The first two mission-critical systems to connect for your digital transformation are enterprise resource planning (ERP) and customer relationship management (CRM) software. Why? Because they’re how you make money and how you save money!

While your ERP system manages back-end operations, the CRM system is busy handling front-end, customer-facing, revenue-generating functions. In turn, they help you connect your entire value chain from beginning to end in two separate but important ways.

But that raises an interesting question: If both ERP and CRM software are an important business process, why are they siloed apart? Simply put, they shouldn’t be.

In this guide, we’ll help you understand ERP-CRM integration, why legacy systems no longer suffice, and how you can elevate your digital transformation to the next level with a native cloud solution.



What are CRM and ERP and Why Should They be Integrated?

Before we can dive into the complexities of integrating ERP with a CRM system, it’s important to understand each one individually.

ERP Software

ERP is the software solution used by an organization to automate and support a range of administrative and operational business processes. In simple terms, an ERP solution streamlines critical functions like purchasing, inventory control, production, and financials to improve productivity, efficiencies, and profitability.

An ERP system is intended to centralize and optimize back-office operations. For example, using an ERP may help you identify inefficiencies in the manufacturing and production process or keep track of important metrics in the accounting department. Because an ERP both creates and manages business data, it is critical that all of your business data is visible. Unfortunately, much of the incoming data is the result of sales that may be created and managed by a wholly separate system—typically manual spreadsheets or a customer relationship management system.

CRM Software

On the other hand, CRM systems manage the initial relationship with prospects for leads and the process of converting leads to orders by empowering sales and service teams with immediate available-to-promise data, better understanding of margin implications to optimize profitability, move quotes/orders quicker, and set appropriate delivery expectations. A CRM solution allows you to strategically increase sales and improve customer satisfaction, experience, and loyalty by collecting and leveraging customer data. 

CRM functionality ranges from sales and marketing to customer service and e-commerce. Simply put, this system handles any customer-facing sales and business interactions.

Integrated ERP and CRM

Typically, the sales team uses CRM to manage initial sales and the service team to manage after-sales service. But for a manufacturer, there is a lot going on in between to connect the two for a positive customer experience. Where CRM leaves off with a deal, ERP picks it up as an order and stewards the business data throughout the business resulting in delivery of that order. Now, software solutions are bridging the gap and connecting CRM and ERP into a single solution sharing common data.

By eliminating the barrier between systems, you’re able to realize the full scope of what each has to offer. Think about it: After a sales person enters the customer and deal data, why should someone re-enter that data into a separate ERP system. By capturing data once and using a single source of customer data throughout the business, you streamline productivity, and keep everyone on the same page to improve the customer experience.

By connecting these symbiotic systems you eliminate the previously siloed data and empower your company to access one source of truth across the entire value chain. In one single platform you access all relevant data types, including:

  • Client and account information
  • Customer data
  • Product information
  • Pricing and discounts
  • Sales orders and purchase histories
  • Payment information

Simply put, CRM and ERP use the same data, so they should be integrated on a common data platform for one data model across the organization.

The Challenges of Legacy Software Solutions

Making efficient use of a legacy system—a term used to describe pre-cloud software—in today’s digital world is a bit like holding on to your landline phone. You can still talk on the phone but all your friends are texting and instant-messaging you. You’re out of the loop!

The pace of doing business is changing rapidly, and if you’re not using the same powerful tools as your competitors, you may start falling behind them. The sad truth is that many legacy systems are called “legacy” for a reason. They are to cloud solutions what the pay phone is to mobile phones–they are a dying breed.

It’s no surprise then that nearly 50% of companies, according to the Technology Evaluation Center, are planning to soon ditch or upgrade their current ERP system for something in the cloud. As for CRM solutions, Dun and Bradstreet estimate that 91% of CRM data stored is incomplete or duplicated. In either case, are you still betting your company’s success on them–especially if they’re using two different databases?

Inevitably, legacy ERP and CRM solutions lead to limited visibility. If they are not integrated with a common data model, you need to enter the same data into each and then look into each one to get the right data. In turn, they generate a number of resulting difficulties:

