“Back Office CRM” is Critical for Complex Sales Processes


Share on LinkedIn

As the market for customer relationship management (CRM) solutions matures, more and more companies are realizing that traditional, stand-alone CRM systems can become a real barrier to business efficiency. This is particularly the case for complex manufacturers running sales cycles that involve not just front office sales personnel, but also back office engineering and manufacturing functions.

In this article, I will discuss the rationale for “back office CRM”—CRM integrated tightly with enterprise resources planning (ERP) functionality so that all the information about a customer from throughout the enterprise can be attached to a customer record. I will use the story of Data I/O, a company that has successfully implemented back-office CRM, to demonstrate some of the best practices that complex manufacturers ought to consider.

A lack of communication

Any company using a CRM solution—regardless of the complexity of their sales cycle—is trying to treat the customer the way they want to be treated. They are also trying to maximize revenue from each customer. Some of the information that allows a company to accomplish these customer-related goals is not resident in the CRM system; it is in back office systems including ERP. Unfortunately, in many companies, salespeople and other customer-facing employees are either not willing to explore an ERP system to find customer data or are actively discouraged or prevented from using it.

Some of the information that allows a company to accomplish these customer-related goals is not resident in the CRM system; it is in back office systems including ERP.

As a result, customers and prospects place a call to a company running traditional CRM, they find the person who takes their call doesn’t know what to say. The customer service representative or sales person on the line has to put them on hold and look for information, or call someone else internally to get the information the customer or prospect is looking for.

Disconnected CRM and ERP systems also prevent sales and customer service personnel from being proactive. As long as a customer is on the line, why not ask about the status of overdue invoices? If there is no integration with finance, how do you know the status of their account?

What if a customer is asking about the status of their order, which is currently being manufactured? Without visibility to shop floor activities, how can a customer service representative provide an update? And in the case of a company running complex, engineering-intensive sales cycles, how can sales or customer service personnel use CRM effectively if it does not provide access to the back office systems like document management or engineering?

Practice versus theory

In theory, it should be possible to integrate a standalone CRM solution with ERP. In practice, however, these integrations can be expensive, time consuming and even fail completely. Integration of back office systems like ERP with “cloud” CRM solutions can be even more challenging.

In theory, once the integration is done, a company is all set with back office CRM, But in practice, processes change, product offerings change and the market forces changes in the way companies interact with their customers. What a company sells, how the company sells and what customers demand can all change rapidly. So the real underlying need is for back office CRM that can organize and present data from the back office ERP systems in a flexible system that can easily adapt and change over time.

Management should be able to see everything they need to see about a customer any way that they want to see it. So while integrations may prove rigid and expensive to change, the ideal back office CRM is flexible, easy to use and should allow you to configure a solution to meet immediate needs as well as needs that have not yet been anticipated.

Another key difference between theory and practice is that in theory, CRM only presents data to front-office personnel working directly with customers. But in practice, data from CRM functions is essential to back-office functions including sales forecasting and purchasing. Advanced management practices like Sales and Operations Planning become difficult without deep integration between front and back office systems.

Case in point

Data I/O Corporation of Redmond, Washington, manufactures equipment and software required to add data and firmware to semiconductor devices. The company’s FlashCORE technology is the choice of leading manufacturers of wireless devices, handsets, television/set top boxes, digital cameras, automotive electronics, appliances and industrial products. This requires close collaboration with customers and by definition, a manufacturing environment characterized by small volumes of a large variety of complex products. Data I/O implemented IFS Applications as their ERP solution in 2006, and now runs IFS software components for Finance, Distribution, Manufacturing, Engineering, Sales & Marketing/CRM, Document Management and Quality.

Quote to order processes were automated through the IFS Sales and Marketing module and a series of Microsoft Word templates designed by Data I/O Business Analyst Elaine Johannsen.

