Blog 6: Links, integrations, and other exciting connections (#1)
For businesses aiming to optimize their software landscape, the fascinating world of connections and integrations beckons. The distinction between connections and integrations isn’t always crystal clear. The latter sounds more appealing, so from a commercial standpoint, it’s preferable to talk about integrations. Commonly, we refer to it as an integration when someone can control another system or access information within it without leaving the original application. Consider, for instance, generating a quote in a configurator with a single click from within a CRM system, or viewing inventory or scheduling information in an ERP system from within a configurator. The exact terminology doesn’t matter much to us; what’s important is that the concept has a name.
The Customer, the Product, and the Factory
Before delving into system connections, it’s useful to refresh our memory about what a CPQ system does precisely. In summary, a configurator helps you sell your products to your customers in a controlled manner. Subsequently, it provides your production process (your factory) with the necessary information (a parts list) to deliver the desired product or service.
In essence, a configurator generates a list of everything you need to clarify what needs to be delivered to your customer, also known as the digital product definition (DPD). For the purists: a product can also be a service, article, item, parts list, process, travel cost, commission, etc. Likewise, your “factory” (where your products are made) could be a manufacturing industry, assembly, engineering, finance, data center, real estate office, etc. Indeed, the applicability of a configurator is very broad!
Stick to Your Knitting
The configurator plays a vital role in the process from customer to production. It’s crucial for the configurator to access customer and article information. Most configurators are not particularly adept at managing this information.
Speaking for ourselves and using our configurator Merkato as an example: knowing that our software can’t compete with most specialized CRM systems in managing customer information, and similarly, that our software for managing article information can’t compete with most specialized ERP systems, we rarely offer this capability. Think of the well-known saying: “Shoemaker, stick to your last.”
Technically, it’s important to note that our configurator can communicate with virtually all modern CRM and ERP systems. Some systems lack an API or web protocol, but then the connection can always be made via an intermediate database or a software development kit (SDK).
CRM Connection
A CRM system is incredibly useful for managing customer information, appointments, notes, and—very importantly—sales forecasting: the ability to predict sales futures. Every (solid) CRM system provides the ability to compile a list of all sales opportunities (open quotes). Multiplying the value of sales opportunities by the chance of success gives you an intriguing glimpse into your future revenue. And a good CRM system doesn’t have to be expensive. This makes me a big fan of CRM systems, which I have been using gratefully for years.
In other words, thanks to the connection with a CRM system, the CRM system provides input (contact information) to the configurator, and the configurator then generates the output (quote information) and sends it back to the CRM system.
ERP Connection
As mentioned, a configurator creates a list of articles needed to fulfill customer wishes. But to do that, we need article information, which is stored in an ERP system. An ERP system contains not just your pricing information (like cost price, sales price, purchase price, material price, etc.) but also information about your suppliers, inventory, minimum order level, delivery times, etc. In short, much more information than a configurator ever needs. It’s a perfect fit! The order rolls out of the configurator into the system, complete with delivery address and the name of the customer/debtor (from CRM).
In other words, thanks to the connection with an ERP system, the ERP system provides input (article information) to the configurator, and the configurator then generates the output (order information) and sends it back to the ERP system (including parts lists and sales prices).
We often see businesses hesitant about connections, especially regarding the ERP connection. We’re not exactly sure why. The information transfer is fundamentally quite straightforward. The complexity, if any, generally lies in how the ERP system wants to receive the order back. An order in an ERP package can internally be a rather complex assembly of articles, make parts, processes, configurable parts list lines, fixed parts lists, generated parts lists, saw lists, smart item numbers (which the configurator must ‘calculate’), articles or parts lists that do not yet exist and thus must be created, and much more.
Fortunately, our team has vast experience in connecting with such systems. Thanks to our standardized connections, we can quickly coordinate with you or your ERP provider to manage the final setup.
Reflection
As this article demonstrates, connections receive a lot of attention. Sometimes, it’s also good to pause for a moment of reflection.
I believe, for example, that we should question what exactly we gain from each automation. Every connection costs money. And while we all dream of a completely error-free and automated process, sometimes it’s better to take it step by step.
In my view, it’s okay to start by improving just 95% of your processes. It’s not a disaster if someone needs to manually synchronize some addresses with the configurator once a week. It only takes two minutes. And the last 5%? They’ll come in time. It’s not necessary to obsess over achieving 100% optimization from the get-go: Rome wasn’t built in a day. Do you know the cartoon of the knight who doesn’t have time to talk to the machine gun salesman?
Conclusion
The smart configurator is playing an increasingly important role within every organization. And thanks to connections and integrations, information flows more smoothly through the organization. Connections between systems require some time and attention but shouldn’t cause headaches. On the contrary, good connections allow you to choose the best solutions for each part of your process. We call this a best-of-breed approach.
In the second part of this two-part series, we will delve into some technical aspects and discuss connections with CAD systems, CAM systems, and e-commerce.
Pour les entreprises souhaitant optimiser leur paysage logiciel, bienvenue dans le monde fascinant des liaisons et intégrations. La distinction entre les liaisons et les intégrations n’est pas toujours évidente. La dernière sonne mieux, donc, d’un point de vue commercial, il est préférable de parler d’intégrations. Généralement, nous parlons d’intégration lorsqu’une personne peut contrôler un autre système ou consulter des informations sans quitter l’application initiale. Pensez, par exemple, à générer un devis dans un configurateur en un seul clic depuis un système CRM, ou à consulter des informations (telles que le stock ou la planification) dans le système ERP depuis un configurateur. Le nom exact ne nous importe pas beaucoup : l’essentiel est que le concept soit nommé.