Should SugarCRM Turn SugarERP? No. Integrate? Yes!
5 years ago, the hottest buzzword in IT was SaaS - Software as a Service. SaaS turned into cloud computing, and cloud computing turned to PaaS - Platform as a Service. PaaS became a natural evolution for traditional SaaS providers, realizing early on that they needed to provide a simple, yet powerful platfrom to extend their core functionality. Although stand alone PaaS solutions have been around for years, Saleforce.com, the on-demand CRM maker, was the first vendor to fully utilize their PaaS offering, Force.com.
But since applications built on top of PaaS solutions are only limited by the developers imagination, software developers began developing fully functional, stand alone applications, which had nothing to do with the ‘original’ application build on top of that particular PaaS, CRM in the case of Force.com.
SugarCRM, the leading open source CRM solution, provides their own development platform, called SugarForge. Initially, trivial extensions to SugarCRM core functionlaity were built, such as integration with external mail software and browsers. During a recent visit to SugarForge’s application directory, I was surprised to find attempts at building fully functional ERP solutions on to of the platform.
Should SugarCRM endorse these solutions, or even develop their own ERP system on the based on SugarForge? I say No. There are two dimension to that question which require further discussion - a technical dimension and a commercial dimension.
ERP Vs. CRM - Technical Dimension
ERP and CRM systems are different. Obviously, functionality provided by ERP applications far exceeds that of CRM. But adding new functionality is relatively easy when the platform you run your application on is robust and flexible, and SugarForge sure is.
But there is one major difference, which will require major changes in the platform to become ERP ready - transaction processing. ERP systems are designed to support on business transactions. Think of a ’simple’ transaction occurring tens, hundreds or even thousands of times a day in a manufacturing company - a new production order is opened, B.O.M for that order is exploded, purchase requisites are automatically generated, stock is allocated for required materials, machine and personnel time are scheduled, and on and on. That type of transactional processing requires dedicated mechanisms in the underlying platform. CRM systems are much more static and atomic. Relationship between objects (Account and Contact, Lead and account, for example) is more simple.
ERP Vs. CRM - Commercial Dimension
From a commercial prospective, there is a huge difference in terms of sales cycle and channel partners between ERP and CRM. Sales cycles for ERP solutions are notoriously long, as company wide requirements should be met, and budget for the project is usually big. CRM solutions serve the sand possibly support staff, making the decision making process much more simple.
The partners channel is different also - most ERP implementations require a local partner to implement and customize the selected solution to fit to customer requirements. CRM applications, on demand in particular, have a very small initial overhead, and once basic parties (contacts, leads, contacts etc.) have been imported, the solution is ready to service the first users.
For sugar to move to such long sales cycles and to become dependent on a partners ecosystem, would mean putting too much energy away from of its main target audience - the salesforce.
The solution? Integrate with ERP
What SugarCRM do is work with an open source ERP vendor on tight integration. Combine a fully functional open source ERP with a CRM solution, add open source BI to the mix, offer everything both on demand, as well as on site, and you have a win-win-win-win situation (the forth winner is the customer). A source tells me that work is underway.
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