There's a lot of talk about CRM and ERP integration among businesses today. Is it necessary? In many cases, these systems have been implemented separately and functioned well for years. Why take on the added cost and risk of bringing them together? For many businesses, it is more than worth the investment and effort. Since businesses use ERP systems for functions like managing receivables, inventory and finance, and CRM systems are used to manage relationship with customers, cross-sales and up-sales, imagine the information sharing and visibility a company could leverage by integrating these disparate systems.
In fact, there are a number of reasons why businesses should integrate their CRM and ERP solutions. Companies with high volumes of sales transactions see almost immediate benefits in the 'order to cash' process. Specifically, the cost savings come from reducing errors in order entry, implementing approval workflows for discounts, and reducing the manual labor required to enter orders in both CRM and ERP. Even organizations with lower order volumes, can experience significant cost reductions through improved order accuracy (reduced returns and lost shipping costs).
There are several marketing benefits associated with integrating CRM and ERP such as greater insight into the customer base. ERP systems store customers' financial relationship with the company; CRM solutions store their buying patterns and marketing demographics. Unifying these two sources of customer data can help organizations ensure that their sales, marketing, and service expenditures are targeting their most valuable customers and prospects.
Traditionally, it was difficult to integrate the systems because of the vastly different architectures in the solutions and the lack of standards for exchanging data between the systems. But this is no longer the case today. Microsoft provides direct integration between Microsoft Dynamics CRM andMicrosoft Dynamics GP through BizTalk server. Green Beacon has helped clients integrate Dynamics CRM with other Microsoft Dynamics solutions including Dynamics AX.
There are four key areas that every company should consider when integrating its CRM and ERP systems. Specifically :
- Contact Integration
While Organizations, Contacts, and Addresses (Billing / Shipping) are maintained in both the CRM and ERP applications, each is the master database of record for a specific type of account. The CRM application is typically the master for prospects and sales / support contacts while the ERP application is typically the master for billing and shipping contacts. The integration will need to support the business rules regarding how organizations, contacts, and address data is synchronized between CRM and ERP as changes are made in either system.
- ERP Product Integration
Products in the ERP application will need to be replicated in the CRM application. This is especially critical if sales quotes will be 'upgraded' to orders that could be transferred to the ERP application, since the product part numbers in the quote will need to match the items ordered. Some organizations have created mappings between high-level 'sales' products used for forecasts and specific line items used in actual customer orders; other organizations have implemented more complex product configuration solutions in CRM that allow reps to order from complex bills of materials and optional items that are configured in the ERP application.
- Quote and Order Management
Order management is only critical if users need to be able to upgrade existing quotes / forecasts to orders. Typically, organizations that leverage this type of integration use the CRM solution to drive revenue forecasts and generate customer quotes and proposals directly from within sales opportunities. Implementing Order Management in the CRM application requires that Product Integration be in place, and some customization to the standard quoting and forecasting tools in the CRM solution takes place, especially if complex product configuration is required.
- Product/Order/Invoice Repository Once an order has been completed, the order and invoice information can be replicated to the CRM application. Typically, this integration is used to create a repository of 'installed' or 'purchased' products which are linked to the corresponding orders and invoices.
Now is the best time to evaluate your options! Does CRM and ERP integration make sense for your business? Give us a call at (617) 485-5000 x207. We look forward to learning about your business needs.