Sunday, December 7, 2008

CRM and ERP – do they need to be tightly integrated?

A hard question, but a question that many CIO’s are asking. The key to the answer lies in asking just one question

Is the volume of leads/opportunities that converted to orders very high?

If yes, plan to integrate your CRM and ERP
Otherwise, it is not necessary to integrate them

If you are selling very high value projects, where you perform a lot of activities to get the business but the number orders per period may be low. The number of customers may also be low but the number of support calls may be very high. There is no need to integrate the CRM to ERP in this case.

If you are selling products where there are a large number of opportunities converted into orders, you should plan for integration. When leads/ opportunities get converted there are numerous entities like Customer codes, product codes, price lists, discount codes, currency codes, exchange rates, pay terms, company and division codes that need to be sync for opportunities to be converted to orders. You cannot manage without the integration. If you are buying disparate systems and want to integrate, it is feasible but plan for a complex project.

At Kallos, we have executed a project integrating a CRM with an ERP for a multinational with plants in 7 countries. It is complex, but we delivered succesfully and it has been running for 4 years.

This may be a simplistic answer , and we may have exceptions, but is a good thumb rule. In either case don’t let your ERP vendor tell you that it has some CRM features and that is enough. CRM has enough business processes covered that are not a part of ERP and if your business needs that, don’t expect the ERP to extend to handle them. Ask for a separate CRM.

KServe CRM can be run separately, integrate with the KServe ERP, or a custom integration can be made with another ERP. Its your process that determines our response.

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