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."

Featured Research
  • Your Guide to Social Customer Service

    Did you know that 67% of online consumers have used social media for customer service purposes?Unfortunately, many businesses ignore social mentions because they don’t know how to handle them appropriately. This is a problem because managing and responding to these mentions can make or break your brand. more

  • A Guide to Selecting a Customer Portal for your CRM

    This whitepaper provides a guideline for selecting the right customer portal solution for your CRM by following a three-stage process. By comparing in-house and third party SaaS products, we examine present business and technical portal requirements, which are then mapped against the upfront and hidden costs for development and future scalability needs. more

  • Top Intelligent Tools That Every Sales Rep Should Have in 2017

    Explore how Artificial Intelligence (AI) makes it possible for salespeople to leverage the structured data in their day-to-day activities and enhance the communication with customers and prospects. more

  • The Social Intranet: A guide to getting better business results

    This whitepaper describes why the shift from a traditional to a social intranet is imperative to staying competitive, and analyzes the costs and benefits associated with implementing one. You will also find useful KPIs to measure performance and further leverage your intranet's success, raising employee engagement and boosting your competitive advantage. more

  • The New 2016 SMB CRM Comparison Guide

    Selecting a CRM system is not easy. That's why our CRM expert has compiled this new SMB CRM comparison guide to provide you with the information you need on the top 40 CRM software solutions available on the market. more