This book is about how to build a CRM integration with your ERP. In this chapter, we talk about what we mean by CRM integration and the different ways that it can be good for your business.
To get started, we briefly discuss some terminology and concepts that will be used throughout the book: users, user roles and teams, and security in a CRM application, and why they are affected by integration. We will then explore the benefits of different business workflows in CRM and how they become more powerful when they become integrated business workflow. We will also talk about specific areas of CRM functionality and how they benefit from being integrated with ERP.
Finally, at the end of this chapter we will explore how what we have discussed can be applied to your business.
Even though every business manages their customer relationships, not every business has a CRM application.
If you are self-employed running your own business with little or no staff, you may use very basic free contact management functionality on your mobile phone or you may use a simple spreadsheet, or e-mail, to manage your customers.
If your business is more than just one person, the next step up could be a basic contact management tool such as Goldmine or ACT!
Real CRM, however, comes in a level higher than simple contact management tools. It is more suitable for businesses big enough to have several people, or teams, performing different functions. In this case a more fully featured CRM application is justified.
One class of CRM application is online systems such as SugarCRM or Zoho CRM. Fuller CRM functionality is available in CRM applications such as SalesLogix, SalesForce, or Microsoft Dynamics CRM. My background is with the SageCRM application by Sage, which is also a fully featured CRM application available both online and on premises.
For this book, we are not going to focus on any specific CRM application, but we are talking about CRM applications with well-developed features such as contact or customer management, sales, customer support, and marketing modules. There may be optional add on extensions such as customer self-service, or support for mobile.
We will talk about modifying the CRM application to integrate it with ERP. The CRM application will therefore need to have some way of being customized and extended. It will preferably have a development API or toolkits, of some kind. These are to be expected with any decent CRM application.
Have a look at your high-level CRM checklist:
As we go through the benefits of integration, it is never too early be thinking of how you will develop the customizations and integration. Do you have in-house skills to implement customization and integrations, or will you have to outsource the work? We will talk more about that in the next chapter.
Now take some time to consider the following questions:
Is the CRM application that you use suitable for integration? Consider the features that it has and how easy is it to customize; is there a development API?
Does your business have the development skills to develop an integration? These skills could be in-house, or contractors, or business partners. Have you or has anyone in your organization run a development project before? Are you comfortable to take one on?
The rest of this chapter is a discussion of the common CRM concepts and features that we will need as a basis for building our CRM integration, and how they are affected by CRM integration.
We use the term users to refer to people who use a CRM or an ERP application.
Typical users of a CRM application are people in your organization who are customer-facing; they have to interact with customers as part of their daily duties. We will focus on the more common areas where people work with customers, such as sales, customer support, and marketing.
The users of the ERP application are typically more back-office focused. Accountants and bookkeepers will use an ERP application rather than a CRM application.
We use the term roles to refer to the work that our users do.
In small businesses users may perform more than one role. Salespeople may also do a marketing function one day a week for example. In larger organizations the function will be made up of teams of users; for example one or more sales teams, a support team, and a marketing team.
If the business is more complex there could be some granularity to these roles. In sales, for example, there may be an inside sales role for those who do sales from within the office, and/or an outside sales role for salespeople who travel outside the office.
When you are designing your integration you will need to think about users, user roles, and teams. Can your users be grouped under common roles such as sales role or support role? Do you have multiple teams performing the same role, for example do you have different sales teams, perhaps separated geographically, or by business unit? As we talk later about different integration features, you will need to think about how they apply to your business, and which users, roles, and teams in your business are going to benefit the most.
Consider the following questions to help get a stronger understanding of who is likely to be involved and how with your CRM integration:
Do you know who uses your CRM application?
Have you identified teams and other people who use your application? Is there a distinction between sales, support, and marketing users?
Do you have any other roles in your business?
Do you have multiple teams performing the same role?
Who are the managers and team leaders?
