The strategic objective of a CRM system is to be the front-office focal point for all information regarding external marketing, sales lead generation, prospect management and conversion, and ongoing customer management.
CRM integration's clout comes from sharing certain information so outward-facing employees can have full context regarding all external activities of the business. As such, the deployment of a solid ERP- CRM integration is almost a basic requirement to be a highly successful company in today's business world.
From a top-level summary perspective, CRM integration provides the following functionality:
- Customer contact information
- Customer contact activity scheduling, notes, and attachments
- Sales pipeline management including sales process, forecasting, quoting, and management reporting dashboards with CRM integration
- Marketing campaign automation and management
- Customer support ticket management, activity, notes, and attachments
- Call Center and Service Center integration
- Mobility access for Smart Phones and PDAs with CRM integration
A successful CRM integration deployment will not only provide the platform for the company to share information but enables a focused effort to increase top-line revenue and improve the customer experience. Given its objectives and goals, the main users of CRM integration are the sales force, customer support, marketing, and executive personnel. Passive users of a CRM integration may be finance personnel and managers in operations.
Sales pipeline management is the tool that executives use to better understand deals across the pipeline spectrum including deals that are close to becoming an order, seem to be stuck in the pipeline, or are in trouble and in danger of falling off the pipeline completely. This insight via CRM integration obviously provides an improved view into the health of the pipeline and therefore the ability to achieve forecasted results. In addition, it enables the company to be more proactive on numerous fronts including providing additional resources or focusing on a particular deal, managing raw inventory levels (pushing out or pulling in), adjusting manufacturing production quantities, and ramping up or ramping down company headcount.
Market campaigns can be effectively targeted and therefore by definition be more successful and this is achievable through CRM integration. CRM integrations also assist in the measurement of market campaigns, so marketing efforts can be continued, adjusted, or canceled as appropriate in a timelier manner.
The customer experience is greatly enhanced by having a CRM integration as all previous customer touch points can be noted in the system. This seemingly simple act allows a customer support representative to quickly read the notes history and quickly get up to speed on a past or present issue, without the customer becoming annoyed by having to rehash previously provided information. In addition, a sales or a customer support representative can make the customer feel special by "remembering" small details of past conversations.
As a final note, given all the above, a CRM integration system has to be very flexible in terms of data sources, as at any one point, an important piece of information might need to be entered and shared by the entire team. Having access and usage rules established upfront is highly recommended.
The Role of ERP
The strategic objective of an ERP system is to maximize business performance and control business processes and assets. Companies, during their initial start-up phase, can usually survive quite nicely on an off-the-shelf accounting package. However, once the company reaches, or is even in anticipation of reaching, a certain size or level of business complexity, a more robust system will be required. The anticipation of reaching the point where ERP is needed is an important consideration, because if a company waits too long to deploy a solid ERP system it runs the risk of drowning in the wave of success (i.e. employee productivity reductions, morale issues, lack of control) as opposed to riding the wave. In fact, in today's world of SOX (Sarbanes-Oxley), stepping up to an ERP system at the right time cannot be overemphasized.
From a top-level summary perspective, some of the basic functionality that an ERP provides are:
- Creation of sales orders for operations to manufacture and ship
- Invoicing and collection management of shipments or services provided to customers
- Manufacturing modules including MRP (Material Requirements Planning), Labor tracking, inventory control, part serialization or lot tracking, and handling of customer returns
- A general ledger module for recording transactions, analyzing activity, and producing financial reports for internal and external consumption
- Purchasing capability to procure materials, supplies, or services from vendors
A successful ERP deployment will not only provide the platform for the company to share and leverage information, but it is also the fundamental tool that a company uses to record accounting transactions, perform basic and complex business activities, monitor business performance enterprise-wide, and control assets. Given its objectives and goals, the main active users of an ERP system are finance, operations, and quality control/assurance personnel. Passive users (i.e. reviewers of results) of an ERP system include department managers with budget responsibility and executive personnel.
