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CRM ERP Integration: How does it work and should you do it

CRM

Can CRM be integrated with ERP?

Yes! And CRM ERP integration can do wonders for your business by streamlining your processes, improving quality of delivery, and reducing operational costs.

But it can also be quite complex, and there’s no standard way that fits all businesses. 

After helping over 60 clients implement SharpSpring CRM, we’ve realized that many businesses ask themselves whether the benefits warrant it, and where to start. In this post, we’ll summarize all we know, and help you clarify your next steps.

Article summary: Integrating CRM and ERP can be very beneficial, but it can also cause unexpected problems. Before integrating, you need to decide what type of integration you need and why: Syncing contact or order info, create more streamlined end-to-end processes, or improve decision making with better data. Be careful to avoid common mistakes such as unnecessary complexity, conflicting data, or forced standardization. By following the tips in this article, you’ll be able to decide what type of integration to build and how to get started.

ERP and CRM integration: What is it?

So what’s the difference between ERP and CRM systems and what data can be integrated?

A CRM system helps you manage your customer relationships - the front end of your business. An ERP system helps you manage customer fulfillment - the back end of your business.

CRM

ERP

  • Staying on top of potential new client sales.

  • Communicating with clients using templates and automations.

  • Managing, reporting on and improving your sales process.

  • Streamlining your sales process with steps, guidelines, material and templates.

  • Marketing to new and existing clients and detecting opportunities.

  • Fulfilling orders and managing delivery projects.

  • Optimizing your business and delivery processes.

  • Tracking back-end data such as financial reports and inventories.

  • Tracking supply chains.

  • Tracking cost of delivery, product configuration, and discounting rules.

CRM is used by your salespeople for selling, and by your sales management for managing the sales process and sales team. ERP is used by your back-office and operations in order to run your company and deliver your products and projects.

However, your business doesn’t run in silos, and information in one system can often be valuable for the other team.

For example, your sales team might benefit greatly from knowing about recent customer orders, projects, or inventory when selling. And your operational team can benefit greatly from understanding forecasts to manage inventory, and benefit from CRM information in the fulfilment process.

What is CRM in ERP?

Most ERP systems have a CRM component built in. This is good if your back-office functions are crucial to your sales process. For example, a salesperson managing retail channels will depend on ERP data such as inventory levels, fulfillment processes and current prices.

But most B2B businesses have sales processes that are mostly independent from their back-office processes. A CRM in ERP will be constrained by the ERP system’s requirements. Such constraints will make the CRM less flexible, less user friendly, and less user friendly.

By using an independent CRM and integrating it with your ERP for the processes that are relevant for both, you can unlock the full potential of your CRM while still retaining the connection between sales and operations. This will allow you to streamline your sales process, multiply sales effectiveness, and deliver effectively.

ERP CRM integration benefits

There are multiple ERP CRM integration benefits. Here are the most common:

Benefit A: Reduce admin work

Some information will necessarily exist in both systems. This includes basic info such as business names, contacts and addresses. But can also be information about products owned, orders placed, and financial data which can be helpful to both sales and for fulfillment purposes.

By integrating the systems, you’ll automate data transfer and reduce unnecessary administrative work.

Benefit B: Improve speed and quality of business

Manual admin work frequently leads to mistakes in data entry, or lacking data. Some information is important for sales to do their job, or for your back-office to deliver on the order placed. By automating data entry, you’ll remove mistakes that can lead to costly errors, and avoid the need to wait for a person to enter a piece of data before you can fulfill the client’s need.

For most businesses, such improvements will significantly improve their speed and quality of fulfillment.

Benefit C: Improve key account management

Your key account managers’ jobs are to maximize satisfaction and repeat business for key clients. This is difficult without easily accessible data about their clients’ orders, fulfillment, usage, inventory and finances.

By providing relevant information directly accessible in the CRM in a way that suits your account managers, they can target the right clients with the right messages, negotiate better, and improve the quality of their proposals.

Benefit D: Improve strategic decisions and react quicker to changes

Your ERP gives you valuable insights into your current client stock’s needs. But it can’t spot upcoming trends or future market needs. If you rely solely on ERP data for strategic decisions or your future direction, you’ll only be able to react once it’s too late.

In order to detect and react to changing market needs in time and make better strategic decisions, you need to incorporate CRM data such as market information and forecasting into your decision making processes.

Types of CRM ERP integration

There are many CRM to ERP integration types, and it’s important to understand them before you finalize your integration architecture.

Here are the most common types and situations they might be useful in:

Type A: Data sync

Data sync

If you just want certain information to be synced across your two systems in order to improve the quality of information, speed up your processes, and reduce admin work, then a simple sync might be enough.

Most common entities include:

  • Contact information: When a contact is created or updated in one system, it should be updated in the other.
  • Account information: Certain information about the accounts you’re dealing with need to be synced across so that the latest available updates are always included in both systems. This may include attributes such as billing info or address, but it may also include information such as total value of orders per year, products owned, and the most important inventory information that salespeople might need access to right from the CRM.
  • Product and financial information: Which products your clients own and use, what they’re paying, and information such as their inventory levels if applicable.

Type B: Product configuration

If you have product configuration in your ERP, it’s going to create duplicate work for sales people to enter the resulting quote into the CRM for forecasting and communication purposes.

