Magazine Article | February 1, 2003

Closing The Loop On POS And ERP Integration

Source: Innovative Retail Technologies

If you are considering a big move to ERP (enterprise resource planning), make POS integration a mandatory consideration in your search.

Integrated Solutions For Retailers, February 2003

For far too long, retailers have been using emasculated ERP (enterprise resource planning) functionality to run their businesses. Like many of the old accounting applications, ERP developers have been slow to develop a POS interface designed to run a full retail operation, which includes deep integration. The result is that there are still a large number of retailers running manual processes to update their ERP inventories and general ledgers, leaving tremendous margin for error.

ERP, POS Vendors Unite
ERP companies like JD Edwards are aggressively developing relationships with POS software developers who provide tight integration to their applications. As a result, retailers are able to realize greater efficiencies while at the same time reducing overhead.

One of the most obvious benefits retailers are recognizing is the ability to take a real-time look at their current inventory and inventory needs on a case-by-case, store-by-store basis, right from their back office. And, they can do it with a click of their mouse. Many are also able to take advantage of the multilocation backbone of their ERP system, whereas previously they relied on a polling solution to pull data from each store and manually move it into their back office system.

POS Vendors Avoid Past Mistakes
Many POS software developers have tried integrating with high-end ERP systems in the past but have failed time and again due to a lack of understanding the software, its design, or the programming methodology - but that is changing rapidly. A new breed of POS vendors has emerged that has a detailed understanding of both the front end and back end of high-end management systems. In many cases, these vendors are working partners with the ERP vendors and are either co-developing or supporting the development of integrated systems.

One recent example is Robert Mondavi Winery, a retailer that installed POS software that was integrated to their JD Edwards back end system. The result was less time spent on manual processes and a centralized inventory that was always accurate. Time savings, money savings, and increased efficiency are the hallmarks of a strong IT solution and the result of closing the ERP loop.

Retailers Benefit From ERP, POS Integration
Moving forward, the demand for integrated services will increase to the point that the most progressive ERP packages will have specialized partnerships or software to address vertical retailers' needs. And, more general ERP packages will be available to serve the majority of general retailers. The real beneficiaries are the retailers, who will have "one-stop shopping" and one point of contact for service and support. Retailers will also benefit from open standards used to make software integrate with other software.

If you are not using POS software that is integrated to your back end, but instead are using manual methods for transferring data, then you need to explore these integration possibilities. Investment is surprisingly low when compared to customization, and most retailers find that they are able to purchase software that integrates for nearly the same or less than they were already paying for their non-integrated legacy systems.

POS and ERP are no different than other IT initiatives. The keys to long-term success are closing the loop, narrowing accountability, and investing in a product that will be flexible enough to meet your needs today and tomorrow. If you are considering a big move to ERP, make POS integration a mandatory consideration in your search.

Albert Einstein said, "We can't solve problems by using the same kind of thinking we used when we created them." Neither can we continue to accept the holes that were left unfilled in our legacy technology solutions. Integrating POS and ERP represents that closure. Will you be the visionary in your company that steps up to the plate with a new kind of thinking and fill the gaps?