How CRM ERP Integration Works – Part 1

For many companies, the decision to invest in a new CRM system goes hand in hand with the question of whether and how existing ERP applications should be coupled with the new CRM software. Read in the first part of our guidebook article when it is worthwhile to technically marry both systems.

The Different Tasks of CRM and ERP

CRM systems are known to support the mapping and design of customer relationships and customer-related processes, such as sales control and service and marketing management. ERP systems, on the other hand, are responsible for other tasks such as production planning and control, financial accounting or warehouse management. They are – as the name “Enterprise Resource Planning” already says – intended for the planning and control of various resources of a company.

For ERP, the areas of procurement, sales, materials management, finance and human resources are process-oriented focal points. The customer or supplier only plays a role to the extent that it requires the data integration of the upstream and downstream application areas. The focus is not on relationship management, but on process efficiency. Customer number and address are usually sufficient here. The customer as an interested party or potential target group, for example, is not of interest for an ERP.

In the CRM system, the information collected in the past can be used for current actions. The history of leads, prospects and customers is recorded and made available with a sophisticated information management system for current and future further processing in marketing, sales or customer service. For example, depending on the specialist department, it is interesting to identify new potentials as quickly as possible and to be able to exploit them as safely as possible. In marketing in particular, a 360° view of prospects and customers ensures targeted customer communication. CRM therefore focuses on the holistic view of the customer, but also on competitors or suppliers.

The following insight is decisive for the question of CRM-ERP integration: Although both systems partly use the same data, their tasks and users differ significantly. Nevertheless, intelligent coupling results in added value for all users. In order for this to work, some rules must be followed.

Interface Between CRM and ERP Creates a Strong Team

An ERP system cannot provide the information used in a CRM system for a competent and individual approach to customers and business partners as well as functionalities that make work easier, such as cross-departmental activity management – but it can provide valuable figures. However, the processing possibilities of the figures in the ERP system are often limited. CRM systems, on the other hand, offer extensive and flexible options for evaluations and reporting. This already shows: CRM and ERP are only particularly strong together!

The ERP system provides the data, the CRM system displays it in context and analyzes it in detail. On the one hand, this provides the sales department with numerous evaluations of the purchasing behaviour of customers, which it can use to act in a targeted manner. On the other hand, the management can use the CRM as a central information platform for all customer-oriented business areas. Based on current real-time data, well-founded decisions can be made and better planned for the long term.

Users Benefit from Bidirectional CRM ERP Interface

Such use of data from one system in the other is most effectively only possible via a neatly set up interface between the CRM and ERP systems. The benefit is not only the avoidance of double data maintenance.

If the interface is created bidirectionally, both user groups benefit from information from the other system. If a clerk creates a new order in the ERP, for example, the order header data maintained in the CRM system, ordered delivery items, commercial information and the necessary customer data are transferred from the CRM system to the ERP system automatically or at the push of a button. Conversely, sales employees can inform themselves in CRM about current delivery times or query the status of current orders. Data sovereignty is guaranteed according to the individual requirements and specifications of the company. On which side which parts of the process are handled has to be considered already during the conception of the interface.

Current Data under a Uniform Interface

By using an interface, key data such as customers, contact persons, articles, sales documents and statistics are available for both user views under a familiar, uniform interface, regardless of where the data is stored.

Data transmission is usually carried out via automated interfaces. A synchronization option either as batch processing at night or when required – and then usually only for individual data records – at the push of a button by authorized users additionally ensures that the customer data in both systems is always up-to-date.

CRM ERP Data: Kept Separately, Yet Interchangeable

In general, certain data should be kept exclusively in the ERP system, others exclusively in the CRM system. The decisive factor is to what extent and in which direction the exchange between ERP and CRM takes place.

The classic data, which are usually queried and exchanged by CRM and ERP, are among others

  • customer master data that, when updated, is reconciled in both systems
  • product/material master data from ERP, e.g. for price calculation when creating quotations in CRM
  • currencies, payment and delivery terms, prices and price lists required for an offer
  • but also the contact person as invoice recipient or the payment status.

In particular, quotation and order data, including the scope of delivery, must be able to be exchanged dynamically via the interface in order to display the current order status in both systems.

But also the classic accounting data and information such as commercial data from financial accounting, e.g. tax type, dunning data, invoice data, credit notes, due dates etc. can be sensibly included in the interface scope.

When is a CRM ERP Integration Worthwhile?

CRM-ERP integration is the ideal solution if the company has a sufficiently large customer base, the order throughput is sufficiently high and a coupling of the systems offers decisive efficiency advantages for the company – for example through the (partial) automation of incoming orders. Another argument for integration that should not be underestimated is the elimination of system breaks: Specialist departments such as sales often have difficulties moving within the bulky interfaces of an ERP. Their tool is CRM, in which they can see the interesting ERP data via a link.

In principle, it always makes sense to consider the individual requirements and possibilities of a company, which determine the effort and investment in a CRM-ERP coupling. The least practicable is the parallel operation of ERP and CRM systems as two independent island solutions.

Coming up Next…

The second part of our article focuses on the requirements, the technology and the introduction of a CRM-ERP interface.