Is Integrating a New CRM Solution With Your Current ERP System Worth the Trouble? - CRM Software Blog

As you are searching for a customer relationship management (CRM), one thing to keep top of mind is how it will work with your current business management solutions, including your enterprise resource planning (ERP) software. While there are countless benefits to integrating your new CRM solution with your ERP solution, there are also a number of drawbacks and potential pitfalls to be aware of before you jump into an integration project with two feet.

So how do you know if integrating your business solutions is worth the risk?

Alesa Lightbourne, Ph.D. addresses this very issue in a new white paper published by Socius, an Ohio-based Microsoft CRM and ERP partner, entitled: “Integrating Your ERP and CRM: Worth the Trouble?”

The white paper cites industry analysts and researchers as well as business executives who have successfully integrated their solutions and are reaping substantial returns on their investments. Both Neundorfer, a clean technologies company near Cleveland, Ohio and Divisions, Inc., a facilities management company outside of Cincinnati, Ohio are featured in the paper as examples of organizations that have streamlined business processes and financially benefited from integrating Microsoft Dynamics CRM with their Microsoft Dynamics GP ERP solutions.

Download a complimentary copy of “Integrating Your ERP and CRM: Worth the Trouble?” and hear directly from Neundorfer and Divisions how their integrated solutions are benefiting their organizations through extended case studies and a testimonial video.

By Socius, a Microsoft Dynamics CRM partner in Ohio, Kansas City, and California

Mike Lima

September 23, 2010 at 5:01 am

Hi,

The Socius1 white paper is necessarily brief and picks up only a few good examples of ROI calculations that any director worth their salt should have handy.
There are however other considerations to be made about the ramifications of ERP+CRM integration, which are tricky to put a price tag on. My favourite is audit requirements.

Over here in the UK, accountants and other professional in the finance area are bound/guided by generally accepted accounting principles. The key one of them is that the finance guy has to be a pessimist... "show me the money" might be their rule for accepting some transaction to be entered in to their pristine and error free ledgers...

The people working in sales have the opposite outlook on forecasting sales. They are expected to populate their CRM activities and forecasts with everything they can gets their hands on, and then qualify out, filter out the bad opportunities and expect a high share of failed opportunities between qualification, ordering and the eventual arrival of cash. It is common for sales directors to demand that the sales pipeline is 3, 4, 5x the sales objectives for the period. Clearly there is a lot of sales that will NOT result in cash inflow and are entered into your CRM as work in progress with a date that would fit in your current financial year.

If your CRM and ERP are 2 applications working together in real time, each other feeding and updating database fields kept by the other, then there will certainly be a moment in time when the finance audit will come across the optimistic forecast of the sales teams, and will begin wondering how much of the rest of all cash inflows are good, GAAP-approved estimates, and how much of it are sales people pulling numbers out of... well, you know...

I have some experience with MS ERP and CRM and if I were to make such decisions for my own company, I'd keep the systems apart. I'd have the CRM licenses for the CRM users (they're cheaper!), ERP licenses for the manufacturing, finance, etc... and both licenses for those guys who need to have their hands on the whole of the business.

Instead of real time integration, I'd put my money on regular batch jobs to synchronise the address books on both applications, feeding the "credit score" and "payment history" fields (those that socius1 uses as a key example) from ERP to read only fields on CRM. Part of the time & effort savings would be achieved without getting the opposing mindsets of finance and sales fighting it out and making forecasts even harder to prepare.

PS: Check your dictionaries before replying, as there is a lot of people out there who think that a batch CSV import/export is an exmaple of "integration".

1 thought on “Is Integrating a New CRM Solution With Your Current ERP System Worth the Trouble?”

Mike Lima
September 23, 2010 at 5:01 am

Hi,

The Socius1 white paper is necessarily brief and picks up only a few good examples of ROI calculations that any director worth their salt should have handy.
There are however other considerations to be made about the ramifications of ERP+CRM integration, which are tricky to put a price tag on. My favourite is audit requirements.

Over here in the UK, accountants and other professional in the finance area are bound/guided by generally accepted accounting principles. The key one of them is that the finance guy has to be a pessimist... "show me the money" might be their rule for accepting some transaction to be entered in to their pristine and error free ledgers...

The people working in sales have the opposite outlook on forecasting sales. They are expected to populate their CRM activities and forecasts with everything they can gets their hands on, and then qualify out, filter out the bad opportunities and expect a high share of failed opportunities between qualification, ordering and the eventual arrival of cash. It is common for sales directors to demand that the sales pipeline is 3, 4, 5x the sales objectives for the period. Clearly there is a lot of sales that will NOT result in cash inflow and are entered into your CRM as work in progress with a date that would fit in your current financial year.

If your CRM and ERP are 2 applications working together in real time, each other feeding and updating database fields kept by the other, then there will certainly be a moment in time when the finance audit will come across the optimistic forecast of the sales teams, and will begin wondering how much of the rest of all cash inflows are good, GAAP-approved estimates, and how much of it are sales people pulling numbers out of... well, you know...

I have some experience with MS ERP and CRM and if I were to make such decisions for my own company, I'd keep the systems apart. I'd have the CRM licenses for the CRM users (they're cheaper!), ERP licenses for the manufacturing, finance, etc... and both licenses for those guys who need to have their hands on the whole of the business.

Instead of real time integration, I'd put my money on regular batch jobs to synchronise the address books on both applications, feeding the "credit score" and "payment history" fields (those that socius1 uses as a key example) from ERP to read only fields on CRM. Part of the time & effort savings would be achieved without getting the opposing mindsets of finance and sales fighting it out and making forecasts even harder to prepare.

PS: Check your dictionaries before replying, as there is a lot of people out there who think that a batch CSV import/export is an exmaple of "integration".

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