughts in your article!
    I agree with you that some distributors are not ready to “do more work to grow their e-commerce operations”. But I still think that soon enough they will have no other choice. The world is developing too fast and using only ERP will not ensure that success, that a combination of ERP and PIM can provide.
    In addition, I would recommend this article as a supplement to your thoughts on the impact of PIM systems on ERP systems:

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