ERP Vs CRM: Different Approaches to Business Processes
When running a business, the primary concern is to increase efficiency of business processes and the primary motive is to increase productivity and revenue of the business, essentially bringing in more customers and building a steady consumer base. In the world of business, anything that can improve performance by even 1% can have significant impact on the market and the future of the business and may very well start a new era.
Businesses run on strict protocols and deal with their business processes by the book and hence anything that can speed up the process without compromising the integrity of the processes is a welcome change which can make the business much more profitable and much more efficient in its day-to-day operations. This article will look into the aspects of CRM vs ERP demand with respect to the functions they have in business processes.
ERP and CRM are two different breeds of business management software. These are two different types of programs that focus on entirely different problems which may at time overlap and therefore create confusion in the minds of the uninitiated. To prevent exactly that situation from arising, we are here to help you understand the key differences between the two.
CRM vs ERP difference is not a new topic and there is no need to be flustered if you are lacking in knowledge about these two business management software.
Business Management Software:
Business management software refers to any and all kinds of software that can be and are used to efficiently manage business processes and business operations.
Business management software make it possible for companies with very large employee structure to keep a track of its daily operations and progress and make sure that the assigned projects are being completed on time.
These software make it easier for the businesses to maintain control over their business processes and intervene where necessary to make the necessary changes to further optimize business operations.
No.1 Business management software represents everything about your business in data form making it easier to understand and take the requisite action to either meet the targets or get rid of the root of the issue.
With the help of business management software, one can streamline their businesses and create a competitive environment for their employees which can be used to stimulate employee growth and consequentially business growth. The CRM vs ERP demand stems from these functionalities in business process management.
No.2 Using a business management software can really aid the management to keep track of the daily business processes and identify trends and make amends or find solutions before a problem reaches the critical point of disrupting the entire chain and brings down productivity. One can observe the related data at a single place, make inferences and create business strategies and goals to be achieved based on the data available and create an estimate which can used for projecting future data.
This projection can be either positive or negative for the business depending on the context and the management can then use whatever means to achieve the intended result or push the business in the intended direction based on the information provided through such software.
Two of the most prominent business management software are CRM and ERP. CRM vs ERP definition is the simplest way of distinguishing between the two.
At one hand CRM stands for Customer Relationship Management which deals with establishing long lasting relationships with the consumers which sees the said customer return again and again whereas an ERP stands for Enterprise Resource Planning which helps the businesses to effectively and efficiently manage various resources at their disposal and continuously optimize their performance.
CRM – A closer Look:
CRM or Customer Relationship Management software are used extensively in the field of sales and customer management. CRM is focused on storing all of your customer related data, from feedback, to survey answers to purchasing history, CRM helps you compile all of your customer related data in one place and allows for easy access to the database by all relevant parties.
The database that is created using CRM uses standard form of storing data and provides graphical representation of the data allowing for easy usage and understanding of the data along with providing ease of sharing. The software also ensure that the data collected is safe in the database and cannot be played around with and maintains the integrity of the database.
CRM provides a company with the ability to maintain a database that can be updated in real time with more and more customer interactions and customer related data which can help companies create business strategies based on the current market trend and customer purchasing behavior.
This data is important as it helps the company in outlining and predicting future market trends and customer behaviour and prepare and execute business plans accordingly.
CRM software creates a link between people working in sales and people overlooking customer support. Sales department can easily retrieve data regarding any old customer which would help them in formulating ways to increase sales or ensure that the customer comes back to make a purchase. Alternatively, management can use the data to create relationships with the customers and create customized personal greetings and messages to inform them about the latest schemes and offers to ensure recurring business from the customers.
CRM helps businesses maintain a personal relationship with their customers which in turn boosts their chances of building a stable customer base that always returns to conduct their business with the company.
CRM helps your sales department to manage customer information and efficiently and effectively pursue leads which can be converted and move customers along the sales cycle at a much quicker pace then before ensuring optimum performance. CRM systems store every customer interaction and feedback to create personalized letters, messages etc to enhance customer experience.
