The push to become a “smart factory” is stronger than ever, with manufacturers returning to their pre-pandemic focus on technology investments that make operations sleeker, faster, and more intuitive. In fact, investment in manufacturing tech has tripled over the past five years, reaching $6.8 billion in 2021. During that time, the number of deals reached a steady average of 270 each year—a sign that companies are maturing and moving into even more advanced stages of technological growth as the average deal size rises. With all these investments, however, not every manufacturer has taken the time to ensure two foundational software platforms are in sync with one another: ERP and CRM.
Manufacturers can benefit immensely from a tech stack that seamlessly integrates ERP data with CRM data for real-time transparency between the two. To guide decision-makers in the manufacturing space interested in this effort, this article will look at what ERP and CRM handle on their own and how connecting the two can make both tools (and your organization as a whole) more valuable.
What ERP does (and CRM doesn’t)
Enterprise Resource Planning (ERP) software is widely used by organizations with various business functions. It is used to consolidate the planning activities of finance, HR, inventory, sales, compliance, etc., into one system or shared database from which employees anywhere in the business can access information.
ERP has taken off and become a standard business tech stack item because it enhances collaboration with reduced data silos, improves individual employee efficiency with easier information access, and makes quality compliance far easier than it once was, especially for manufacturers. ERP is all about connecting a business’ finances with operations and vice versa. In other words, it is very internal-facing. It does not touch customer interactions, whether lead, prospect, contact, or recurring customer. This is where CRMs, like Salesforce, step in.
What CRM does (but ERP doesn’t)
If ERP is focused on all the nitty-gritty details of a business internally, CRM is focused on the flip side of outward customer details or external forces impacting business. Customer relationship management (CRM) tools are also interested in streamlining operations and improving scalability through a centralized database like ERP, but CRMs tackle customer interactions specifically, something ERP doesn’t touch.
These interactions can be focused on prospective efforts or enabling existing customers to speak or chat with Customer Representatives on a 24/7 customer service line. The CRM platform can also leverage data forecasting and analytics to see trends, potential sales opportunities, and overall real-time fulfillment statistics for your staff or management.
Best-in-class CRMs often go one step further and help organizations expand their revenue streams by offering additional solutions like Salesforce’s Revenue Cloud. Revenue Cloud adds to the basic customer relationship management of Salesforce alone (account, lead, contact management) and allows organizations to build out consumption, recurring, or usage-based models with their customer base. This drives the analytics and forecasting data working in tandem with your ERP system to offer the best visibility into the business.
Revenue Cloud can also be leveraged with other Salesforce offerings to expand sales and order fulfillment, such as advanced scheduling of field technicians, product tracking, and even offer real-time visibility to clients and partners on their orders and fulfillment. Paired with your existing ERP, Revenue Cloud or Salesforce can be closely integrated to filter and enhance the data already residing in your ERP.
Guidelines for making both tools work seamlessly together
The advantages of integrating ERP and CRM as a manufacturer are too good to pass up—improved collaboration and efficiency between the platforms leave your employees with more time to pivot to strategic new revenue streams, more accurate reporting and forecasting will be won with the real-time data transparency between the two softwares (a must in the current age of regular supply chain disruptions), and lower IT support costs help raise your critical profit margins when you only have one integrated system to maintain rather than two.
To ensure your integration goes off without a hitch, however, there are some decisions and guidelines to keep in mind:
- Pick a partner: Partner with a system integrator, especially if you carry over complex, legacy ERP systems into a modern CRM like Salesforce. While many modern cloud-based ERPs are easier to integrate, the longer you’ve had your ERP in place, and the more you’ve customized it, the trickier integration with CRM will be down the line. Ensure that the partner you’ve chosen has a lot of experience in your ERP and CRM tools. The last thing you want is a beginner building out integrations that handle financial and order management data.
- Pick an integration tool: MuleSoft is an excellent integration choice for CRM and ERP (and many other applications as well). The Anypoint Platform on MuleSoft allows you to connect experiences and data from any system and bring data from SAP, Workday, Oracle, etc., into Salesforce for a true single source of truth throughout your organization. It allows for advanced transformation and mapping of data so that there is no need to worry about various system formats. Mulesoft also offers out-of-the-box connectors to Salesforce and SAP to make developing those integrations fast and efficient. Other integration tools (like Informatica, Boomi, Tibco) can also be leveraged for integrating your ERP with CRM.
- Pick the Source of Truth: Each system you integrate or onboard within your organization will have certain pieces of information that are either generated from that system or that the system updates. To ensure that the correct data is appropriately sourced and not overwritten or changed, you need to decide which system is the “source of truth” for that data.
- For example, representatives might enter the business phone number into the CRM. During the sales process, that number (and other information on that business) might be sent over to the ERP, which would add additional information for fulfillment and tracking. The CRM would be classified as the “source of truth” for the initial business information, and the ERP would be classified as the “source of truth” for the fulfillment information.
- “Source of Truth” decision is usually a part of a larger Data Governance strategy that ensures data quality and integrity across your ERP, CRM, and other peripheral systems.
- Pick a lead hand-off approach: CRM and ERP can both run seamlessly on Salesforce, especially thanks to the functionality of Salesforce Billing, which allows ERP systems to easily inherit matching data from CRM for accounting and other needs. Just keep in mind that you will need to consider when your business wants to have leads handed off from CRM to ERP: lead-to-invoice, lead-to-cash, or lead-to-rev rec.
- Pick a security model: There are many users within your organization. Some may need to enter pieces of information into the CRM, others manage the ERP, and still others enter data in both. Ensuring you have the proper security conversations of which groups of people can join in or see what data in which systems is crucial to connecting your CRM and ERP. Not everyone should be able to kick off an order or fulfillment process or enter critical pieces of financial information. It’s important to know who should be allowed to do what, which will determine what security and restriction solutions will be considered.
Successfully integrating ERP and CRM is critical for manufacturing organizations eager to reap the full benefits of what they sow through sales and marketing initiatives. By easily sharing inventory and financials from ERP to CRM, and CRM sharing customer and account data with the resource planning of ERP, your organization can become more agile, efficient, and innovative in the ways it reaches customers and delights with a fully dependable experience. Learn more about how to establish this connection from our experts in data integration at Simplus by reaching out today.