SAP AS A FOUNDATION IN E-COMMERCE TOGETHER WITH MAGENTO
Every retailer and manufacturer who operates e-commerce on a professional level cannot avoid an ERP system, in which the essential (product-), price- and inventory information is stored as the leading system and which is ultimately responsible for all processes and their linking to this data.
The larger the company and the e-commerce solution, the more extensive and complex the corresponding backend system(s) (WaWi, ERP), whereby SAP is only an example. In addition to countless industry systems and individual developments, medium-sized and larger companies can find the following solutions in addition to SAP as their “backbone”:
Now, of course, it is already the case that some of the providers of such ERP solutions also offer e-commerce products, as is the case with SAP, for example. To this end, the Walldorf-based company has already acquired the ecommerce software provider Hybris in 2013 and integrated the solution into the SAP Customer Experience Unit in 2018. The e-commerce offering now operates under the SAP Commerce Cloud label.
So the question naturally arises as to why it can make sense to use a different technology for the commerce part. Because it can of course have advantages to operate a homogeneous IT landscape with as few different service providers as possible, as this improves compatibility and, in some cases, allows synergies to be exploited.
On the other hand, vendor lock-in is significantly increased and flexibility is restricted accordingly. Especially with SAP solutions, the TCO (Total Cost of Ownership) is not exactly customer-friendly and the issue of time-to-market is always an obstacle.
E-commerce solutions like Magento are fundamentally designed to enable the fastest possible implementation and a correspondingly fast rollout. In addition, there are sometimes very significant differences in the area of license costs and implementation costs, which means that companies using an “external” store system like Magento can realize significant cost savings in addition to increased flexibility.
With the newer SAP systems such as SAP C4/HANA or S4/HANA, the requirements of modern e-commerce are already taken into account much more comprehensively than is the case with older SAP Hybris versions. In practice, however, only a certain percentage of SAP customers use such newer systems.
Now, of course, it is already the case that some of the providers of such ERP solutions also offer e-commerce products, as is the case with SAP, for example. To this end, the Walldorf-based company has already acquired the ecommerce software provider Hybris in 2013 and integrated the solution into the SAP Customer Experience Unit in 2018. The e-commerce offering now operates under the SAP Commerce Cloud label.
So the question naturally arises as to why it can make sense to use a different technology for the commerce part. Because it can of course have advantages to operate a homogeneous IT landscape with as few different service providers as possible, as this improves compatibility and, in some cases, allows synergies to be exploited.
On the other hand, vendor lock-in is significantly increased and flexibility is restricted accordingly. Especially with SAP solutions, the TCO (Total Cost of Ownership) is not exactly customer-friendly and the issue of time-to-market is often challenging.
E-commerce solutions like Magento are fundamentally designed to enable the fastest possible implementation and a correspondingly fast rollout. In addition, there are sometimes very significant differences in the area of license costs and implementation costs, which means that companies using an “external” store system like Magento can realize significant cost savings in addition to increased flexibility.
With the newer SAP systems such as SAP C4/HANA or S4/HANA, the requirements of modern e-commerce are already taken into account much more comprehensively than is the case with older SAP Hybris versions. In practice, however, only a certain percentage of SAP customers use such newer systems.
CASE STUDY
For more than 100 years, the globally active, medium-sized Erhardt+Leimer GmbH group of companies has stood for “top technology on running webs”. This slogan is still considered as yardstick and serves the more than 1,600 employees of the enterprise, as stimulating guidance motive.
The company is one of the leading suppliers worldwide in the field of web guiding, web control and web inspection. Its proven sensors, controllers and drives help manufacturers in the textile, paper, corrugated board, printing and tire industries, as well as many other industries, to design their production processes efficiently. With 19 subsidiaries in Europe, Asia and America as well as 115 commercial agencies all over the world, Erhardt+Leimer is present in the most important industrial nations. The production sites are located in Germany, Italy, China, India and the USA.
The implementation of the vision of a global web store for spare parts and components is an important component of the digital strategy at Erhardt+Leimer, which contributes to providing customers with the best possible support at all times.
