Learn benefits and challenges of CRM and ERP integration

5 benefits of integrating ERP and CRM software

As with any large-scale initiative, starting with a clear vision that includes specifying the key objectives for the integration project is key. Articulating the "why" will help clarify priorities, build consensus and bring about success.

Here are some benefits of integrating ERP and CRM systems.

1. Avoids data duplication

Integrating ERP and CRM software helps avoid the creation of duplicate records. Sales and accounting teams manually entering customer or order data can lead to record duplication, as employees might accidentally create similar records with slightly different information.

Synchronization between CRM and ERP systems helps ensure that sales, finance and operations teams are all working from one accurate data source, which improves information accuracy and saves time.

2. Improves teamwork and collaboration

Employees can access shared data in real time when CRM and ERP systems are integrated. For example, sales personnel can view available inventory, customer account balances and order status, while the finance team can access up-to-date customer communications and sales quotes.

This shared visibility can lead to better collaboration and faster response times for customer messages.

3. Improves the customer experience

CRM-ERP integration leads to increased employee visibility into customer orders, billing, service requests and communication history, which can help customer-facing workers respond more quickly and accurately to inquiries.

For example, if a customer calls about a delayed shipment, a service representative can immediately check their order history and shipment tracking information.

4. Speeds up the quote-to-cash cycle

CRM and ERP software integration can help sales teams generate quotes more quickly and easily because of the inventory information and pricing data that's available from the ERP system. Once a user places an order in the CRM, that information flows to the ERP software for fulfillment and invoicing.

The integration can help accelerate order processing, reduce errors and improve cash flow.

5. Improves forecasting and reporting

Combining CRM sales pipeline data with ERP financial and inventory data can lead to better business intelligence.

For example, having the two sets of data in one place can help leaders forecast demand more accurately, better allocate resources and improve overall business results because of their real-time view of operations.

5 challenges of integrating ERP and CRM software

CRM-ERP integration can be difficult because of the technical challenges and the organizational change required. Understanding potential challenges beforehand and planning for them can lead to a more successful integration project.

Here are some potential issues.

1. Carrying out change management

Virtually every large-scale technology project changes the way people get their work done. This change often causes anxiety, as employees fear that they will lose some degree of control.

Getting users involved early in the process and enlisting project champions from each department are two steps that can prevent issues. Clear and frequent communication is also essential, as are training programs that help team members get up to speed.

2. Maintaining data quality

Integrating disparate systems can lead to inconsistent or incomplete data if guidelines are not established to avoid synchronization issues.

Rules and systems for confirming data and merging duplicate records can help avoid data quality issues. Cleansing data thoroughly prior to the ERP-CRM integration is also important.

3. Maintaining security and compliance

Integrating CRM and ERP platforms often involves sensitive data -- including financial records, customer data and pricing information -- going between the two systems.

Establishing proper data governance and security protocols is necessary for avoiding compliance violations and security vulnerabilities.

4. Managing integration complexity and cost

Typically, ERP and CRM systems use different data models, nomenclatures and business rules, particularly if they're supplied by different vendors.

Custom integrations can be expensive and time-consuming, and must be maintained over time. Starting small and gradually expanding the scope of the integration can be helpful.

5. Working with vendor lock-in and platform limitations

Some software vendors require companies to be within their own ecosystem to carry out integrations, or they require the use of proprietary tools. These limitations can restrict flexibility, increase costs and make carrying out future changes more complicated.

Evaluating integration options and long-term strategies when choosing a vendor is best so that companies can avoid potential problems later.

James Kofalt spent 16 years at SAP working with SME business applications and was a product manager for integration technology at Microsoft's Business Solutions division. He is currently the president of DX4 Research, a technology advisory practice specializing in ERP and digital transformation.