Integrating CRM and ERP: What Do You Do First?

Updated: April 30, 2009

For the age old question of which comes first, the chicken or the egg, perhaps the best answer is fry them both and serve them together. In much the same way, the struggle over integrating CRM with ERP seems to result in one circular argument after another, with little consensus on the steps it takes to make them one cohesive solution rather than two separate systems.

Still, something has to hit the frying pan to feed a growing business, as the alternative renders the company obsolete. But how do you get CRM and ERP to the pan without scorching them in the fire?

Mapping Your Business

"As a first step in integrating CRM with ERP, forget about the technology and map your business processes," advised Steve Lippock, owner of HarvestGold , a Inc . partner. "Where integration is required, decide which database will be the master, and how often or how dynamically data needs to be updated. This will help you decide on an integration approach, and the technology decisions follow."

Others agree that the procedure should be determined by the desired end result. "The first step is mapping cross-process and cross-environment continuity," said Carlos Cesar Frohlich, workflow configuration specialist at COLT Telecom Group plc in London. "The next step depends on which kind of business you run."

Plan and Understand

At this point, you have to determine what features and capabilities you want the integration to offer.

"As with any implementation, planning is essential," said Edward Siegel, director of marketing for SuperOffice CRM . "What needs to be displayed? How will the users access the information? Will the ERP system feed the CRM system or vice versa ... or both? Are there security concerns? Is either the ERP or CRM system already in place or is this a totally new installation?"

It also helps to fully understand the fundamental differences of both systems before you try to mash them together.

"CRM and ERP systems are inherently different in the way data is stored and accessed; that makes it difficult to use as a single system," explained Don Waskiewicz, president of Deep Blue Insights, an IT-consulting firm. "It's either a great CRM or a great ERP product, not both.

"Eventually the parallel systems evolve into a more seamless integration with both systems performing independently yet feeding into each other. In this way, they can serve independent masters yet for all practical purposes can be referred to as a single system."

Know What You're Working With

Actually integrating the systems requires intimate knowledge of where the two connect.

"Integration points come when opportunities convert to orders, and prospects convert to customers," explained Lippock. "Ongoing changes to customer data must be considered — you will need to decide which is the master database for customer contact information.

"Other possible integration points include synchronization of product data, order history [to track actual sales volume against forecasted opportunity values] and the scoping/estimating/quoting process — especially where custom design services and custom configuration is required," he added.

Link for Success

From the beginning to the end of the integration process, one constant remains.

"It is always best to avoid storing redundant information," said Siegel. "Anytime contact information, for example, needs to be updated in both the ERP system and the CRM system, you are asking for trouble. The more fields that can be linked between systems, the better."

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