Linking CRM and ERP: Good individually, unbeatable together!

Linking CRM and ERP: Good individually, unbeatable together!

Contents

  1. Why do you need a CRM and an ERP?
  2. What is an ERP system?
  3. What is a CRM System?
  4. What is the difference between ERP and CRM?
  5. Advantages of linking the CRM solution and the ERP system
  6. How are CRM and ERP related?
  7. What are bidirectional interfaces?
  8. Important tasks for integration

CRM and ERP are often separate worlds in companies. Meaningful joint use of data from both systems significantly improves internal cooperation. It allows a complete view of your customers and ultimately increases your business opportunities. By linking the two systems, you create enormous added value for your business.

Why do you need a CRM and an ERP?

Two colleagues meet in the cafe’s kitchen. One is enthusiastic: “You, yesterday we did a good job at Vis & Fils!” They haven’t paid their bill for the latest project yet.”

It’s good that the two spoke to each other, you might say. Unfortunately, purely by accident and, above all, too late. What if the sales colleague had known the customer’s current payment history? Perhaps he could have negotiated differently?

Frictional losses and blurred vision of the client. These are the unfortunate consequences when the left hand does not know what the right hand is doing. In this case: If sales does not know the important data from the ERP system or, conversely, no one from management to production and financial planning has an overview of what sales has recorded in their CRM regarding the customer relationship.

CRM and ERP have different tasks and strengths

CRM and ERP optimize internal processes. They are used in different areas of the business.

What is an ERP system?

ERP stands for Enterprise Resource Planning. With the help of the software, corporate resources such as capital, employees, and operating resources are controlled as needed and in accordance with corporate objectives. The ERP contains data from the Controlling, Human Resources, Materials Management and Procurement departments. ERP systems are used to manage business processes faster and more efficiently. The customer usually only appears under a customer number and with his address.

What is a CRM System?

CRM stands for Customer Relationship Management. CRM systems record all customer-related data and are used to design customer-related processes. It’s all about taking the most holistic view of the customer possible: all contact history is (ideally) displayed there on a daily basis and made available for sales, marketing and service activities.

What is the difference between ERP and CRM?

ERP and CRM manage different functions. While an ERP system in the company is mainly used for resource planning and provides important key figures for stock levels, financial accounting and production planning, a CRM system focuses on customer management and associated processes such as sales control and service and marketing management.

Both systems have their strengths and cannot replace each other. The data collected in the CRM system goes far beyond storing the data in the ERP software. On the other hand, ERP systems provide important key figures on stock levels that are not recorded in CRM systems.

What is often missing is smart teamwork between CRM and ERP. The current 2020 CRM study shows that many companies continue to store data in parallel in 2-3 systems instead of creating appropriate connections. These silos and island solutions slow down employees in their daily work. No one can afford it anymore in an increasingly digitized world in which B2B customers think and act like consumers

Advantages of linking the CRM solution and the ERP system

Customer expectations are changing rapidly. If you want to keep up with this evolution or stay ahead of the game, you need a holistic, up-to-date view of your data anytime, anywhere. The advantages of system coupling are obvious:

360 degree view of the customer

A well-thought-out interaction between the two systems allows many synergies. Double maintenance of data is no longer necessary. Sales reps who have access to warehouse or accounting data advise customers more competently. In general, the risk is minimized of different departments working with different information. This way, the company speaks to the customer with a unified voice and knows their current status at all times.

Assessments and reports

ERP systems are not made for customer management. But they contain valuable data. In combination with the sales data, comprehensive evaluations can be made and viewed in the CRM. This not only increases the chances of successful sales. This also enables the management to identify important trends, for example with the help of sales forecasts, or to counteract possible undesirable developments at an early stage.

Faster response times

By linking the systems, your employees can access important data in real time. For example, field staff can view inventories directly on site at the customer and understand production lines. There is no active coordination with other departments. Bottlenecks are also noticed more quickly and any errors can be discovered more quickly.

How are CRM and ERP related?

In order for you to make optimal use of your company data and the functions of both systems, a separate interface between the two systems is required. This avoids double data maintenance. Systems are best linked through a two-way interface.

What are bidirectional interfaces?

Bi-directional interfaces allow all data from one system to be displayed in the other system. If a CRM is connected to the existing ERP software via two-way interfaces, both user groups benefit from data from the other system. Data from ERP, such as delivery status and open items, can be displayed in CRM. In turn, important data from the CRM systems, such as orders and addresses, is automatically transferred to the ERP. On the one hand, it makes data entry easier. On the other hand, the relevant data from the CRM can be processed in the ERP systems. It is not only more convenient, but also saves part of the licensing costs.

Example: A salesperson only sees a customer’s sales in the ERP if he has a license for them. By connecting to the CRM software, he has all the information in one place and can access it at any time.

Important tasks for integration

If you are lucky enough to configure CRM and ERP at the same time from scratch, you can think of both worlds together from the start. In many companies, however, it happens that an ERP system that has been in use for many years forms the basis for connecting the CRM system. Or that the two systems “walk” side by side without a connection for a long time. Connecting them in a thoughtful way without losing valuable data or incurring high costs is not trivial. The following aspects should therefore be on your to-do list:

  • Plan well: Are the most important prerequisites correct: is the information used by your employees? Do both systems have central entities such as customer number? Which stakeholders do you need as support to make the project a success?
  • Evaluate the software carefully: Well-known ERP providers also have CRM modules in their range. But the promise of getting everything from a single source can backfire, for example, if expensive reprogramming becomes necessary. With the best-of-breed approach, you absolutely have to pay attention to what types of interfaces the vendor provides for which ERP systems.

What is the best-of-breed approach?

With the best-of-breed approach, the most appropriate software solution is used in the IT field for each business objective. With this approach, companies combine software systems from different manufacturers. If, on the other hand, a company relies on a complete solution, then it is called a suite approach.

  • Select data specifically: To what extent and in what sense should data be exchanged between ERP and CRM? When does it make sense for both parties to have access to information?

Example: Sales can inquire about current delivery times in the CRM or view the delivery status. Conversely, employees can automatically retrieve important customer data from CRM software.

Our advice
If you are wondering which functionalities belong to the CRM and which to the ERP system, the following questions will help you:

  • Who are the primary users of these features and what license do these users have?
  • Does the feature already exist to some extent in any of the systems? How good is this solution?

Conclusion: Combine CRM and ERP

Unleash the full potential of your software systems. An interface between ERP and CRM offers you two main advantages:

  • Easy connection

Existing ERP software can be connected to the CRM. This means there is no need to integrate a new system or rewrite data. The investments already made in the existing system have not been in vain.

  • Efficient work

Maintenance and data entry are made easy. Usage and information are in one place. Instead of “searching” in different systems, every business user can find everything in one place without having to switch systems.

Example: Suppose a customer request comes into CRM via a service ticket and a service order is created directly from this data. This saves the user time and does not have to re-enter it into the ERP system.

If you do it right, CRM and ERP form a real dream team and create enormous added value for your business.

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