CRM software is an effective tool in automating marketing campaigns by analyzing purchasing pattern in customers and creating strategies to take full advantage of the trend. Offering customer support becomes much easier and the customer feels much more related to the business as the support team can go through your customer’s purchase history and offer support tailored specific to the needs of the particular customer.
How CRM Works?
CRM software takes away the burden of doing redundant tasks from operators and automates data linking and storage making it much easier to enter new data and retrieve all data and any data that might be related to it. CRM effectively streamlines the sales and customer support and service process and makes it easier for the sales department to pursue and convert new leads.
Optimization of marketing processes based on customer behavior, management of social media accounts to provide real time updates with regards to online user engagement, streamlining of sales cycles, identifying new trends and creating effective marketing for it, provide quality customer support and automation of repetitive tasks make CRM software is a necessity in any business due to the ease of data entry and convenience of having all related data in one place.
A CRM database is a goldmine of customer information which can be used to create future business policies and optimize current marketing and business processes. Management can use the sales and customer data stored in the CRM database to create sales projections, customer support can use it to create relationships, making the customers feel part of the business family, it can be used to create a loyalty program to reward returning customers and verify customer information in cases of online transactions and by the stores to create personalized invoices. The CRM database serves the primary purpose of customer retention and conversion of new leads.
The CRM software has a number of core features and modules that make it easier for the businesses to optimize business processes.
Here are a few of the many modules and features supported and offered by CRM software:
Lead Management: the most important aspect of a customer relations or sales department is finding and managing leads. Conversion of leads is one of the best ways to get more customers for the business and constant soliciting of these leads with periodic messages, newsletters, emails based on their purchase history and provide personalized care and support to make them come back to the company to complete more transactions and if possible, of higher value.
The more the leads you convert the bigger your customer database becomes and the higher the probability of them coming back. Leads management is an essential element of getting new customers and CRM software makes it easier for you to effectively manage all your leads and compile the information at a single place.Top 10 Free CRM Software 2019
Contact Management: contact management refers to managing relationships with your existing and past customers through messages, emails etc. Contact management allows you to access all the information you have of your client.
The information can be about past purchases, browsing history on your online store, personal information provided by the client or information provided through feedback or surveys. All this information can be accessed to create a detailed profile of your customer base and identify the products/services that you need to put more focus on and the make customer support and service changes as required for a better customer service experience.
Sales Management: CRM software make it much easier to document and store sales data and the corresponding customer data. You can track which of your product/services is in high demand and the demographic in which it is popular allowing you to come up with tailor-made sales and marketing campaigns to increase the market share of the product/service. Sales management allows businesses to track their revenue stream and streamline their sales cycle as per the customer demands and purchasing habits.
Marketing Management: CRM helps in using the data stored on all your customers to create a marketing campaign that is customized to suit your target demographic and makes it much more likely to increase sales. It increases efficiency and effectiveness of marketing as the data allows the businesses to understand how to market their product/service to which demographic. Marketing management is a key module of CRM software that allows businesses to optimize marketing operations and bring down costs of marketing while increasing the return on investment significantly.
ERP – Did You Know?
ERP or Enterprise Resource Planning is a software the assists in all the possible aspects of your business and is a true business management software. ERP creates a link between all the departments of your business and allows you to have comprehensive control over all of them in terms of tracking their work progress and other performance parameters. ERP manages your business data for you provides a standardized way of monitoring your business.
All your business processes are represented in data form and the ERP database provides an easy to understand visualization along with the necessary data relations and connections to let you make informed decisions and inferences with regards to the performance and productivity of your business.
An ERP database is accessible by each and every employee albeit with different clearance levels based on the job they do. Employees enter and retrieve data in real time allowing to monitor the daily business processes in real time to look for any problems or performance issues with any of your business processes and come up with solutions to fix those problems.
ERP software allows you to identify which business processes or departments need optimization to enhance their efficiency which in turn would increase the productivity of the organisation.
Data is constantly being entered into the ERP system which allows management to foresee any potential issue and troubleshoot before it becomes a major hindrance to the business process.
ERP creates an ecosystem where the management from the ground up stays in constant touch with the lower level employees through real time data entry. Businesses can therefore streamline and optimize business processes, avoid system failures and improve their operations instead of constantly worrying about keeping everything in check as your ERP software does the work for you.