“We created the templates in both English and German,” Johannsen said. “The templates pull information from the appropriate tables in IFS Applications, so the process is pretty automated. We wrote some application program interfaces on the back end to take these quotes and turn them into customer orders. This means the system will automatically generate the customer order instead of having to send it to an office assistant to generate it from scratch. This automation also gives us the opportunity to generate statistics on quote-to-order ratio.”

Integration between CRM and ERP allows Data I/O to deliver superior customer service.

“In the past, the sales force tools we ran were not tied directly to the back end of the system,” Johannsen said. “But now, most records in our CRM are tied to the customer number in our back office ERP system. That means that we can see all of their serial objects, support issues, customer orders and the invoice status. Any time our sales or customer service staff interacts with a customer, they can see if they are having any open work order or equipment issues, see what equipment they have, see if they are on contract or off contract. Does the customer have any open support issues or return material authorizations (RMA)? If they have outstanding accounts receivables, we can also see that and give them a little reminder about that.”

Data I/O also uses the tight links between front and back office data to increase the percentage of customers on maintenance and support contracts.

Integrated systems are even more important given the international nature of Data I/O’s customer base and the frequent use of intra-company transactions.

“There is a quick, high-power tool any user can use to query the data,” Johannsen said. “Sixty days before the contract is up, we want to contact the customer to remind them of the need to renew, and our salespeople can pull the appropriate list, do a mail merge and contact those customers in the appropriate timeframe.”

According to Diane Smigel, vice president with MSS Technologies, the IFS partner that implemented IFS Applications for Data I/O, the manufacturer’s CRM system would be useful for many other complex manufacturing operations.

“I was at a roundtable discussion a while ago and heard the CEO of another complex, engineer-to-order manufacturer describing the enterprise system he wanted,” Smigel said. “He wanted the salespeople to have a template that would guide them through the pricing and order processes and provide a lot of help and support for them so things would be consistent and complete. He didn’t think any ERP system could do that. Yet that is exactly what Elaine has implemented. She actually designed the Word templates and introduced them into the system and into the hands of their salespeople. That’s pretty impressive for a complex, largely custom, sales process.”

Integrated suite

Once a project gets past the quote-to-order process, IFS Applications facilitates the complex manufacturing process in a single enterprise platform, which Johannsen says is a marked improvement over the company’s earlier systems. “We are a worldwide organization, and we have a subsidiary in Germany and two in China—in Hong Kong and Shanghai,” Johnannsen said. “Everyone was using their own ERP, so there was no visibility to inventory or financials. But now, we are on the same database worldwide.”

Integrated systems are even more important given the international nature of Data I/O’s customer base and the frequent use of intra-company transactions. “We have large, worldwide customers, so the fact that all of our offices have access to IFS Sales and Marketing is critical because each sales area can see what is happening with their customers in other parts of the world,” Johannsen said. “For instance, we might have a German customer that also has American operations. Our German sales force can see what is going on with their customer elsewhere in the world.”

Johannsen also says that intra-company order processing was valuable. The system automates the transactions and has saved the company countless hours of work on about 35,000 transactions per year.

Data I/O’s story is also remarkable in that after implementation and go-live, they have made almost no use of outside consultants to configure and evolve their complex, integrated system. This would be a struggle had they opted for another standalone CRM package with a point-to-point integration with their ERP solution. They had tried that strategy before without success.

Companies like Data I/O need back office CRM, which in their case was accomplished by running an ERP solution which included a CRM module. But even for companies with a simpler, more straightforward sales cycle, back office CRM could help deliver the next level of customer service and business efficiency.

Jorge DeFreitas
Jorge DeFreitas, Senior Advisor for CRM with IFS North America, has more than 1 years in CRM technology management. DeFreitas came to IFS from a CRM vendor purchased by IFS, where he was a product manager. Besides product management and R&D, DeFreitas is also involved in sales and prospecting activities at IFS


Please use comments to add value to the discussion. Maximum one link to an educational blog post or article. We will NOT PUBLISH brief comments like "good post," comments that mainly promote links, or comments with links to companies, products, or services.

Please enter your comment!
Please enter your name here