Connecting Systems in the Cloud

Connecting Systems in the Cloud

Recently I dropped in to see an old friend I have known for a number of years, my friend runs a medium sized business with roughly 40 staff. The business has been operating for about 15 years and is well known in the cosmetics industry.  The business has one main warehouse and two suppliers that drop ship products on their behalf. I asked my friend about the different systems he was using. No surprises here

  •  Magento to sell online ( eCommerce sales )
  •  eBay for an additional marketplace
  • MYOB for accounting purposes
  • Nortel for connecting to the large supermarket chains
  • a .Net built warehouse management system/ partial inventory system
  • FedEx ship manager for shipping
  • No CRM system
  • Email to communicate orders to drop shippers

A common situation that businesses find themselves in is that over the growth years systems are put into place to cater for certain requirements without necessarily thinking about the entire business and how other departments require the dynamic data to be passed within functions. Unfortunately for many businesses the data may need to be re-keyed or duplicated causing either unreliable data sources or additional time to manage updates.

 

Connecting Systems in the Cloud

 

Business are moving to the cloud to synchronize data across different systems, in turn sharing the data across the business units. We are seeing business take advantage of additional marketplaces and selling channels from Amazon to eBay and other unique industry verticals that may be appearing. Some retailers are watching competitors enter new spaces and are asking ” How did they manage to do that? ” What retailers want is to scale business however have the control in doing so. It is reckless to scale a business into new markets without having inventory control, margin control and the ability to reconcile the transactions.

When we asked some of our clients why they drop ship, here are a few key reasons:

  1. Reduce overheads of holding stock
  2. Reduce packing overheads
  3. Double handle shipping costs example from supplier to retailer then shipping the items out
  4. In some cases faster to customer geographically and taking into consideration transport and checking in processes.
  5. Access to more products
  6. Access to new regions without holding stock
  7. Capital is not  large enough to carry inventory of  all the products they sell

There are also traps to drop shipping, loss of control, potentially higher shipping costs and so on.  As businesses expand and add either their own locations or additional drop shippers there is an increasing need to have systems aligned. We see a number of merchants moving systems to the cloud to ease the integration burden between external and internal platforms.

Industry statistics note the main reasons why people move to the cloud are

  • Adding additional locations both drop shippers and locations managed by the business
  • Ability to scale the operation
  • Take over the world
  • Old legacy systems that do not play nicely
  • Cost of internal IT maintenance and integration

The stats certainly match up with my friends challenges with outdated technology systems, the need to manage multiple locations and the desire to scale. Comment below to tell Octerpus about some of the systems you are connecting together in the cloud?

 

 

 

 

 

 

 

 

— July 7, 2015

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