Erhardt+Leimer is a long-standing SAP customer. Nevertheless, in the end they decided to use Magento as their store solution with the following reasons:
“We chose Magento as our global e-commerce solution because of its good TCO and very high flexibility. This decision proved to be absolutely right quite early in the development process due to some change requests”.
Tobias Högg (Head of Digital Marketing, Erhardt+Leimer)
WHAT IS THE BEST TECHNICAL WAY TO CONNECT A SAP SYSTEM TO AN ECOMMERCE SOLUTION LIKE MAGENTO?
It is neither possible nor useful to make a general statement here, as a large number of parameters are important. These include the respective SAP version, corresponding quantity structures, for example, with regard to order volumes and frequencies, the need for real-time queries (e.g. availability and prices) and much more.
On the Magento side, customers benefit from the enormous flexibility of the ecommerce platform, which enables seamless integration of third-party systems such as SAP. Magento’s service layer offers a very extensive interface base for REST and SOAP web services, which can be used to address all relevant entities such as prices, customer data, orders, etc.
As already sketched, SAP offers different possibilities to connect to the service layer of Magento, depending on the version used. For example, SAP and Magento can be easily connected via the Netweaver Gateway or via SAP Web Services. In addition, the following approaches for the exchange of different data are available:
SAP Process Integration (SAP PI)
This is a system designed for communication between an SAP system and external systems. To send information to a system or to receive information from external systems, SAP PI uses the ABAP programming language as well as Java stacks and various adapters. Before communication between the systems, these adapters ensure a possible conversion to the target system format to be used.
SAP PI can also be operated exclusively on the Java stack. In this case, however, you should consider whether it would be more sensible to activate the additional Process Orchestration component.
SAP Process Orchestration (SAP PO)
SAP Process Orchestration is a combination of different SAP solutions with the goal of providing the logic, applications and integrations needed to close all gaps between your SAP system and all extensions.
SAP IDoc
This is an SAP-specific tool or data format with which business processes with external partners can be integrated into SAP. IDoc is an abbreviation for ‘Intermediate Document’, which can be freely translated as exchange document. The purpose of an IDoc is to transfer data or information from SAP to other systems and vice versa. The transmission from SAP to non-SAP systems takes place via a so-called EDI subsystem (EDI = Electronic Data Interchange).
IDoc provides a variety of different, predefined types for a wide range of business processes, which represent internal SAP containers for the exchange of documents such as invoices, delivery bills or purchase orders.
OData (Open Data Protocol)
Using data from different sources requires a high degree of flexibility. The OASIS consortium, of which SAP and Adobe are members, offers the Open Data Protocol (OData), a standardized protocol for the development and consumption of RESTful APIs.
In other words, the Open Data Protocol (OData) is a Web protocol for requesting and updating data; it uses or builds on Web technologies such as HTTP, Atom Publishing Protocol (AtomPub), and JSON, enabling access to information from a variety of applications and services. OData services can be easily deployed on multiple platforms, enabling the creation of cross-platform Web and mobile applications.
SAP RFC (Remote Function Call)
Remote Function Call (RFC) is the umbrella term for SAP’s own protocols and interfaces with which functions are called in a remote system. Communication is possible both between SAP systems and between an SAP system and a non-SAP system. The latter typically uses an RFC library provided by SAP for the respective runtime environment or programming language. The possible applications are manifold. Data can be transported into or out of an SAP system and thus be made available in almost any environment. An important application purpose is the processing of transactions across system boundaries, e.g. for replication/synchronization of data sets.
Middleware Solutions
To connect SAP to an e-commerce platform such as Magento, a wide variety of 3rd party solutions — often referred to as middleware solutions — can also be used. Such a solution is offered by Proclane (formerly HONICO) with the software IntegrationMan. This is a flexible, SAP-certified platform, which was developed for the integration of non-uniform systems. Via a corresponding store connector IntegrationMan enables communication between SAP and the respective store system. To do this, the software must be integrated into the existing system landscape. The IntegrationMan then ensures that the processes are executed across systems.
