What's the Deal With Integration?

I am coming off a week where I spend countless hours in meetings and conversations with a software publisher and various business partners regarding the concept of integration between various CRM and ERP solutions.  I figured it was prudent to do my first blog in a couple of weeks to discuss some thoughts in this area. 

The first thing I think it's most important to understand are some of the fundamentals regarding the concept of integration and the value derived when you get it right.  In the past few years I have done countless implementations of what you would call stand alone systems.  And, before the "ink is dry" on the first phase of many of these projects customers begin to see gains in many areas of sales and service operations.  These gains are quickly limited by increased bottlenecks when dealing with other departments within the company.

I would like to step back a bit and talk about one of the basic concepts that gave CRM a jump start in the business community to start with.  A customer relationship management solution has value over a basic contact management or opportunity tracking system because two other integrations have already been integrated into the core solution.  CRM at its basic level bring together marketing, sales and customer service into a centralized environment.  If we understand this basic value add then we should also understand that it's impossible to leave these operational units compartmentalized away from the rest of a company's operations.

So the question becomes "How do I approach integration and what should the scope be in order to make my organization more efficient?"  The answer is dependent on the type of business you are in and what your highest operational challenges within the firm.  If the priorities are not immediately apparent you can conduct a few exercises to reach your conclusions:

1.  Analyze the flow of information within the firm.
2.  Document any bottlenecks you identify.
3.  Assess the level of impact and how many departments are affected by any bottleneck.
4.  Document the direction of the flow of data creating the bottleneck.
5.  Meet with team members to discuss the analysis and decide on the financial repurcussions of removing each bottle neck.
6.  Approach the area of greatest need and limit the scope of your first round of integration to one bottleneck only.

Here is a real world example from one of my customers.  The company became very efficient in their selling efforts and began to grow quickly as a result of their CRM implementation.  The company came to me and said it was imperative that they integrate to the back office in order free up even more selling time by pushing orders into their ERP system.  Before jumping right in to scope the order integration I asked if we could run through the process above.  They agreed and this is what we found.

As it turned out the order entry process was the least of their issues.  Because the company was a services based company without inventory the order entry process was fairly simple.  They needed only to enter a customer into the back office system in preparation for billing of services.  There was usually a first invoice necessary for a retainer but new customers usually took only about 30 minutes to enter into the new system.  The analysis revealed that customer service was suffering and projects were being impacted by the lack of resources available to complete sold projects.

The company was using a point solution to manage their projects and needed to find a way to push their resource scheduling and availability of personnel to the sales team in order to give visibility on lead times needed for new projects.  The company was spending significant dollars outsourcing work in order to meet promises made during the sales cycle.  And, due to the complexities of outsourcing, sales and project managers were spending nearly one day a week meeting to discuss scheduling and work through project challenges.

Instead of simply taking the approach to integrate to the back office (which would have taken about six weeks to complete) we recommended that the firm hire a sales operation admin to take on the task of entering new customers and initial invoices into the ERP system.  We then focused energies on enhancing the CRM system to provide more detailed quoting capabilities for the resources need to complete the projects being sold.  We integrated the quote to convert to a project in the project management system to eliminate duplication of entry. And we created a portal within CRM to show high level resource availability and created a "What If?" analysis tool within CRM to show the impact of deliverable dates when outsourcing was used.

The net effect of integrating the right information between departments created significant value to the firm.  More importantly, the 8 hours of weekly meeting time to discuss project and resource challenges was shortened to a one hour weekly status meeting between sales managers and project managers.  After all was said and done the company freed up 17.5% more selling time and profitability increased on most projects because the need for outsourcing was minimized.

I like telling this story because it shows how assumptions can lead to bad decisions.  Integration affects the entire firm so it's important to take a look at the entire environment when considering bridging internal platforms.

When we finally decided to address the order entry integration we found it cheaper to replace the ERP with a complimentary back office system to the CRM where the publisher's core integration included all of the necessary elements needed by our customer.  Had we gone the other way the customer would have paid for an expensive integration and ended up with more disparate systems and the project management intetration would probably never have happened.


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