Every user has work to do, and in a well-run business they are they usually following a specific process. In CRM, the features that support a business process are called a workflow, or business workflow. A workflow is the set of actions that is undertaken to perform a multi-step procedure or task.
Usually, the set of actions will take place over a period of time; days, or maybe even weeks. The set of actions will need to be done in sequence. It can involve multiple users, or teams, and it can involve work by users in different roles.
A sales workflow is a classic example. A sales workflow could be the process of taking a lead, and qualifying it, perhaps going through several stages, involving meetings with your customer, phone calls, quotations, and so on, to get to the point where a sale is made.
Workflows are interesting in CRM because in many cases they are unique to your business, and workflows in CRM therefore need to be modifiable for your business. Most CRM applications allow you to customize your workflow to suit your own business process.
For example, while every business has a sales workflow, each business will do it differently depending on what they are selling, and what their business model is. Some businesses may do aggressive cold calling for new customers, while others may wait for new clients to come to them, and yet others may mainly deal with existing customers. For a CRM application to be useful, it has to be flexible enough to fit in with most business models. CRM applications do this by having flexible, customizable workflows.
This is useful for us when we are developing an integration. The development of an integration will necessarily mean that workflows will be changed from the way they were with a non-integrated CRM. We will be able to do this because CRM workflows are flexible and customizable.
It can be argued that this is precisely the point of integrating your CRM with an ERP. Having a separate CRM and ERP application means you have separate workflows, which can result in a disconnection—not a good recipe for a quality customer experience. Having a CRM to ERP integration allows you to unify your workflows and bring efficiencies, and connectedness and a better customer experience.
Security is important. Security is focused on the data, and in particular what data your users are allowed to see. You do not want members of your sales team exporting or printing off the entire customer list and selling it to a competitor.
When you implement an integration with ERP, security needs to be considered carefully in the design. Financial information in an ERP can be even more sensitive than CRM information, and some ERP financial data, such as credit limit, or total sales amounts, may become available to your sales or support team for the first time.
The challenge for an integration is that the security model in the CRM application is unlikely to be the same as the one in the ERP application. The next chapter discusses some approaches to security management for your integrated data.
We are going to discuss several features in CRM applications that are useful to be integrated with ERP. The first one is contact management.
Contact management gives users the ability to view, manage, and communicate with their customers. Contact management is the foundational feature for any CRM solution. Contacts include the names of the customers or businesses that you are working with, and the names of the contacts or people who work for the businesses.
With a non-integrated CRM application, if you are doing business with the customer the same customer information will need to be entered again in the ERP application, resulting in the same data being entered twice and a disconnected process.
In CRM, the creation of a customer can be straightforward, for example by simply adding a customer's name, and a contact name to the CRM application. To make it useful, you would need some more information such as a phone number or an e-mail address.
A more sophisticated workflow is the creation of a customer from a lead. A business can gather a list of leads, from say, a website, a tradeshow, or by purchasing a data from a third party. You will then need to qualify the leads by converting the raw data to a good quality list of potential customers.
The workflow to qualify leads into customers who you are going to potentially sell to, is an example of a more complex contact management workflow:
A lead qualification workflow may have some or all of the following steps:
Check data: This could be a manual inspection of the lead to ensure that there is enough information to make contact with the customer—for example, is there a first name and a last name, a phone number, an address, or an e-mail address?
Verify data: The address, zip code, and other contact information for the lead might be verified by using a third-party address verification system, for example.
Make contact with the lead: This could be an attempted cold phone call, mailer, or sending an e-mail out to the lead to determine interest.
Contact achieved: If a contact is achieved with the lead, the lead could be converted to a qualified lead, or a potential customer. This would typically move the lead on to a further step in the workflow, or into a sales workflow, where a sales user would attempt to make a sale. Refer to the next section to see the sales workflow.