We don’t recommend duplicating all your products from your ERP to your CRM. This will introduce unnecessary complexity, and limit your flexibility because you’ll need to consider two systems every time you want to edit or add new product types.

It’s better to keep the products table, configuration rules, and pricing information in one system (almost always your ERP), and sync across finalized quote information to the CRM once a proposal has been configured.

By integrating, your CRM can work with your ERP to streamline quoting and syncing data in order to improve forecasting and sales management.

Type C: Order fulfillment processes

Once a deal has been closed in your CRM, information needs to be sent to the ERP to fulfill the order. If this is done manually, it will delay order fulfillment and risk introducing mistakes. If you have a lot of orders, this can be a significant cost and reduce customer satisfaction.

By integrating the two systems, you can automate your fulfillment process and improve the speed and quality.

Even better, after an order has been fulfilled, information can be sent back to the CRM to kick off (or even automate) customer onboarding and training processes.

CRM ERP integration architecture

You can integrate your ERP and CRM systems in various ways. Here are the two most common:

Alternative A: Zapier integration (for simple integration needs)

If you just need to sync entity data, a Zapier integration might be the quickest and most pain-free way. Zapier allows you to integrate many popular ERP and CRM systems without much hassle, and you don’t even need to code.

Example: Integrate SharpSpring with Odoo using Zapier. Using Zapier, you can sync new deals from SharpSpring CRM to the popular open source ERP system Odoo, or trigger customer onboarding, retargeting or segmented newsletters in SharpSpring’s Marketing Automation when an order has been fulfilled in Odoo.

Alternative B: API integration

If you want to go all-in and create all the processes outlined in the previous chapter, you can use an API integration to connect your CRM and ERP systems.

The architecture behind a CRM ERP API integration can be quite complex, especially if the systems of your choice don’t have the capability to push field changes, but requires you to pull. This will force you to periodically (for example every 5 minutes) check for changes in the system that can’t push info. In order to avoid API call overruns, you’ll need to develop a sophisticated caching mechanism, comparing current changes with previous values, and only pushing those fields which have been edited. You’ll also need to handle conflicting changes within that time range.

If you’re interested in a CRM system that can integrate with your ERP, contact us and we’ll explain how we can help you.

QUESTIONS?

Issues with ERP CRM integration

Here are three issues you need to avoid when integrating your CRM and ERP systems:

Issue A. Overengineering

Know why you want to integrate. Don’t integrate just because you can. Instead:

  1. List the use cases you’d like to fulfill with your integration. Be as specific as possible. If possible, give examples of real-world scenarios you’d like to be able to achieve with the integration.
  2. Score each use case based on need and business value. Rank them based on total score. Then, check your list from top to bottom and include one at a time. Before including each one, ask yourself: “If I include this too, how much real world additional value will it bring my business?” As soon as you notice that adding one more feature will not significantly impact your business, stop and don’t include more use cases.
  3. Now check the new list from top to down, and for each one ask yourself: “Can I add this use case later, or do I have to include it in version 1 because it can’t be modularized?” Only include those features you have to include in version 1, leave the rest for later.

The results should be: A version 1 of your CRM and ERP integration with maximum amount of benefit that will be possible to realize with least amount of effort, complexity and in the shortest time to benefit as possible.

This is important because only the real world will tell you what you actually need. By limiting your integration to the least possible version 1 that will give you value, you will maximize your chances of learning what you actually need and will use in the real world, while minimizing the risk of developing something overengineered.

Overengineering is the no. 1 mistake we see in businesses that come to us for help with this, which is why we’ve placed such high emphasis on it.

Issue B. Handling conflicting data

The second issue is how to handle conflicting data.

Our default advice is that the simplest and good enough integration simply assumes that in cases of conflicting data, the ERP wins. This is because the ERP system is the backbone of your business, and it needs to be 100% accurate. A simple mistake might cost a lot of money in the form of a wrongly configured product, faulty delivery, or mistakes in invoicing.

However, if your sales team is also highly sensitive to their data being overwritten (in very special circumstances only), you need to develop a method detect when a piece of data has been edited in both the CRM and ERP simultaneously, and provide the user with an interface in which they can select which piece of data to use and which to overwrite.

Issue C. Forced standardization

Finally, we’d like to caution against what we call forced standardization. Sometimes, a process doesn’t need to be followed. This is especially true with your sales team. By salespeople to follow a rigid process based on the needs of the ERP system, you’ll limit your options when it comes to sales, introduce unnecessary workarounds to bypass real-life scenarios that you couldn’t account for when developing the integration, and limit creativity and deal-making which could cost you valuable business.

Rather than forcing standardization, it’s sometimes better to simply avoid automating certain processes, and instead leave room for creativity. You may lose a few minutes in extra admin every time a deal is closed, but in return you’ll retain a motivated, creative and flexible sales force who are not limited to make deals that will benefit your business.

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About the Author

Yusuf Young

Yusuf helps companies use Marketing Automation to grow B2B sales. In his role as a Marketing Automation consultant implementing systems such as HubSpot and Salesforce, he discovered the need for better services at a lower cost. Today, he runs FunnelBud to make the fruits of sales and marketing technology available to businesses worldwide.

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