CRM AND ERP

NITHIN RAJ

School of Management Studies

CUSAT- Kochi- 22

[email protected]

Abstract: A CRM system deals with front-end information - managing valuable customer data and enriching it
through interactions with marketing and customer support. This helps businesses understand prospects and
clients, manage relationships and sales pipeline, and upsell and cross-sell products.

An ERP system handles critical backend information - generally managing customer information that is required
once orders have been placed. This can include purchase history, billing and shipping details, accounting
information, financial data, and supply chain management details.

Both client relationship management and enterprise resource planning systems independently offer substantial
benefits to businesses. Employing a powerful integration solution allows for connectivity between the two,
providing even more advantages to businesses.

Keywords: CRM, ERP, Integration

CRM at its simplest is systems and processes for managing a company’s interactions with current and potential
customers. CRM software is used to organize, automate and synchronize sales, marketing and customer service.
CRM has developed to include all areas of the customer experience, keeping the customer happy and in turn
keeping them loyal and more valuable to your business. It is the process of identifying potential leads/prospects,
nurturing them and guiding them through the sales process to close the business. Once they are a customer it is
ensuring that you maintain that relationship and encourage repeat business – either more frequent orders or
higher value.

Where CRM manages the customer, ERP is used to manage the business. ERP is a system for improving the
efficiency of business processes. Like CRM, ERP allows for the rapid sharing of standardised information
throughout all departments. Employees all enter information into the ERP system, creating a real-time,
enterprise-wide snapshot. Problems in any area will automatically create alerts in other affected areas. This
allows departments to begin planning for issues before they become a problem in that department. In short, by
allowing the business to focus on the data, instead of the operations, ERP provides a method for streamlining
business processes across the board. Microsoft Dynamics ERP can directly integrate with Dynamics CRM.

ERP and CRM systems use different approaches to increase profitability. ERP focuses on reducing overheads
and cutting costs. By making business processes more efficient, ERP reduces the amount of capital spent on
those processes. CRM works to increase profits by producing greater sales volume.

2. CRM

From a software perspective, CRM allows you to centrally record a number of things that are currently stored on
spreadsheets, notepads, phones and in people’s heads to make sure everyone is aware and everyone is working
to the same goal – providing a better customer experience and winning more business. CRM systems as
standard can:

Centralise all customer information

This allows you to centrally store all the contact information, all the relationships (within your organisation and
with other organisations)

Record all communication

important emails, phone calls and letters as well as the marketing activity they have received. This can be from
everyone in the organisation so you know who said what and removes the need for forwarding/CC’d emails to
lots of people internally.

Manage all quotes/orders

the number of quotes sent, any revisions, the number that have been converted to an order. Get an idea of who
has the best win/loss ratio as well as finding the customers who ask for quotes but never convert to orders.
Manage all cases/complaints

make sure everyone who speaks to a customer knows of any issues the customer is having. Resolve the issue
quickly and make sure a sales rep knows about any active complaints before they attempt to sell to the customer
there is nothing worse than a salesperson making a sales call oblivious to a complaint.

3. ERP

The term ERP evolved from MRP software, that is, Materials Requirements Planning software which was first
developed in the 1960s to help manufacturers plan production and schedule the inventory needed for that
production. With MRP, it was the planning that provided the most benefit to manufacturers. Rather than having to
hold expensive inventory and incur the additional cost of storing and securing this inventory until the products the
manufacturer sold needed to be produced, MRP software was able to forecast production based on historical
demand and predict when inventory should be purchased to be produced to meet future demand. This saved
manufacturers a lot of money and made the production and supply chain a lot more efficient.

In the 1990s, many companies sought to replace their old software systems, largely spurred by worries regarding
the Millennium Bug and this was when the term ERP was coined to define the more modern and all embracing
business management software. Whereas, MRP software focussed on manufacturers and managing the
production process, the new breed of software focussed on finance because it was determined that finance,
essentially the making of profit, is at the heart of every business and therefore can be applied to every type of
business, not just manufacturers.