In an ERP we also store customer information because the ERP is used to send sales quotes, orders, invoices, and shipments to customers. While the ERP is not involved in lead qualification, there is a workflow around the creation of customers, which in ERP are called accounts receivable customers, or A/R customers.
If the ERP is not integrated with CRM, similar customer information that you have added to CRM will also have to be added to ERP. It is interesting to note that the customer information that will to be added to the ERP tends to be a higher quality and is more financially-oriented.
This is because the information that is added to ERP will be used to send valuable documents such as invoices and for the shipping of goods, which are worth money. In order to ensure that the customer is able to pay, and is charged the correct amount, financially important information needs to be captured such as tax information, payment terms, and credit limits.
In an integration between CRM and ERP, it is possible to take advantage of the fact that similar customer information is used in both CRM and ERP.
A non-integrated CRM application is not optimal for doing contact management because it means you need to maintain two separate customer lists, one in CRM and the other in ERP, both of which contain very similar information.
Your ERP contains the full list of the existing customers who you are selling to. Integrating this information with your CRM gives you the contacts you should be communicating with from your CRM system for your existing customers.
If you pull the data from ERP to CRM, you will avoid entering data twice, and connect some of your business processes. The contact information that comes from ERP will be of higher quality and so it will be more useful to your sales users. The customers' data in ERP will also have useful information such as whether or not they are on credit hold, or what their credit limit and payment terms are. This could be useful to a sales person taking an order within the CRM application.
On the CRM side, your new customers and prospects are likely to start off as leads or customers in the CRM system. Integrating with the ERP allows you to automatically promote customers to ERP when you are going to start providing them with quotes, taking orders, and generally doing financial business with them, preventing data from being entered twice.
Briefly outline the process by which leads and contacts are harvested for your CRM application and how A/R customers are entered for your ERP application. Can you see a benefit in linking these two workflows so that CRM customers are "promoted" to ERP, and/or A/R customers in ERP are copied to CRM?
The sales management feature is usually the most popular feature in a CRM application. Sales management is for helping your sales team make sales to new and existing customers.
We call the feature that is used to keep track of each sales opportunity in the CRM application an opportunity or sales opportunity. In non-integrated CRM, once a sale is made and an order is taken, the sales user will need to use the ERP application to process the order, resulting data being entered twice, and a disconnected process.
A sales pipeline is a snapshot view of how your sales opportunities are progressing. Some opportunities may be newly created, some may be in progress, and some may have been completed, either by a sale coming through, or they may have failed. The sales pipeline will give you a view of this:
In non-integrated CRM, the sales pipeline only shows how you are progressing with a sale until the order is placed in the ERP, because the CRM will not know what happens after the business process moves to the ERP.
Sales opportunities have items in them for sales, and in CRM we call them products. Products may be services, or they may be physical things, with an inventory associated with them. For example, a company that sells services may not have an inventory, but a company that sells physical items will be likely to have an inventory of their items.
This is a key integration point, because the inventory is stored in ERP, and is not usually available in a non-integrated CRM application. Getting the inventory into CRM is a useful integration feature.
We call the process used to manage the business process for how sales opportunities are tracked in your company the sales workflow. As sales is such an important part of any business there may be several different sales workflows depending on what is being sold. The following diagram shows a part of a sales workflow state diagram from SageCRM:
A sample sales workflow could contain the following steps:
Getting a lead: This may be linked with the contact management workflow discussed previously.
Qualify the lead: This is the action of confirming that the lead is a real potential customer, and that you have contact details for the customer.
Call the customer: The next step may be making a phone call to the customer to attempt to make a sales meeting.
Meet the customer: Following the phone call there may be a meeting to present a demo, or discuss a sale.
Send quote: At this stage you may need to send a quote to the customer as you get near to a sale.
Take order: The end of a successful sales process is the taking of the order.
Of course, the sales workflow is different for every business, which is why workflows in CRM are flexible and customizable.
There is significant opportunity for sales management integration with ERP.
