Businesses often resort to CRM and ERP solutions when it comes to automating their business processes and simplifying things. Both solutions touch base on different departments and are often integrated when needed. But is Salesforce a CRM or an ERP?
If you’re confused about both the terms and at crosswords about which software to choose for your organization, let’s discuss the characteristics of an ERP and CRM and how their integration can help enhance your business output!
What Is an ERP?
An ERP (Enterprise Resource Planning) system is a software system that integrates and manages various core business functions within an organization. These include finance, supply chain, human resources, manufacturing, inventory management, and more.
For example, in the finance department of a company, an ERP system can be used to manage accounts payable and receivable, budgeting, and financial reporting. While in an HR department of the company, it can cover areas such as payroll, employee records, performance management, and recruitment.
An ERP is mainly a centralized platform where different departments can share and access information and collaborate with one another. Some of its recognizable features include:
- An ERP stores and maintains all relevant data and allows you to access this information in real time.
- It automates routine tasks and workflows, reducing manual efforts and the chances of human error.
- It helps in optimizing the use of resources such as materials and equipment by enabling effective inventory management and resource allocation.
- It provides robust reporting and analytics capabilities where you can gain insights into your operations, performance, and trends.
- It can handle large volumes of data, users, and transactions, which makes it suitable for both small businesses and large enterprises.
Difference Between an ERP and CRM
Unlike the ERP, a CRM (Customer Relationship Management) tool focuses on one aspect of a business, i.e., managing customer interactions and relationships. It helps organizations track customer information, analyze data, and improve customer engagement.
While both CRM and ERP solutions can overlap in some areas, their core objectives and functionalities differ. Here’s how:
- ERP mainly covers business areas, including finance, supply chain, manufacturing, etc., whereas CRM is more focused on sales, marketing, and customer service.
- In an ERP, you can store and handle a wide range of internal data, including financial data, inventory levels, employee records, production schedules, etc. On the other hand, you can store and handle data related to customer contact details, sales opportunities, customer support cases, etc.
- An ERP integrates different departments and functions within an organization, whereas a CRM can integrate with other systems (including an ERP).
Organizations often implement both systems to manage their internal processes and customer relationships effectively. They either install both systems separately or integrate an ERP into a CRM, depending on their requirements and convenience.
Salesforce an ERP?
From what we’ve gathered so far, a CRM is a sales-focused software solution that handles the customer side of a business, and so does Salesforce!
While Salesforce does offer some functionalities related to business processes and operations, its core focus is on managing customer interactions, sales, and marketing activities. This is why Salesforce is primarily recognized as a CRM and not as an ERP.
However, Salesforce can integrate with ERP systems or provide some ERP-like functionalities in specific areas for seamless data exchange and synchronization between the two systems.
Why Should You Integrate an ERP and CRM?
You need an ERP and CRM integration if you aim to build a more customer-focused business with every department and its data connection. Here are some of the benefits of integrating an ERP with Salesforce:
- Integrating ERP with Salesforce ensures customer data remains consistent and up-to-date across both systems. When you create or update customer data in the ERP system, the integration can automatically update the corresponding information in Salesforce, including contact details, addresses, and account information.
- It streamlines the flow of order-related data between the ERP and Salesforce systems. When an order is placed or updated in Salesforce, the integration can push that information to the ERP system for processing and fulfillment. Conversely, the ERP system can send order status updates, shipping details, and invoices.
- It allows for real-time synchronization between data ensuring accurate information for sales teams and customers.
- Teams from one department can have visibility into other departments’ data, which helps eliminate silos and increase collaboration.
- Data remains consistent and up-to-date across both systems, eliminating data discrepancies and manual data entry errors.
Salesforce-ERP Integration Use Cases
Customer Order Management
This is how you can ensure the flow of customer orders between Salesforce and the ERP system is seamless. For this, the sales teams can create and manage orders within Salesforce, and the integration will automatically transfer the order data to the ERP system for processing, inventory allocation, and fulfillment.
Inventory and Product Management
The Salesforce-ERP integration helps keep the inventory levels and product information synchronized. Salesforce will have access to the ERP system’s inventory data, including stock levels, locations, and availability. This information is made available to sales teams within Salesforce, giving them immediate visibility into the availability of products they are selling.
This helps avoid situations where products are promised to customers but are not actually in stock. Customers can view real-time stock levels and make purchasing decisions accordingly.
Lead-to-Cash Process
With integration, you can connect Salesforce’s lead management, opportunity tracking, and quoting capabilities with the ERP system’s order processing and invoicing functionalities. This allows teams to streamline and automate the entire sales cycle — from generating leads and progressing through various stages until the final closing of a sale and the generation of revenue.
How to Integrate Salesforce CRM with an ERP
Native Integration
There’s a helpful element in the Salesforce ecosystem called the connector that allows you to connect ERP applications to your Salesforce account.
Pros
- This allows for better compatibility between both solutions.
- You get all the attention you need when it comes to technical support since the native team is handling it.
Cons
- Presently, Salesforce allows you to use the connecter for a few ERP platforms, such as ORACLE, SAP, and Microsoft Dynamics ERP systems. This doesn’t work well for businesses using multiple applications.
- It’s only good for small teams. As you add more applications, the native integration might not streamline data accurately.
Custom Integration
Thanks to Salesforce API, you can build your own ERP integration with Salesforce. You can customize each and every function and customize it based on your requirements.
Pros
- It gives you complete control over your systems and processes.
- It allows easy integration into any system.
Cons
- It can get too technical for a non-tech person. Only hard-core developers can handle working in a custom integration setup.
- It’s time-consuming and costly.
Integration Platforms
Today, many ready-to-use Salesforce integration platforms exist to help you fast-track the process without much hassle. It’s an affordable alternative to the other two options we discussed here.
Pros
- They offer a wide range of integration capabilities, which allows for tailored integration solutions.
- They provide pre-built connectors, adapters, and templates, simplifying the integration process.
- They are designed to handle large volumes of data and transactions, ensuring scalability and optimal performance.
Cons
- They may require a learning curve and expertise to configure and manage the integration effectively.
- It introduces a dependency on the platform provider.
How to Select the Appropriate Integration Method
- Understand your integration requirements thoroughly. Identify the specific data, processes, and workflows that need to be synchronized between Salesforce and the ERP system.
- Assess the complexity of your project — the data volume, the number of integrated systems, and data mappings.
- Evaluate the costs associated with different integration methods, including any licensing fees, implementation costs, maintenance costs, and ongoing support. See how this cost compares with the integration ROI.
- Determine if you have in-house expertise and resources to handle the integration in case it gets technical at some point.
- Anticipate future needs and scalability requirements. Consider whether a method can accommodate future growth, changes in data volume, additional systems, or new business processes.
Use ERP Integrations to Maximize Your Business Output
While Salesforce is specifically designed for sales teams to handle customer data and interactions, it’s flexible enough to transform into more. Thanks to ERP integrations, the platform allows the flow of data between customer segments and core business functions, increasing collaboration across departments.
This integration allows organizations to leverage the strengths of both platforms, enhancing customer management and operational efficiency. So choose the integration method that fits your integration requirements and leverage the combined capabilities of Salesforce and ERP!
