All Systems Go

Sure, integrating your front- and back-end systems might be a headache--but it's well-worth the effort.
Magazine Contributor
5 min read

This story appears in the December 2004 issue of Entrepreneur. Subscribe »

You're probably dreaming about the day when your website will seamlessly integrate with your accounting, inventory and customer management back-end systems. With such a setup in place, your site can become the focal point of contact with customers, consolidating your entire history with them-from tracking packages, reviewing past orders and viewing sales quotes to answering FAQs and logging support calls.

You're not alone. This dream has yet to become a reality for many e-tailers. Instead of a seamlessly integrated solution, most still use a system thrown together when they first set up shop. Information is stored in separate accounting, warehousing or customer support systems, interfering with productivity. Tying these systems together might not be easy, but it should be a top priority for your e-business.

While netpreneurs seem to understand the importance of an integrated system, most think they don't have the time, money or patience for the job. But eventually, upgrading the back end becomes a necessity. It did for Henry Coleman, president and founder of WineAccents.comand, which sell wine accessories and baby-proofing products, respectively. Coleman expects the Chicago-based businesses to bring in combined sales in excess of $1 million for 2005.

When he started in 2001, Coleman couldn't find a single e-commerce product that allowed for custom-designed HTML and offered an integrated back-end/front-end solution at his price level. As a result, he used many different solutions: an e-commerce software product to interface with his customers (InterShop), a software product for accounting (QuickBooks), a database product to enter product and pricing information into the e-commerce site (Microsoft Access), shipping software (UPS WorldShip), a third-party vendor to get InterShop to talk to WorldShip, a freeware program for customer service, and an e-mail program (Microsoft Outlook).

"I used six separate systems that didn't talk to each other to run my company," says Coleman, 37. So when a customer called with a question, it was difficult to gather that customer's information. Some information was in one system, some in another. In addition, inventory data had to be manually entered and re-entered each month into several systems.

At the time, Coleman's only other choice was to build something from scratch, which he didn't want to do because it would have involved hiring someone or keeping someone on contract month after month as the website changed. "No one company would give you all the flexibility you wanted in the front end with your customers, while still having the power on the back end for accounting and purchase orders," he says.

That all changed in 2003, when Coleman learned about a solution from NetSuite that could seamlessly integrate websites with financials, warehouse management, and sales and customer support systems. Coleman implemented the system and now pays $4,800 per year for an ASP model.

"Every loop in the chain is connected," says Coleman. "There's not one thing that we do for a customer that we have to do outside the inventory loop." The solution improved his company's efficiency so much that he let two employees go, closed a Louisiana warehouse, and set up his new January 2004.

While Coleman found a solution to his problem without having to set up an in-house system, that won't work for every business. Just ask Jeffrey Wolfe, vice president and co-owner of Moosejaw Mountaineering, an outdoor adventure retailer established in 1992 that has a website, a mail order catalog, and six stores in Michigan and Illinois.

Wolfe recently oversaw the internal development of Moosejaw's own customized back-end system for use with its website, catalog and store sales. Moosejaw expects sales of more than $10 million by year-end. During Christmas 2002, Wolfe and his siblings, Robert (president and founder), 34, and Julie (co-owner), 31, realized Moosejaw had to upgrade its back-end system to keep up with growth. However, they knew they couldn't afford the high-end systems available on the market.

With the help of a consulting firm and input from his siblings, Jeffrey, 29, designed a system based on RetailPro, the popular retail POS software program Moosejaw already used to link its website to its retail stores to keep track of orders. The new web-based system, implemented before the Christmas season last year, ties the stores, catalog and website to the back-end functions.

"The system ties together several systems to create seamless solutions for shipping, time-management, accounting and financials, CRM, sales analysis and inventory management," says Jeffrey.

A key feature of the system triggers e-mails to customers with their tracking information. This is particularly helpful, especially since Jeffrey started each day during the 2002 Christmas season with "no less than 200 e-mails from customers asking, 'Where's my order?' But last Christmas, because of the system we built, I started my day with maybe three [such] e-mails."

The reduction in e-mail volume meant more time to operate the business. Jeffrey says the system, which cost Moosejaw about $75,000 to build (including consulting fees), has had a $500,000 ROI in less than one year. In addition, Moosejaw is now in negotiations to sell the $3,000 solution to other retailers that use RetailPro; it recently got its first customer, and 20 other retailers are interested.

Investing in an off-the-shelf solution, an ASP service, or an in-house system that ties your front- and back-end systems together will keep your e-business moving forward. Says Robert, "If you're not upgrading and making the site better, someone else is."

Melissa Campanelli is a marketing and technology writer in New York City.


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