An ERP's main leverage point is that the different modules of business functionality within an ERP system are fully integrated within the CRM integration itself. This high degree of integration enables work performed by one department to be used by another department without the need to reenter the information (e.g. accounts payable uses the purchase order information entered by purchasing to pay an invoice and charge the correct general ledger account).
The information generated through the ERP is viewed by the external world, including board members, investors, auditors, Wall Street, and most importantly the SEC (Security Exchange Commission) as the single source of truth for all reported information by the company. So, while the CRM integration's data source/entry can be very flexible the ERP's data source/entry needs to be very tightly controlled including audit trail capabilities.
In addition, although CRM integration data might be interesting and provide some analytical assistance, its information will always be trumped by ERP data. This is an extremely important concept in any discussion regarding ERP and CRM integration.
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Successfully Managing Customer Expectations
Much has been written and discussed about the importance of meeting or exceeding customer expectations. The National Quality Research Center at the Ross School of Business, University of Michigan is best known as a research designer and source of the American Customer Satisfaction Index (ACSI). The ACSI is a closely monitored index by many, as companies with scores in the top half of ACSI consistently show far greater growth in market value added than companies with satisfaction scores in the bottom half.
It is important to remember, that every touch point that your company has with a customer or prospect has an impact on their overall satisfaction level and this can be tracked with CRM integration.
A touch point to CRM integration can be from a sales account manager, a customer support representative, an executive, or even an accounts receivable clerk trying to collect unpaid past-due invoices. Having the right information available, at the right time using a CRM integration, can dramatically impact the effectiveness of customer-facing personnel in meeting and exceeding customer expectations.
Pulling against this objective is the fact that the pace of the business world and the pace of life, in general, is increasing, and increasing at an accelerated rate. This pace trend seemingly has no end in sight as the world of technology (ex. cell phones, e-mails, smartphones, and cloud networking) has tightly latched on to people's personal space and time. The result is a customer's level of tolerance for inefficiency on the part of others is decreasing. Customers more than ever are evaluating vendors not only by their products but by their efficiency and how they treat their customers.
When the customer calls a business's support hotline or a sales representative, they fully expect, as they should, to speak to someone who is knowledgeable about the account. This knowledge encompasses past purchases, open and closed customer support tickets, or the status of an existing order. Customers want to deal with CRM integration vendors who show their respect not only by their words but by their actions as well.
Companies that can meet and exceed these expectations using CRM integration have created a huge differentiation vs. their competitors that can be aggressively exploited. Therefore, having the availability of a tool that can improve your customer's satisfaction level should be considered a strategic weapon and this can be achieved via CRM integration.
Handling Silos of Information with CRM Integration
As a company goes through its natural growth cycle, it will acquire business applications at the appropriate time. In order to preserve cash most companies will tend to delay purchasing a CRM integration or an ERP until the current application or approach is at the breaking point. Basically, the decision to purchase will be made when the cost or the pain threshold of not having the appropriate business solution far outweighs the cost of obtaining a solid application.
Different companies have different needs, so the CRM integration purchase may come first, or the ERP deployment may take priority. Regardless, typically the "go" decision for CRM integration is made on an independent analysis of cost vs benefit for that particular application. The second application purchase decision will typically follow the same path.
Given this buying behavior, most companies start out with an ERP and a CRM integration that are stand-alone applications with no integration or synchronization other than through manual efforts. Manual efforts without a CRM integration will quickly become futile due to volume, keystroke errors, or a lack of understanding of what really needs to be accomplished.
Without a robust integration between the ERP systems and CRM integration, each system will quickly become a silo of information. The ramifications of having silos will be employees being required to either access both applications or employees from one function contacting employees in a different function in order to obtain the required information; for example, a sales representative calling the factory to see if an order shipped or a customer support agent calling the finance department to check if a part in need of repair is still under warranty.
Other inefficiencies when your company forgoes a CRM integration include employees switching between the two applications and the learning curve of having to use a second application.
The CRM integration cost, in addition to reduced productivity, is having to buy additional user licenses for each system, but more importantly, the functional productivity reduction will inevitably show up in a reduced customer satisfaction level as the ability to respond to customer requests or inquiries accurately and timely will be impaired without a CRM integration system. Open source CRM has pros and cons, but it may still be a viable, cost-saving option for your company if you have a robust IT team in place.