ERP system is an interconnected management software that allows your employees to access standardized information throughout the organisation and any issues in the system can be identified way before it affects business operations. An ERP software brings your whole business organization to your computer screen and lets you monitor every micro detail.
Every department can update the central database in real time to let the other departments and relative personnel know the status of a particular business process. Any probable issue or current issue gets noticed straight away and does not cause as much delay in business operations and management can provide lightning fast solutions to these problems. CRM vs ERP definitions can be justified in these terms.
You can infer from productivity statistics whether a particular department needs hiring or any specialised help to get them performing at their best. ERP helps you manage your hiring policies to the utmost efficiency. Your business can keep a record of its supply and demand statistics and track its supply chains along with manufacturing and delivery of goods.
You can track the services rendered and get customer feedback in real time and maintain control over the quality and quantity of your goods/services. Your entire supply and delivery chain is tracked online in real time and lets you identify any potential issues in the whole business process or parts of it and come up with solutions to tackle the issue. ERP data can help you formulate business strategies and future plans of the business based on the performance of various departments and the business as a whole.
ERP – The Functions
Some most common functions,
- Warehouse Management (WMS)
- Production chain management
- Supply chain management (SCM)
- Project management
- Lifecycle management of a product (PLM)
- Financial management
- Sales and commercial management
- Quality management
- Features that have specialized software
ERP allows you to manage employee information in a central database. From storing employment records and payrolls to personal information and other benefits that are available to the employees it becomes easier for the employee to claim those benefits and the management to sanction as the employment record can be called up in a few clicks to cross check data.
The payroll of the organization can be easily managed through ERP software and helps you to keep a track of the employees and their salaries and what position they hold in the organisation and their productivity and efficiency can be tracked with respect to their punctuality and efficiency in work assigned.
ERP software lets you manage your entire business from your computer system and lets you create business strategies that encapsulate the entire business by taking all the departments and the related data into consideration. These strategies are impossible to be made without proper and accurate knowledge of the situation in all of the business processes and an understanding of how all the business processes affect each other.
ERP software make it easier to understand the relation between widely different sets of data and provides you with the appropriate visualization to give you an idea about how to manage and control the various business processes.
ERP can do everything you ask for, from managing employee information to managing your inventory information. ERP software is a comprehensive tool for managing your business in its entirety and keeps every aspect of your business within your field of view to provide active supervision. It allows to plan future manufacturing, delivery, purchasing and various other services to be rendered and business processes to be undertaken in advance.
ERP encompasses human resource management, resource management, accounting, sales management, distribution, procurement and much more. Every business process that your organization undergoes is covered by ERP software making it easier for you to manage and monitor your business in its entirety.
The greatest asset the ERP software provides you is that of report and analytics. It creates reports and analysis based on sets of data acquired through various departments. All your financial and accounting data along with human resources management, order, manufacturing, service, and production management services. It gives you a wide overview of everything that is happening in all the business processes in your organisation while also providing data to let you check the minute details.
Different approaches to business processes:
Both CRM and ERP are software used for optimization of business processes. The CRM vs ERP difference lies in their scale and area of application. When asking which one should you use, you have to look at for what purpose is ERP vs CRM mostly used. While CRM is a sales and customer centered software, ERP focuses on the entire business organisation and that is where the CRM vs ERP salary comparison comes into picture.
CRM allows you to build customer relations and earn their loyalty through offers, deals, discounts and special privileges. Your entire sales department can retrieve customer data and use it to draw future sales strategies. CRM focuses on customer retention and exploring and converting new leads resulting in an increase in revenue and sales figures.
ERP on the other hand is built to help you streamline business operations and reduce overhead costs by increasing efficiency of business processes and optimize your departments for the highest possible efficiency.
ERP is best suited for organisations that are either planning to scale up or are already medium/large scale businesses. It allows for seamless co-ordination between different departments using different systems. It allows the management to have a standardised way of monitoring all the business processes in the organisation and get rid of possible issues before they affect the operations and costs of the business.
ERP software are designed to help you optimize your business and bring down costs while simultaneously increase your performance while CRM software are designed to help you increase your revenue stream and enlarge your existing customer base.