Integrating Software as a Service (SaaS) CRM and ERP applications

Successful integration between Software as a Service (SaaS) CRM and ERP systems depends on a number of factors that differ according to complexity. CRM integration is a major challenge for organizations of all sizes. In this new series, SearchCRM.com will explore best practices for integration between CRM and other systems.

The strategy you choose for integrating SaaS CRM with other enterprise applications will depend on how advanced your SaaS deployment is. For large organizations running SaaS CRM, integration with ERP and accounting systems will probably be a priority. However, smaller SaaS CRM deployments -- say, for 15 to 20 seats -- might consider mashups as a simple way of integrating.

Integrating SaaS CRM and ERP at a small or medium-sized business (or a large organization with a small SaaS deployment)

Multiple options have emerged in recent years for companies seeking to integrate their on-demand CRM applications with their ERP system, but the decision still requires careful consideration, particularly with business processes.

CRM delivered via the Software as a Service (SaaS) model is not for every organization. Many of the SaaS CRM deployments to date have been led by non-technical people more interested in simplifying a particular function, like selling, than enabling complex integration with back-end systems, according to Ben Pring, research director at Stamford, Conn.-based Gartner Inc. Outside of a small number of large deals that vendors like Salesforce.com are signing, the median SaaS CRM deployments are only 15 to 20 seats per client, he explained.

"[In these cases] it is not so much a technical challenge as a managerial and organizational kind of challenge," Pring noted. "These are typically set up by a sales manager or procurement manager who does not feel he is being supported by IT. They are not so concerned with making the back-room systems more efficient in the long term, as they are with driving higher sales this quarter."

Mashups make sense for smaller projects

When the top priority is improving the productivity of one team, like sales, mashups make a lot of sense as a lightweight SaaS integration technique. Where traditional integration techniques focus on moving data between back-end applications in real time, mashups focus more on the view presented to the employee. Consequently, mashups can be smaller and easier to write than traditional integration techniques.

San Francisco-based Salesforce.com has a directory of mashups at Appexchange.com that can combine data with Internet services like Hoovers for accounting, Google Maps or internal systems, according to Ariel Kelman, senior director of platform product marketing at Salesforce.com. For example, an internal mashup could show a salesperson the last five invoices from the ERP system when he clicks on a customer's name. Rather than being stored in Salesforce.com, the invoices would be pulled out of the ERP database on the fly.

For example, mashups such as Cast Iron for ERP Applications, Scribe Integration for ERP, and AsapIQ Integration Appliance all provide a framework and application programming interfaces (APIs) for integrating Salesforce.com with the major ERP applications a company might be running in-house.

Canon Marketing Japan deployed Salesforce.com and used the Force.com platform to integrate data from 22 systems. This SaaS-based system provides a single integrated view of the sales process for 1,100 mobile users, and the service is expected to be rolled out to 4,000 users by the end of the year.

"Our sales organization is more efficient, we're moving a lot faster, and we don't carry around laptops anymore," Hiroaki Sasaki, director of business solutions administration at Canon Marketing Japan Business Solutions Company, said in a statement. "We can do most of our work on a single handset anytime, anywhere."

When an organization is more interested in improving workflow or doing heavy analyses, however, it needs to consider more traditional data integration techniques. Enterprise systems tend to have a lot more complexity than simple mapping applications.

Don't miss the other installments in this CRM integration series

SaaS CRM and ERP integration for large organizations

Mashups are not robust enough for larger organizations, which instead rely on APIs. According to Kelman, integration of Salesforce.com is a high priority for larger companies.

"About half of the transactions on our system are through APIs rather than the standard browser interface," Kelman said. "They are integrating the CRM system into ERP, accounting and custom applications."

As SaaS CRM matures, IT managers will take a more active role in deployments and bring integration considerations to the table, Pring predicts. The biggest challenge will lie in coordinating and translating the functional requirements among the business users, the SaaS provider and the technical team responsible for the integration, he said.

Although deploying CRM off-site may reduce the need for IT resources within the company in the long run, there are substantial challenges with setting up the connectivity in the first place.

"There has been a theory that because of the nature of the software and how it is managed, the integration will be easier," Pring said. "But the integration issues are going to be quite substantial. Managing services coming from an external provider and tying those into the [existing] applications is not as straightforward as most people think."

Where to start with back-end integration

A common mistake companies make, according to Kelman, is focusing too much on what technique or tools will be used for integration.

"A lot of these projects don't succeed because people spend too much time focusing on technically connecting two systems together, rather than looking at the business processes they want to enable," Kelman explained. "If employees don't see the data they need, they simply won't use the system."

Companies should start by looking at automating business processes that touch multiple systems -- for example, quote to cash.