But like MRP, it’s the ability to plan that makes ERP software unique. ERP stands for Enterprise Resource
Planning. In current ERP software, a resource stands for any asset in a business that that business wants to
manage. This can be inventory, it can be the business’ customers, the business’ money or the business’ people.
In fact, it can be any resource that that business specialises in, that that business values and makes profit from.
Having the ability to plan a company’s resources from a financial perspective gives a company’s management
team a lot more control over the business and how it is operating. It also gives that management insight into
areas where the business can improve to achieve its objectives, whether that is to better the customer
experience, become leaner and make more profit or expand into new business territories or divisions.

By deploying ERP software, management can control finance, sales, production, customer service, distribution,
warehousing, logistics, employees and inventory all in one software application. By containing all these different
operations in the one application, companies avoid the duplication of data in different systems and can track
productivity from each end of the business.Now, new ERP software which is mobile and can be cloud based
extends even further into the business by focussing less on functionality and more on achieving results through
improved communication, collaboration and business process automation.

This is why ERP seems complicated. It keeps getting bigger and bigger, more all encompassing as it takes over
more of the management of a business but essentially ERP is simple: it is software that manages the finance of a
business to help management plan to improve the profits of that business.
4. Reasons to Integrate CRM and ERP

1. Consolidated Sales Process

One daunting challenge for any manufacturer is managing the different channels of sales, namely, direct sales
and distributor sales. Not only are you trying hard to build a strong and successful relationship with your
distributors so that they push your products, but you also are supporting your own sales teams to sell. So what
happens when your sales team and your distributor have a face off for the same project? Sometimes the
manufacturers are not even aware of this overlap, or they get to know when it’s too late. A well implemented and
integrated CRM and ERP system is smart enough to tell you in advance if such a scenario is likely to arise.

2. A complete view of your customer

In any business, knowing your customers is crucial. One of the most important advantages of the integration of
ERP and CRM is an in-depth view of your customer. From lead to prospect, from sales and to after sales support,
from finance to accounting, together these systems provide complete visibility into your customers’ needs, habits,
buying patterns, order and transaction history, preferences, etc. This visibility is helpful as a lot of insights can be
culled. Also, you can use this data to forge long lasting relationships with your customer, and accordingly, make
more effective pitches in the future.

3. Better access to important Information

Availability of real time data can boost productivity and save time. Let’s look at an example for this. When a
customer calls the call center and asks for some information, if the required data is not available at the click of a
button, the employee may have to access more than one data systems, thus wasting precious time at both ends.
No employee should ever have to juggle data and important information; they should always be accessible to
him. This is possible with an integrated ERP and CRM system. The employee will thus be able to answer queries
promptly and accurately

4. Improved forecasting and visibility

Forecasting becomes a nightmare because no one version of the truth exists. There could be duplicate entries
and/or single entries. Since there’s no single data warehouse, it becomes difficult to get unique transaction
codes. So what happens is employees will spend extra time to make sense of the data. All this can be avoided by
integration of the two main systems, ERP and CRM – where customer data and company data coexist – a one
solid database exists. Some good examples of software that successfully do this are SAP and Salesforce. In fact,
the software can be customized to your industry and size of business.

5. Streamline Business Process

Workflow management capabilities of today’s ERP and CRM software systems allow you to organize and
automate business steps and process, which were previously done manually and much more slowly than what’s
possible today. CRM systems have robust workflow tools that facilitate automation and implementation of best
practices for marketing, sales and services. ERP systems offer similar workflow tools, but for back-office
functions.
When the CRM and ERP systems are automated, but only individually, addressing end-to-end business
processes may get complicated. For instance, if a sales person raises a quote for a product that is out-of-stock,
and coverts the quote into a customer order, the error may get detected only at a later stage, say, at shipping.
The order will have to go back to the salesperson for correction and then be reprocessed by the finance
department.

This in return causes delay in delivery to the customer and increases administrative costs to the company. For
this very reason, combining tools from both ends of the business becomes important.

