Customer Relationship Management (CRM) software encompasses a wide range of business capabilities from marketing automation to sales management to quoting to e-signature, contract management and customer onboarding. ERP software can similarly encompass many business processes including order management, inventory management, invoicing, financials and more. Both categories of software have overlapping features, including quotes/proposals, contract lifecycle management, fulfillment, customer service management, inventory management and more.
CRM and ERP are well established categories in the overall lead to cash (LTC) or quote to cash (QTC) process and how the systems are configured and connected properly depends on technology but most importantly on the business needs now and in the future.
One of the more common architectures involves Salesforce and NetSuite. Both are platforms that overlap in capabilities. For example, NetSuite includes CRM functionality. Salesforce has order and billing features. Every organization has its unique requirements – some of which are key differentiators for their business. There is no one-size fits all, but there are industry best practices that play to the strengths of each of the platforms and create a foundation that meets today’s and future needs.
Quick Wins on the Quote-to-Cash flow
In this blog post, we discuss some of the most common ways to integrate both CRM and ERP and can be used as a way to identify the “low-hanging fruit.” These are common connection flows that can add immediate impact and can serve as the start to build additional capabilities.
The sales process is best run through CRM, however, there is potentially some critical information from ERP software that can help improve the sales process. Often the product and pricing “master” is located in ERP and retrieving the latest and greatest product, bundles and pricing can ensure the CRM-CPQ solution can generate accurate and timely quotes. In addition, during the sales process, it can be highly valuable to check inventory levels and shipping times to give the prospect the information they need to make decisions faster. In the reverse direction, the sales forecast in CRM is critical for demand planning and can optimize supply chain management greatly.
Closing the deal and onboarding the customer can shorten the time to value for new customers as well as help recognize revenue faster by delivering performance obligations with more efficiency. A customer can receive and sign a contract using e-signature technology in CRM and have the contract management and customer onboarding process automatically kicked off in ERP. To eliminate manual entry, new account information can be passed to ERP to create the master customer record. The order can then be automatically created and provisioned with delivery dates, login information or service dates immediately sent to the customer. For more complex deals, such as with subscription and consumption-based billing, revenue schedules can be generated for revenue recognition.
The move towards subscription-based billing has created many benefits for both vendor and customer alike. An ongoing product-service relationship does create complexity particularly if the customer wants to modify their arrangement (in CRM and have it carried through to ERP). Midway through a subscription, the client may decide a number of things:
- Add or remove products and services
- Extend or shorten the contract term length
- Upgrade or downgrade editions
In addition, the customer may decide to renegotiate pricing. While complex, an organization that has automated its contract and co-termination process is significantly more efficient and more responsive to customer needs. A streamlined amendment process is similar to the presales re-quoting process as customers negotiate different options. Being able to respond quickly with different options improves closing rates.
Servicing a customer requires being able to answer all of their questions. Customers may have billing, invoice questions, order and fulfillment questions and more. Connecting customer support software in CRM to ERP can save handoffs to finance for the most common situations and enable customer service agents to close more cases on the first call. In addition, by making the information available in CRM, it can save on additional ERP license costs for the CSRs who should have access to that information.
A good data architecture that takes into account all customer data and how they are interrelated can strengthen data integrity and improve customer value. A simple but very common example is knowing where the billto: and shipto: contact information is located. For many customers, this may be found in multiple locations, within CRM, ERP or a master application database. A further complication is that multiple people within the organization may change this information – this could include the account manager, customer service and accounts payable contact. Ensuring that the right people can change it and do so without overwriting each other’s changes and that people who need the information can access it whenever they need to, reduces error and improves customer service.
Benefits of a Well-Designed CRM-ERP integration
Integrating applications and data to automate your business process creates many downstream benefits that often far outweigh the cost of development, configuration of a middleware tool or use of already-built connectors available in the marketplace. ROI is continuous and scales well as volumes grow.
In addition to quick efficiency gains and fewer license costs – customer visible benefits include faster lead to close, better customer service responsiveness, faster payments and lower customer churn.
Once the initial integration is established, it serves as a strong foundation for future growth. Additional business functions can be added. Consolidating and rationalizing the data architecture creates a stronger customer 360-degree view, enabling deeper insights. Automated capabilities for employees can later become exposed to customers via a self-service portal, creating significant scale.
Having a strong design and vision is critical to creating an intentional go-forward plan that delivers value now and in the future with minimal to no rework. Many of our clients start with an assessment, an evaluation of the current state, and a roadmap that aligns with business goals based on industry best practices and the unique strengths of your company.
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