  • Poor inventory management: Without accurate ERP or CRM data, you may face costly stock outs or excess inventory. An IHL study reports that out-of-stock goods alone are known to cost retailers nearly $1 trillion worldwide.
  • Unnecessary overtime and expediting costs: How many times have you scheduled more work on a given day than was possible to produce? Or too little and had people sitting around? Without oversight, it’s easy to make costly mistakes like these that result in excessive costs.
  • Missed orders and opportunities: With e-commerce sales expected to leap 16.1% in 2022, according to Insider Intelligence forecasts, the rate of doing business is quickly accelerating. Legacy systems fail to maintain pace and often cause frustrating delays. Worse yet, effective cross- and upselling opportunities are few and far between, due to inaccurate information.
  • Employee and customer churn: ERP and CRM are vital assets to your workforce, but difficult systems can be a major frustration that negatively impacts performance. If you’re not empowering your employees with effective tools, turnover is inevitable. Likewise, disparate information can cause frustrations that sour customer relationships and bruise your brand’s reputation.
  • Double-handling data: When ERP and CRM aren’t in sync, data ends up being manually input more than once—wasting time and inviting errors—an inefficiency that costs you money.
  • Inability to scale: Growing businesses need to spread their wings, but legacy solutions are like ankle weights. Outdated systems are difficult to manage, require excessive maintenance, and often can’t be upgraded easily as your business grows.
  • Lack of insight: Because legacy systems don’t provide visibility, you can’t identify inefficiencies. Think about it: If you didn’t have a temperature gauge, how would you know if your engine is overheating—until it’s too late?

For these reasons, Gartner predicts that enterprises will soon see a “blurring of the traditional boundary lines” between ERP and other critical business applications like CRM. In fact, they say that enterprises are starting to focus on a more robust and manageable integration between platforms.

That’s why solutions that are connected on a common data platform are raising the bar making manual integration unnecessary—in fact, obsolete. The result? A more manageable, cohesive, and pain-free experience for your employees, your customers, and your IT staff.

Why You Need ERP and CRM Software Native to a Unified Platform

The term “native” refers to software written natively to a software platform. Salesforce CRM is the world’s leading CRM and has resulted in the Salesforce Platform where virtually any type of software—like Rootstock ERP—can be written natively on that platform, eliminating the need for integration of any kind. All solutions native to the Platform share the data model and other critical software components like user interface and business process workflows.

Across the board, native applications are faster, more intuitive, and more secure than legacy or integrated solutions. Key to the Salesforce Platform is the common user experience, so once you learn Salesforce, all other applications native to the platform share that same experience. No need to learn a new one.

To understand why native solutions stand out from the rest, it’s easiest to think of the three in terms everyone is familiar with: the telephone system.

Legacy systems

You can think of legacy systems as the traditional telephone: big, bulky and attached to the wall. They were designed for a single intended purpose—to make phone calls—but as referenced above, cannot be “upgraded” to become a mobile phone. In the same vein, legacy systems are tethered—installed in a closet somewhere—and cannot ever become mobile. In essence, you got what you paid for—and that is all.

Integrated systems 

Remember the first cell phones? You could obviously make phone calls, but in order to text, you had to poke the number keys multiple times to type out letters. They combined phone and text akin to integrating CRM and ERP, but the result was not an effective tool for easy communication.

Native cloud-based system

Akin to the modern smartphone, native solutions are jam-packed with features that share common functionality. The addition of a camera enables you to not only take pictures, but you can video-call your friends and even scan QR codes. Built on a widely-used public cloud platform, they’re designed for ease of use and high performance. As a cloud-based solution, it works universally from any location, accesses one single repository of data, and is automatically updated via the cloud. It connects your entire network on one simple platform that can be scaled up or down based on your needs. Better yet, it’s highly configurable to fit your specific requirements and business needs.

The Benefits of Native ERP and CRM Software

Like your mobile phone, with a Salesforce-native ERP solution, you can optimize your entire value chain from a single solution. In turn, your business stands to gain a number of key advantages:

  • Cloud-based: As a subscription model, you gain predictable cash flows (Operating Expense versus Capital Expense) and an infinitely scalable platform without disruptive installs and patches.
  • Data integration: Complete visibility to all your data gives you timely insights to adapt production to meet changing demands and make quicker, more informed decisions based on accurate data.
  • Common Data Model: With a single source of truth, you can streamline order processing, reduce data entry errors, eliminate double-handling and gain a 360° view of your customers.
  • Scalability: With a native, cloud-based solution, you can configure your solutions offline until you are ready to deploy without disrupting operations until you go live.
  • Accessibility: All of your information can be securely accessed at any time, on any device, from any location.
  • Security: Native cloud solutions are protected with an order-of-magnitude more security than any company can afford to invest in a legacy solution housed on their servers.

From customer service to supply chain management, you need a solution that unifies your entire value chain on a single platform. Legacy solutions can’t do it and integration only takes you so far, but that’s why we’re here. Rootstock’s cloud ERP solution is natively built on the Salesforce Platform to optimize your end-to-end processes in a frictionless and effective user experience. 

Need to know more? Request a demo of our cloud ERP today to learn what Rootstock can do for you and your business.