6. Improved Task Management

In most organizations, the calendar capabilities are usually provided by the CRM application. Now imagine, if
these functions can somehow be linked with the ERP applications, which will enable an overall view of the entire
company. Integrating the CRM and ERP applications, as done by SAP, Salesforce or the like, can enable sharing
calendar information to quickly and easily schedule group meetings or giving the company an overview of
individuals’ tasks. This integrated task management functionality allows organizations and individuals to
automate monitoring tasks, review where they are in the completion of tasks, clearly demarcate responsibilities
and prioritize tasks in order to improve accountability

4. CRM -ERP INTEGRATION

―CRM ERP integration‖ can mean a lot of different things to a lot of different people. Since this is a such a broad
characterization of the interoperability of disparate systems, it is helpful to break the topic of CRM to ERP
integration into its different components or touchpoints in order to better define what ERP integration really
means for a specific organization.Some ERP to CRM integration touchpoints can be handled by the default
functionality within an off-the-shelf CRM to ERP integration package. While these types of packages can
significantly simplify certain integration components, there’s always some level of configuration required. Also,
the ―one size fits all‖ solution may not always be exactly that — modifications to core integration functionality may
need to be made.

Other integration touchpoints may require custom functionality to be built out, because a particular integration
requirement is not common enough for an integration package vendor to have pre-baked it into their solution.

It’s important to identify each potential integration touchpoint and then determine whether a given touchpoint
applies to your business. If it does, the next step is to determine whether the benefit to that particular connection
outweighs the cost of implementing or developing it. Let’s look at some common CRM ERP integration
touchpoints.

1. Creation of an ERP Customer Master Record From a CRM Account Record

If your company is in a high sales transaction business and your sales team is signing up many new customers
every day, there are identifiable benefits to automating the process of turning a CRM account into an ERP
customer. This integration could save a lot of time compared to the current process of, for example, the sales
department emailing new customer information to the accounting department and then someone in accounting
manually entering each new customer into the ERP system.
However, if your company sells a high ticket item and you only acquire one or two new customers per week, you
might want to consider whether it makes financial sense to automate this process.

2. View Customer Financial Summary Information in CRM

This is one of the most common integration touchpoints between ERP and CRM. It is also standard in most pre-
packaged integrations as it’s one of the easier integration touchpoints to technically achieve. As long as a CRM
account record has an ERP customer ID, fields such as YTD Sales, MTD Sales, A/R aging and a Credit Hold flag
can be mapped across into a CRM Account record.

3. View Invoice History and Sales Order History in CRM

As with Financial Summary information, invoice and sales order history is a common and relatively easy to
achieve integration touchpoint. This involves more structure in the CRM database as these transactions
represent many-to-one information. A given account can have only a few or it can have a lot of related
transactions.

4. CRM Quote to ERP Order

Before deciding whether this integration touchpoint makes sense, it should first be evaluated whether the CRM
system that you are planning to implement:

a) can handle your existing quotation process with out of the box functionality

b) requires a third party CRM add-on to support the complexities of your quoting process

or

c) your sales quoting is such an ad hoc process, that you should continue to use applications such as Word or
Excel for your sales quotes

The other area to evaluate is whether your ERP inventory and non-inventory items would even be manageable
within a CRM sales quoting system. For example, if you have fewer than a couple of dozen inventory items in
ERP that are relevant to sales quotes, it’s likely that those items could be easily managed within a CRM sales
quoting system. But what if you have hundreds or even thousands of inventory items in ERP, any ones of which
could be quoted to a prospect or customer? This quantity of items could render sales quoting within CRM — and
therefore the whole idea of CRM quote to ERP order — impractical. Your existing sales quoting system may
continue to be the best option, even with a new CRM system in place.

5. Field Service Integration With CRM

Because most CRM systems have Case management functionality, it often makes sense for field service
representatives (FSRs) to be CRM users. If a company sells the type of product that means resolving a customer
Case may require dispatching an FSR to the customer site, certain support Cases can be reassigned to FSRs. If
an FSR needs to replace parts on customer-owned equipment, the FSR may need to provide a quote to the
customer for repair and the quote may include ERP inventory line items.
Repair quotes are not normally a standard part of CRM functionality, so this process will likely not be included in
pre-developed CRM to ERP integration packages and would have to be custom developed.