Another solution for connecting SAP to Magento is the Pacemaker software developed by the Magento Enterprise Partner TechDivision. This is also a middleware solution that enables process modeling and the control and handling of import processes from third-party systems like SAP in Magento.
WHAT ARE THE BIGGEST CHALLENGES IN AN INTEGRATION PROJECT AND HOW CAN THEY BE SOLVED
In principle, it is very important that a corresponding integration project is approached with the greatest possible transparency and openness from the very beginning and that comprehensive and, above all, ongoing communication takes place among all relevant stakeholders. A central requirement in an integration project is always to pick up all project participants early on, to gain a common understanding of the respective status quo and, of course, to agree on appropriate goals and possible future scenarios at an early stage.
Furthermore, it is of central importance in an integration project — regardless of the technologies involved — that representatives from both worlds, i.e. from both the ERP side and the e-commerce side, are involved in an integration project from the very beginning.
On the customer side this is the digital unit, the IT department and in particular the department responsible for SAP/ERP, the corresponding SAP/ERP integration partner and the e-commerce integration partner
In our opinion, a generally valid approach for the technical connection of the ERP system with an ecommerce platform is hardly feasible here, since every ERP landscape is structured differently and the processes in detail always show differences to so-called standards. A wide variety of systems and components also play a decisive role in the system landscape. The following questions, among others, are important:
- Which system and which version is used on both the ERP and e-commerce side in detail?
- Which systems already exist alongside ERP or should there be in the future? (PIM, DAM, CRM, …)
- What are the basic options for connecting third-party systems?
- What quantity structures and what update intervals are we talking about? I.e. is the exchange of data between the systems in a certain cycle (e.g. every hour) sufficient or do data have to be communicated in real time?
- How are the stakeholders positioned in terms of technology and manpower?
- What do any future scenarios look like? For example, is an expansion into new markets (possibly with other systems in the worst case) planned? etc.
DIFFERENT RELEASE CYCLES BETWEEN SAP AND AN ECOMMERCE PLATFORM
This is certainly one of the central differences between classic backend systems such as SAP and the digital commerce environment. In the latter case, there are shorter release cycles than in the backend systems due to the enormous dynamics of the market and the constant introduction of new technologies and tools. This is certainly also due to the fact that these in turn intervene so deeply in the business processes that short-term changes make no sense. Corresponding processes in the ERP systems are usually designed for a long period of time and there are too many dependencies on the ERP process.
In addition, due to the enormous dynamics of today’s e-commerce environment, agile project development and appropriate project management is usually the only sensible approach, whereas in the ERP environment, longer development cycles and often long-term existing processes are usually assumed.
In an integration project it must therefore be ensured that the different release cycles and generally the different “pace” of backend systems compared to commerce solutions can be mapped as easily as possible. This means that it must be ensured that the e-commerce platform is usually updated in short cycles (Continuous Integration and Continous Delivery) while the backend system can usually manage for a longer period of time without major updates or releases.
POTENTIAL FOR CONFLICT DUE TO DIFFERENT LANGUAGE BETWEEN ERP AND E-COMMERCE ENVIRONMENT
Especially at the beginning of an integration project, you often find that you have IT professionals on the other side of the table, but they usually use a completely different language with different vocabulary and technical terms.
In this respect, it makes sense to establish a common understanding of the respective terms and special features at the beginning of a project in the context of a so-called Stakeholder Alignment Meeting. We have gained quite good experience with a common glossary. There the respective terms and technical terms are listed with corresponding explanations. During the project, all project participants can look it up if there are any ambiguities, which significantly increases the likelihood of people actually talking about the same thing. The following examples should clarify this wording problem:
For example, a short explanation of the stock or availability: In SAP or an ERP system, an existing stock does not necessarily mean that it is available. For example, there could be a reservation. This circumstance sometimes has significant effects on the web store.
