Front-To-Back-Office Integration

Rex

Front-To-Back-Office Integration

Rex

Independent research suggests that the area of back-office connectivity is not adequately
addressed by many CRM implementations. Where this is the case, customer data cannot be
shared effectively and business processes are punctuated by errors, delays and paperwork.
Over the long term, this will impact negatively, and significantly, on overall customer
satisfaction, as well as increasing transactional cost on an exponential basis

Rex

This whitepaper demonstrates how front-to-back-office integration enables small and
medium-sized businesses (SMBs) to address these issues. Specifically, it details how prepackaged,
integration-ready solutions from Sage CRM allow SMBs to seamlessly connect
their business processes, applications and data to (1) manage customer relationships more
effectively, (2) reduce costs and (3) increase profitability over the long term. Significantly, this
can be achieved without the cost and complexity normally associated with projects of this
type.

Rex

Gartner research suggests that significant information ‘blindspots’ still exist after many CRM
project roll-outs1, particularly with regard to customer transaction history. One potential
explanation is that these projects have not adequately addressed the issue of back-office
connectivity. Overly ‘front-heavy’ implementations can result in the operation of two parallel,
but separate customer datasets; one in the back-office which is financial, transactional and
quantitative in nature, and the other in the front-office which, by contrast, is non-financial,
interactional and qualitative.

Rex

The customer management and business process challenges that
companies face today
Different departments use different application types to manage customer information; frontoffice
employees use CRM applications that support customer-facing activities such as sales,
marketing and customer service whereas back-office employees use ERP applications that
support transactional, reporting and compliancy activities, such as invoicing, accounts
receivable, cashflow management and financial reporting. While front-office applications
have historically been developed around the idea of cross-organisational collaboration, backoffice
applications, by contrast, have been insular in nature, with the finance department slow
to open up its data and applications to other parts of the organisation. Additionally, many
companies have continued to purchase their CRM and ERP applications from separate,
specialist vendors. This combination of factors has meant that business applications have
struggled to address key business process needs where the customer lifecycle crosses the
front-to-back-office divide, resulting in: (1) departmental silos of information, (2) unnecessary administrative overhead and inefficiencies, (3) verbal sign-off requirements and (4) process
duplication.

Rex

The Quote-to-Cash cycle (diagram below) is an example of where these issues can arise.

Given the number of potential parties involved in the quote-to-cash cycle: (1) account
management, (2) sales order processing, (3) shipping and (4) accounts receivable, errors or
omissions at any stage in the process can be costly and time-consuming.. Additionally, frontoffice
staff, such as account managers or customer service agents, may struggle to provide
order status updates to their customers because of limited visibility on the transactional
information contained in the back-office system.

Rex

The workflow management capabilities of today’s ERP and CRM applications have gone
some way in addressing these issues by introducing exceptions monitoring, mandatory fields
and removing the need to re-key and re-check information as transactions pass from one
stage to the next. This in itself, however, does not fully address quote-to-cash business
process requirements if the back-office environment remains disconnected from the frontoffice
system. If a member of the sales team, for example, generates a quote based on outof-
date pricing information or stock availability, and subsequently converts this quote into a
customer order, it is likely that this error will only be identified later at the order approval or
shipping stage. The order will need to be passed back to the salesperson for correction and
then re-processed by the finance department. As a result, order completion is delayed for the
customer, administrative cost increased for the company and workload is unnecessarily
duplicated for sales and finance staff. Clearly, where this scenario arises on a regular basis,

Rex

The fundamentals of front-to-back-office integration
The aim of front-to-back-office integration is to bring together disconnected business
processes (e.g. quote-to-order and order-to-cash as part of the overall quote-to-cash cycle),
applications (CRM and ERP) and datasets (financial data and non-financial), and translate
them into a mechanism to: (1) manage customer relationships more effectively, (2) reduce
costs, (3) increase profitability and (4) achieve sustainable competitive advantage over the
long term.

Rex

In simple terms, front-to-back-office integration is made up of three inter-related elements:
1. Consistent data between related entities (e.g. ‘company’ and ‘account’) within the
CRM and ERP applications.
2. 360 degree customer visibility, regardless of whether customer data originates in the
CRM application or the ERP application
3. “Straight-through” processing which enables a user to initiate a transaction (e.g.
booking an order) which then automatically triggers all related business processes as
appropriate (e.g. order approval, shipment, invoicing etc) and passes seamlessly
from one application (e.g. CRM) to the next (e.g. ERP) without the need for extensive
manual intervention (e.g. re-keying information, paperwork or verbal sign-off).

Rex

Front-to-back-office data consistency
Being able to share consistent data between the CRM and ERP applications is an essential
requirement for front-to-back-office integration. Customer data, however, is structured
according to specific application types. Organisations, therefore, need to be able to create
dynamic links from entities within their CRM system (such as the ‘company entity), to the
corresponding entity within their ERP system (such as the ‘account’ entity), whereby changes
in either are propagated in both. This ensures that both front-office and back-office staff are
working with the same information which reduces or removes the need for re-work and the
potential for error.
In the quote-to-cash example cited previously, these capabilities would enable the account
manager to generate a quote based on the most accurate and up-to-date information
available at the time and, as a result, eliminates the potential for error and process
duplication down the line.