6. Integrated RMA Management

An RMA request is often originated from a CRM support case. If a customer support representative cannot solve
a customer issue via phone or via remote diagnostics, a new part or a new unit may need to be shipped to the
customer. Alternatively, the defective part may need to be shipped back for repair and then returned to the
customer. The way RMA processing is handled can vary considerably from company to company, so this is often
a CRM to ERP process that needs to be customized — and this can be one of the more involved (i.e. more
expensive) customizations. Depending upon the volume of RMA requests, this may or may not make financial
sense to develop as an integration touchpoint.

7. Professional Services and Other Time Billing

While (PSA) Professional Services Automation functionality within a CRM system is often accomplished with a
third party add-on, if this type of functionality is added to a CRM system, another integration touchpoint might be
the integration of logged, hourly or daily professional services into ERP for customer billing. This integration
touchpoint is one that would likely require custom development.

8. Other CRM ERP Integration Touchpoints

There may be additional touchpoints that you have envisioned for your organization that are not included in the
above sections. As you go through the CRM buying and requirements process, it’s important to break ―ERP
integration‖ into its various components. By doing this, you will be able to more precisely communicate your
requirements to a CRM services company representative, who can then communicate pros and cons as well as
estimated overall costs.

5. CRM to ERP Integration and integration Challenges

Some of the current challenges for end customers with respect to integrated and unified CRM and ERP are:

1. Legacy accounting and ERP systems often don’t have the fully developed APIs or robust internal
development languages conducive to smoothly functioning, low maintenance integration with CRM.

2. Companies that acquire both ERP and CRM applications don’t do as good a job of integrating the CRM
and ERP systems that they own as people generally expect among products that are ―under one roof‖.

3. Even when a CRM to ERP integration works well, it may seem ―half-baked‖ to certain customers, since
there’s not visibility to all key ERP data within CRM, for example. Or, important integration touch points
may be missing in the current release of the integration. With a unified system, the visibility problem
goes away and the need for additional touch points between CRM and ERP functionality can typically be
addressed with the creation of simple workflows.
 4. When an ERP vendor develops CRM functionality that’s native to its platform(s), the CRM functionality
is usually much more basic and sometimes less intuitive than the functionality available in standalone
CRM systems.

5. Native ERP functionality built by a third party on top of a CRM platform may not offer the full range of
capabilities that are available in more mature standalone ERP systems that have evolved over a decade
or more. Also, developers of native accounting and ERP functionality within CRM are bound to a CRM-
style UI and navigation by default and, for certain components of their user interface, need to develop
fully custom pages within CRM. This comes at a development and maintenance cost.

6. CRM companies, for the most part, don’t offer their own ERP functionality because ERP is too far
outside of their core competency.

It’s worth pointing out that integrating a standalone ERP system with a standalone CRM system — whether both
systems are owned by the same vendor or not — can have multiple cost components, including:

 Integration middleware
 Initial setup
 On-going maintenance (with possible peaks in cost after version upgrades of legacy client/server
applications)

These costs tend to be more pronounced if one or both of the systems are traditional single-tenant solutions
(whether running on-premises or hosted on a virtual server somewhere in the cloud).

Multi-tenant cloud CRM to multi-tenant cloud ERP integrations are generally less expensive to set up and
maintain due to more contemporary APIs, the lack of firewall issues and the absence of disruptive upgrades that
are still common with legacy single tenant solutions.

6 Vendor Solutions for CRM to ERP Integration and Unification

NetSuite

NetSuite was the first vendor to popularize the concept of unifying ERP and CRM within a single cloud-based
solution. NetSuite is generally regarded to have provided comprehensive functionality in customer support, a key
component of CRM. However, while NetSuite had the opportunity to deliver both robust ERP functionality and
highly adoptable, native sales force automation functionality (SFA) within a single platform, the application’s SFA
component has yet to make a strong name for itself in the CRM space.