In a non-integrated CRM application opportunity management is useful, to a certain point, in the sales pipeline. Very soon, however, your sales team will want to send a quote to the customer or take an order from the customer to progress the sale. But quotes and orders are natural functions in the ERP application, not the CRM application.
This is because quotes and orders need information such as stock available, pricing, tax, and payment terms, all of which are in the ERP system and not in the CRM. Once an order is sent out, the next steps in the fulfillment cycle are shipping and invoicing, again which are in the ERP application.
The integration opportunity is to link the CRM sales opportunity business process with ERP sales quotes and sales orders business process, so that the sales user can seamlessly complete an end to end sale from within the CRM application.
Similarly, products in a non-integrated CRM application do not have inventory, or the detailed pricing that an ERP application has. (Products tend to have simple pricing in non-integrated CRM, but ERP applications can offer advanced price levels such as discounts, sale prices, bulk order discounts, and other features.)
When opportunities are integrated with sales quotes and sales orders, the line items that appear on the opportunities can be linked with ERP inventory items.
An integrated workflow means that sales users can use CRM and be linked seamlessly with sales fulfillment in the ERP.
Briefly outline the sales process in your business where sales are initiated and brought through to completion. Identify the teams who do this work. Outline the benefit of linking the CRM sales process with the ERP business process of quote and order creation. Are there other benefits by allowing sales users to view inventory, or any other information?
Customer support is another popular CRM feature. Customer support in a CRM application is for the management of customer issues. Issues could be general complaints, complaints about products such as returns, refunds or replacements, cancellations of an order, and so forth. Issues that are managed in CRM are called cases, or support tickets, or just tickets. Customer support can also include after sales service to ensure a good customer experience.
In a non-integrated CRM application, tickets that involve returns, refunds, or the replacement of products are not linked with the ERP inventory control system, and this makes the process disconnected. A customer support user may need to enter a ticket into the CRM application, and then they may need to go to the ERP application to process a refund, or replacement. This requires application hopping and double entry of data.
The business process of managing customer support tickets is called the customer support workflow. Tickets are managed from initial creation through to successful or unsuccessful resolution:
A typical customer support workflow may contain some or all of the following steps:
Log ticket: A level one support user may be tasked with entering new tickets into the CRM system. Tickets may originate from e-mails sent in by the customer, or phone calls, or they may come in via another system such as a customer self- service site.
Analyze ticket: The same support user or another more experienced support user may analyze the ticket to see whether enough information has been provided that will allow action to be taken. If there is not enough information they may have to contact the customer again to ask for more information.
Respond to the customer: The support user may respond to the customer with additional questions, or propose a solution to the ticket. There may be a pause at this point, while waiting for the customer to respond. The ticket will be put on hold until there is a response from the customer.
Process refund, replacement, or return: At some point in the life cycle of the ticket, it may become clear that the customer would like a refund, replacement, or return. At this point the customer user may need to go to the ERP application to continue with the workflow, necessitating application hopping and double entry of data.
Close ticket: Finally, on successful resolution of the ticket, it is closed, and the customer support user moves on to the next ticket in the queue.
A non-integrated CRM application is not optimal for handling customer complaints related to returning, replacing, or refunding products that have been sold, because there is no direct link between the CRM application and the ERP's inventory control or sales fulfillment process.
An ERP application is suited to recording returns, replacements, or refunds, sometimes called RMAs, but it is not suitable for managing the customer interactions.
The integration opportunity is to link up the CRM and ERP into a more seamless workflow allowing customer support to take the customer complaints using the CRM system, and then link up with the ERP system when dealing with the specifics of the returns, replacements, or refunds.
Another useful integration opportunity is to use the customer support workflow for chasing up invoices that are overdue, for delinquent accounts. In order to do that there needs to be a link between the ERP system, to get invoice information and the CRM application to handle the customer interactions.