SOLUTIONS AND INSIGHTS
The success of Magento is based in particular on the following two pillars: The software is open source, i.e. the source code is open and can be checked, adapted and extended at any time if necessary, and every entity in Magento can be accessed from outside via appropriate interfaces. This provides the e-commerce platform with the greatest possible flexibility when it comes to connecting any third-party systems.
We at TechDivision have gained very good experience in previous integration projects with OData or the use of the TechDivision Pacemaker middleware solution. The SAP connector for Pacemaker already covers a large part of the standard requirements needed in most store projects, so that primarily only the SAP side needs to be adapted.
The following procedure has proven to be very target-oriented:
In a first step, a requirements workshop is conducted with all relevant stakeholders. This includes, among other things, the already outlined alignment with a corresponding glossary to ensure a common understanding of all participants. In the workshop the following questions will be developed:
- Which requirements are to be implemented concretely with which prioritization?
- Which stakeholders are needed and when?
- How can a concrete solution approach with a coordinated architecture look like?
Experience has shown that pricing is often a sticking point, especially in the B2B environment, where customer-specific pricing is often the main issue. In a well-known SAP calculation scheme, all prices are calculated and run through. In this schema, subtotals, discounts on different areas, etc. are taken into account.
The challenge here is that the SAP standard module “Sales Order Simulate” has a very long runtime. Depending on the respective parameters, it can take many seconds until a corresponding price is “spat out” at the end. In the e-commerce environment this is often not acceptable because the customer wants to see the corresponding price immediately.
SAP partner KENTIVO has implemented a special “Pricing” service for this purpose, which exclusively deals with price calculations in real time and ensures that customer-specific prices are output instantaneously, taking into account any rounding problems.
BEST PRACTICE
The EGLO Group, with its headquarters in Pill (Tyrol), around 70 companies in over 50 countries worldwide and production facilities in Hungary, China and India, produces more than 80,000 lights per day. Although the likelihood of using EGLO lights at home or at work is very high, the manufacturer of the lights is known to very few people. This is exactly the dilemma EGLO was faced with.
For this reason, the consulting team of the Magento Enterprise Partner TechDivision had the first discussions with EGLO already at the end of 2016, how exactly this situation could be changed in the best possible way. In May 2017 the first strategy workshop was held, where the possibilities of an independent EGLO B2C brand were highlighted. These workshops were prepared and conducted by the TechDivision eConsulting. The result was that EGLO needs a B2C-brand to address a broader customer base.
In a first step, it was decided to replace the existing website. In this case, EGLO did not opt for a conventional content management system, but relied on the e-commerce platform Magento Commerce from the very beginning.
Is it reasonable to use an e-commerce platform as a basic technology if no e-commerce is planned at all at the beginning? In the medium and long term, this approach can have great advantages if, on the one hand, products with corresponding categorizations are in the foreground and, on the other hand, the topic of e-commerce can become relevant at a later point in time.
Especially in today’s world, companies should keep this option open, regardless of their industry and orientation. By using an e-commerce platform like Magento, you keep all your options open. In 2019, the technological basis was laid by a large number of independent country clients, for which the e-commerce functionalities will be successively activated in the course of this year. In addition, by mid-2020 — also due to the corona situation — the first e-commerce approaches with the new platform were successively rolled out in some countries within a few days.
As backend and leading system, EGLO has been using SAP for a long time. The product data is maintained in Akeneo PIM and output to the respective channels. The following architecture sketch illustrates the IT infrastructure used at EGLO:
Especially medium and large ecommerce platforms almost always have to deal with the problems of long-running and competing processes such as the import and export of large amounts of data. EGLO also has complex processes and a correspondingly heterogeneous system landscape. The middleware solution Pacemaker supports EGLO in modelling the processes, thereby ensuring the availability of the platform at the highest level and providing valid and consistent data for its visitors. An SAP plug-in for Pacemaker ensures the smooth exchange of data with the ERP system.
TechDivision is Magento Enterprise Partner from the very beginning, Adobe Gold Partner and the leading Adobe Commerce Partner for the DE/AT/CH region