Microsoft Dynamics CRM and ERP

Microsoft’s Dynamics suite of solutions currently consists of CRM, Social Listening, Marketing and four ERP
products: AX, GP, NAV and SL. While Dynamics CRM was developed internally at Microsoft, all four ERP
products were acquired. Microsoft ostensibly has the inside track on integrating Dynamics CRM with its own ERP
products, but the company is still in the position of connecting systems of different origins.
Other CRM vendors such as salesforce.com and SugarCRM have a nearly equal opportunity to integrate their
systems with Dynamics ERP products.

Salesforce

Several companies have leveraged the Salesforce platform to develop native accounting and ERP functionality
within Salesforce. The user interface is a combination of Salesforce’s standard layouts and navigation – and
Visualforce pages which give the developer full control of the UI and navigation within a page. Accounting Seed
is an example of an accounting and ERP application that is 100% native on the Salesforce platform. This app is
designed for small to mid-sized businesses. Because it’s built on the Salesforce platform, its functionality can be
extended with the same tools that are used to extend Salesforce’s CRM functionality. If Accounting Seed
provides virtually all the accounting or ERP functionality that a given organization needs, this might represent the
closest thing available to a holy grail of unified CRM and ERP for that organization.

Sage

Sage is a company that has grown through acquisition. Popular accounting and ERP products in the North
American market include Sage 50 Quantum, Sage 100 ERP, Sage 300 ERP, and Sage ERP X3. For years, Sage
was in the unenviable position of owning three products in the contact management & CRM categories. However,
the company shed both ACT! and SalesLogix in 2013, leaving only Sage CRM, which should simplify the
company’s integration strategy moving forward. Sage initially developed its own integration between Sage CRM
and Sage 100 ERP. However, a third party integration solution from Greytrix has been used by many companies
as an alternative to the ―factory‖ integration. In late 2015, Sage released Sage Live, a small business accounting
system built on the Salesforce platform.

Infor

Since Infor was founded, the company has acquired over 30 different companies, many in the client/server ERP
and MRP space. Infor became a reseller of Salesforce back in 2011 and had started down the path of integrating
Salesforce with some of its ERP offerings. However, in 2014, Infor purchased the SalesLogix product from
Swiftpage, presumably since SalesLogix (now ―Infor CRM‖): Aligns more closely with the company’s portfolio of
single-tenant applications Gives Infor full control over the direction of CRM and how CRM integrates with the
company’s other products Provides higher CRM product margins for the company, its salespeople and its
partners Infor offers its own middleware called ION (Intelligent Open Network) for integration within its own
product suite and for integrating with non-Infor apps.

Intuit

Like Infor, Intuit at one point became a reseller of Salesforce. Intuit has been offering Salesforce for QuickBooks,
which includes integration to QuickBooks online. However, the ―difficult‖ decision was recently made to close the
Salesforce for QuickBooks service as of December 3, 2014. Since the traditional on-premises version of
QuickBooks is an extremely popular accounting system, the question often comes up, can I integrate my CRM
system with QuickBooks? The general answer is, you can, but some of the integrations with traditional
QuickBooks work better than others. This is due to the fact that QuickBook does not have the APIs or built-in
tools to facilitate a robust integration. For Sugar customers, a company named Epicom seems to have solved
some of the issues that can exist with QuickBooks integration.
Xero

Xero is a cloud based accounting solution that’s advertised as a QuickBooks alternative for small businesses. On
its CRM add-on page, Xero displays third party integration offerings for a variety of CRM systems.

Intacct

Intacct, a cloud-based accounting solution, has positioned itself as an alternative to NetSuite, Microsoft Dynamics
GP and Quickbooks. Intacct also promotes its integration with Salesforce. For Sugar customers, there are a
number of Intacct integration options listed on SugarForge and SugarExchange.
 7. REFERENCE

https://www.sysco-software.com/crm-vs-erp/

https://www.workwisellc.com/erp-software/3-key-benefits-erp-crm-integration/

https://suyati.com/blog/advantages-of-crm-and-erp-integration/

https://www.crmswitch.com/crm-integration/crm-erp-integration-unification/

https://www.crmswitch.com/category/crm-integration/

https://www.crmswitch.com/crm-integration/crm-erp-integration-meaning/