Briefly outline the customer support process in your business where customer queries/complaints are entered, and brought through to resolution. Can this process benefit by being linked with the ERP? Is there information in the ERP that is useful to a customer support person? When processing returns is it useful to have a link with ERP?
CRM applications provide management information to allow managers and team leaders to view the progress of their teams, and to analyze their performance.
Management information usually comes in the form of easy to read visuals of the underlying data, such as charts, graphs, or lists. The information can be provided within the CRM application as dashboards, or it could be exported as reports in varying formats such as text files, CSV files, or PDF files. The following figure shows examples of some management information charts for the sales team in SageCRM:
In a non-integrated CRM application the information available for analysis is the information stored in the CRM application. Some examples of information that is available are:
Opportunity progress by sales user or team: A range of charts, graphs, or reports can be made available that show the progress of opportunities grouped per user, or per sales team. The analysis may show expected revenue for the next time period, for example monthly or quarterly. They may show the quantity of opportunities or the rate that they are being processed by user or by team. This information helps the manager judge the performance of the sales team and forecast revenue.
Customer support tickets by customer support user or team: A range of charts graphs or reports can be made available that show the progress of customer support tickets grouped per user or per customer support team. The analysis may show information such as the closure rate of tickets, or the quantity of tickets being processed, or the time taken to deal with tickets, grouped on a per user or per team basis. The information helps the manager judge the performance of the customer support team.
Information that is not available for analysis in a non-integrated CRM application is any information that resides in the ERP.
A non-integrated CRM application can show useful analysis of information that is gathered in the CRM application only. There is plenty of useful information that is stored in the ERP that will not be available.
With an integration it is possible to expand the information shown to users by adding ERP information such as order fulfillment information, invoices, purchase history, and statements. This information presented to managers and team leaders results in a more comprehensive overview and better planning.
Some examples of where adding ERP information can give a more comprehensive overview are as follows:
Sales analysis: We talked about the analysis that can be done on the opportunity workflow when you have non-integrated CRM. If we add in ERP information about invoices, shipments, and other transactions, we can get a more complete analysis of a sale from the lead all the way to a shipped and delivered product. This information helps the manager judge not only how good a sales user is at making a sale, but how many of the sales are converted to revenue received and goods shipped, which is a better overall indicator of the health of the sales process.
Customer support: We talked about the analysis that can be done on customer support tickets to see how well a customer support user or team is doing. If we add in ERP information such as data on refunds, replacements, and returns we can get a more complete analysis of a customer support ticket all the way from when it is initially logged to final resolution, even if that resolution involves an ERP workflow. The information helps the manager judge not only how good a customer support person is at closing a ticket, but how many times this results in products being returned or refunded, which gives a better overall assessment of the quality of the product or service that is being offered.
This chapter was an introductory chapter to make sure that we are all on the same page and ready to go into greater depth in later chapters. We talked about different CRM-like applications, and then we talked about some of the terminology that we will be using throughout the book. Finally, we devoted a decent amount of time to looking at the different workflows in CRM that will benefit from CRM integration.
In the section on the different CRM-like applications we talked about how as your business grows, you are more likely to need a more fully featured CRM application. In order to implement an integration, your CRM needs to have the standard CRM features, which we listed, and it also needs to be customizable and extendable.
In the section on terminology we talked about users, teams, and user roles. Users are what we call the people who use the CRM application. They are grouped into teams and the work they do is described as a role. We talked about workflow. In the integration, we will be changing the CRM workflows so that they are linked with ERP. Finally in this section, we touched on security, and how we need to make sure the data is secure.
In the latter half of the chapter, we talked about different CRM features and workflows that benefit from an integration. We talked about the benefits for contact management, sales management, customer support, and management information for managers and team leaders.
In the next chapter, we will talk about building the integration. We will cover integration architectures and concepts such as synchronization of data, and real-time views, and when to do which method. We will cover the different design areas that need to be considered when doing an integration. This will prepare us for subsequent chapters when we will get down to detailed examples of actual integration use cases.