When a company wants to improve integration, the IT manager should begin thinking about what data is going to be connected to which tables in the various systems. Fernando Labastida, an account manager at Pervasive Software, an Austin, Texas-based data integration company, explained: "If I have a CRM system running on an SaaS server, am I going to be connecting to every table or data object in my current ERP system or maybe just writing a limited number of data objects or tables?"

According to Denis Pombriant, managing principal of Stoughton, Mass.-based Beagle Research, there is no substantial difference between the keys to successful SaaS integration and the keys to successful in-house CRM and ERP applications.

"You need to understand what you are getting into by performing a needs analysis and [knowing] how you want to use software to improve those processes," Pombriant said. "It will make your job easier if you work with vendors that have pre-integrated systems similar to yours before using platform integration."

NetSuite.com is an SaaS provider with applications for CRM, ERP and e-commerce. The fact that NetSuite's CRM, ERP and e-commerce components are pre-integrated will give you a leg-up in the deployment because, for example, you don't have to make all of the connections between ERP and e-commerce, Pombriant said. The NetSuite CRM+ product provides capabilities such as complete visibility into all customer interactions on the phone or via the Web; automation tools for the entire customer lifecycle; integrated cross-selling applications; and automatic commission tracking. SuiteTalk helps an organization extend NetSuite to legacy systems and third-party vertical applications.

RightNow offers a suite of on-demand CRM software for sales, service and marketing applications. It integrates into Internet chat, email, telephone switches and other applications that allow customers and employees to get information from the best channel.

Microsoft has done similar work integrating its back office with front-office apps, according to Pombriant. For instance, the company has four ERP applications that it has acquired and developed over time, and it does a good job of integrating CRM with all of them.

"It is not as difficult as it was a few years ago," he said, "when vendors had to figure out how to pull it all together and had to hire expensive consultants and systems integrators to make it all work."

SaaS CRM and ERP integration options

Once an organization has analyzed the systems that will be touched by the integration process, it can start looking at the connectivity options. Depending on the SaaS provider, examples of options include:


  • Writing its own connector.
  • Using a pre-built connector from the SaaS provider.
  • Buying a connector application or appliance from a third party.
  • Using an SaaS connector.
  • The appropriate option is determined by the complexity level of the business process flow to be integrated. For something as simple as synchronizing CRM with a customer master database, it can be easy to write a connector. But for something more sophisticated, like automating a business process that crosses multiple systems, organizations might want to consider a middleware appliance.

    Writing connectors might be the only option if the organization maintains a lot of custom-built applications, but it can be costly in terms of employee labor. Labastida said that one of his clients learned the hard way about trying to do the data connection on an ad hoc basis. Every time they added a new object in Salesforce.com, they had to pay a consulting company $250 per hour to connect the new object into their ERP system. They ultimately bought a data integration package that allowed them to make these changes in-house, drastically reducing the amount of time and money required to add new features to the CRM system.

    On the other hand, better integration may be able to save the organization time and money, and reduce staffing requirements.

    "If I am a sales guy and I want to close a deal with a [customer or prospect], I might need to see from the accounting system if the client's account is on hold," Labastida said. "The only way to do that would be by getting a fresh update from the accounting system. When I close a sale, I want that to automatically kick off a process in the accounting or ERP system to fulfill the order."

    The only integration constant is change

    One of the biggest concerns about tightly integrated systems is that, over time, changes in one set of applications can break the connection to the other pieces.

    "A lot of the SaaS vendors are so new that their APIs are not clearly defined, and so there are not a lot of connectors to them," Labastida said. "Older SaaS providers like Salesforce.com have had time to attract a lot of industry support. But even when an established vendor upgrades its SaaS application, the change can sometimes break the connection to other enterprise apps."

    The leap to SaaS CRM does not have to be tricky or complicated. It all depends on the goals of the organization. If the main objective is a quick fix to get the sales department excited and better organized, many of these benefits can be achieved with a simple installation using mashups to integrate into ERP on the fly.

    On the other hand, if the long-term plan is to improve the efficiency of the entire organization, it makes sense to start sooner, rather than later, in analyzing all of the pieces that go into the business process. From there, an organization can start to map out the technological approach it will use to tie these processes together more effectively, preferably with integration software or services provided by the SaaS vendor or third parties that are in the business of keeping up with revisions to your enterprise applications.


    Don't miss the other installments in this CRM integration series
    * CRM application integration with Web services
    * Benefits of ERP-CRM integration
    * Integrating CRM with business intelligence tools
    * Four steps for an effective mobile CRM implementation

    About the author


    George Lawton, ContributorGeorge Lawton, Contributor
    George Lawton is a journalist based near San Francisco, California. Over the last fifteen years he has written over two thousand stories for publications about computers, communications, knowledge management, business, health, and other areas which interest him. George is currently editing the E/E Letter, a newsletter dedicated to providing balanced coverage on the research, regulation, and business of suspected endocrine disruptors.

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