The good news is all the above issues can be completely eliminated by replacing the silos of information with high-quality integration between the ERP and CRM integration.
Benefits of CRM Integration
The benefits that CRM integration can bring to different functions in the organization lead to an increase in customer satisfaction levels, including the following:
- Sales
- Enable quick and accurate responses to customers by placing information about prior activity at the fingertips of the sales force (orders, shipments, payment history, returned product, and pricing) with CRM integration
- More time selling vs. researching for answers
- Ability to quote using the price book's pricing and parts residing in the ERP
- Quote to sales order automation (with appropriate controls/reviews in place); increased productivity with CRM integration
- Increased focus on installed-based selling given the increased visibility to prior purchases
- Operations with CRM integration
Quote to sales order automation; increasing productivity by reducing errors through higher data accuracy in production builds with CRM integration
Less talking to the sales team on order status; increased productivity due to data synchronization by CRM integration
- Customer Support
Warranty end date for all products and components as serialized part information will be synchronized from ERP to CRM integration
Visibility to the configuration of the installed base; improved support
- Finance
Automation of adding new customers from CRM integration to ERP; with appropriate finance review before insertion into ERP
Quotations from sales using ERP price book and products; greater control combined with higher accuracy and less financial review
Customer Satisfaction Levels
- Quick and accurate responses to questions with CRM integration
Sales to manufacturing process improvements reduce the order fulfillment cycle
Customer relationships strengthened as the customer feels more valued by using CRM integration
Best Practices for ERP- CRM Integration
From a top-level perspective, the five best practices for a successful ERP-CRM integration implementation are:
1. Don't "reinvent the wheel"
Ideally, your ERP vendor should own the implementation as they know the key touch points and control points of their ERP system, which needs to remain the single source of truth. If the ERP system or the CRM integration system changes, then the ERP vendor will be responsible for making any modifications to their integration that might be required.
If your ERP vendor is unwilling to own the integration, then you should hire a consultant that has done integration between the specific CRM integration and ERP applications deployed. This will save implementation time and cost as the consultant won't have a steep learning curve to overcome.
The obvious downside to using a consultant occurs when changes to either the CRM integration or the ERP are made and you end up having to pay the consultant to make the necessary modifications in order to keep your integration up to date and working correctly.
2. Use an Integration Platform
The value of an integration platform is it will handle the mapping of the key data elements between the CRM integration and the ERP. In addition, vendors that provide integration products maintain integration points to various data sources ensuring correct use, maintenance, and support for integration points and application interfaces. This will significantly reduce the amount of time to make any changes in the integration necessitated by a change in the CRM integration or ERP as well as ease the ongoing support of the integration engine and integration points.
3. API Validation of Data coming into the ERP
It is important to maintain data integrity across any integration with validation of incoming data through the use of an application program interface (API) for the given business application. This holds true for both the CRM integration and the ERP platforms to maintain a consistency of data across the business. Since the ERP is the single source of truth, it is critical that data integrity be maintained at all times.
The best way to ensure that the ERP database remains clean is to validate all inserts requested to be made from the CRM integration to the ERP before the insertion occurs. For example, before a new sales order is automatically created from a quote coming from the CRM integration side, all parts, pricing, and customer information need to be validated before the sales order is created.
If the quote was rejected by the validation process, any modifications would need to be made to the quote or the ERP master tables before the sales order can be created.
4. Elements to be considered for integration and/or synchronization
In general, the best ERP- CRM integration practice covers the following areas:
- Customer activity history: invoices, shipments, payments, discounts, returns with CRM integration
- Serialized part identification
- Customer insertion and the finance department's acceptance of insertion
- Parts and prices
- Quote to sales order automation with CRM integration
5. Get Key Stakeholders Involved
Key users, finance employees, and executives need to determine the key CRM integration points for your particular company in order to ensure the important integration elements are correctly identified and targeted. In addition, the proper workflows for approvals in the CRM integration and ERP are part of the deployment strategy.
