What are CRM & ERP systems, what are the differences and what are the advantages?
Today’s technology offers companies an unprecedented advantage. Companies can compete by streamlining processes and accessing data in real time. In addition, today’s data analysis technology enables companies to predict and plan future events accordingly. These tools, which include both Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) software, enable companies to control their success in today’s marketplace. While the ERP and CRM platforms are similar at first glance, they are clearly different. Understanding each platform is critical to the success of your system.
CRM &ERP what are the differences?
Enterprise Resource Management (ERP) and Customer Relationship Management (CRM) are two enterprise management systems that often integrate policies, processes, procedures, and computer documentation and tracking to improve business operations and productivity. By integrating these two systems, a company can manage all aspects of its operations by monitoring documentation and modifying repeatable processes.
In some areas these systems overlap and can be fully integrated into others. However, since their core functionality is completely different, it is best for a company to initially consider them as separate, autonomous systems. It is easier to see how ERP and CRM play a role in increasing efficiency and sales when analyzed separately.
Enterprise Resoure Planning Software (ERP)
ERP software is primarily designed to make a company’s processes more efficient. By better managing all key functions such as accounting, warehousing, inventory and supply chain, the ERP software enables the company to focus on the essentials: Data. With integrated ERP software, employees can update the platform with important information in real time. .
ERP systems use common databases managed by a database management system to provide an integrated and constantly updated view of core business processes.
ERP systems help you to monitor and control your company resources such as raw materials, production capacities, vehicle fleet, personnel, as well as the status of the respective business processes such as orders and pay slips.
The applications that make up the system share data across different departments (manufacturing, purchasing, sales, accounting, etc.) that provide the data. ERP systems facilitate the flow of information between all business functions and manage connections to third parties (typically customers and suppliers). The ERP system integrates different organizational systems and thus facilitates interaction between them. However, the development of an ERP system differs from the development of traditional systems. ERP systems run on a variety of computer hardware and network configurations and typically use a database as information storage.
Worldwide sales Enterprise Ressoure Planning Software (ERP) worldwide from 2013 to 2017 (in billions of US dollars)
Diagram source: statista.
Customer Relationship Management Software (CRM)
CRM software enables organizations to manage and analyze customer interactions and data throughout the customer lifecycle. The aim is to improve customer relations, support customer loyalty and increase revenue growth. CRM systems can compile data from a variety of different communication channels, including a company’s website, phone, email, live chat, marketing materials, and social media. Companies learn more about their target groups and how they can best serve their needs through the use of CRM and other systems. In addition, CRM systems provide information about customers, purchase history, purchase preferences and in-house customer service.
However, not all CRMs are identical. Almost all CRM programs consist of various modules such as marketing, sales and service, all of which are used by the respective departments of a company.
With an estimated global market value of over $40 billion in 2018, CRM technology is widely recognized as the fastest growing category of enterprise software, largely covering the broader Software-as-a-Service (SaaS) market. Microsoft, SAP, Salesforce, Oracle, Adobe Systems, Odoo, and Hubspot are some of the largest vendors in the CRM market.
Customer Relationship Management (CRM) Software revenue worldwide from 2013 to 2017 (in billions of US dollars)
Diagram source: statista.
Advantages of CRM & ERP Software
The business environment of companies is becoming increasingly complex and generates a wealth of data. If customer information is not handled correctly, forecasts, decisions and ultimately the sales and purchasing processes become the biggest problem for efficiency. Satisfied customers belong to the most important goods of a company. To meet these challenges and achieve more profitable customer relationships, companies typically purchase resource planning (ERP) and customer relationship management (CRM) software. In the following, we will discuss how the respective systems can help you in concrete terms.
Advantages of CRM systems
Categorization and identification of sales opportunities and leads
A CRM system can help you easily, quickly and accurately identify and add new leads. By focusing on the right leads, sales can prioritize opportunities to close deals, and marketing can identify leads that need more attention and processing. Sales and marketing can focus their attention and energy on the right customers by providing complete, accurate and centrally held information about customers and prospects.
More recommendations from existing customers
Cross-selling and up-selling opportunities become clear through a better understanding of your customers – and give you the opportunity to win new business from existing customers. You will also be able to satisfy your customers with better service and transparency. Satisfied customers are likely to become regular customers and, according to some studies, regular customers spend up to 33% more.
Improving customer service
Today’s customers expect fast and individual support at any time of the day or night. A CRM system can help you provide the quality service customers need. Your employees can quickly see what products customers have ordered, and they can quickly get a record of each interaction so they can give customers the answers they need.
Improvement of services and products
A good CRM system collects information from a variety of sources in your organization. This gives you additional insight into your customers’ needs and what they are saying about your business. This enables you to improve your offer, identify problems at an early stage and close gaps.
CRM systems can usually be implemented very quickly and easily. A cloud-based system requires no special installation and there is no hardware to set up, keeping IT costs low and eliminating the headaches of version control and upgrade plans.
In general, cloud-based CRM systems are charged based on the number of users who access the system and the features you need. This can be very cost-effective in terms of investment costs and is also extremely flexible – so you can hire and add more people as your business grows. Salesforce is also flexible about functionality – you don’t pay for features that aren’t useful to you.
CRM systems with marketing automation capabilities can automate repetitive tasks at different points in the lifecycle to optimize marketing activities. For example, when potential customers enter the system, it could automatically send marketing materials to them, typically via email or social media, with the goal of turning a sales lead into a fully-fledged customer.
Sales automation tools track customer interactions and automate certain business functions of the sales cycle required to track and acquire new customers.
Automation of customer service
Customer service automation can include pre-registered audio to help solve problems and disseminate information. Various software tools integrated with the agent’s desktop tools can handle customer requests to reduce call time and simplify customer service processes.
Geolocalization & local marketing
Some CRM systems include technologies that can create geographic marketing campaigns based on customers’ physical locations and sometimes integrate with popular location-based GPS applications. It is also possible to use geolocalization technology as a network or contact management tool to find interested parties by location.
CRM systems help organizations optimize processes by streamlining day-to-day workloads and enabling employees to focus on creative and higher-level tasks.
Work from anywhere
CRM technology enables employees to do their jobs anywhere via mobile applications, web interfaces and offline access. You have a range of productivity tools to enable you to edit processes and business relationships. When teams can’t access customer data when they leave the office or are away from their desktop or laptop, businesses lose a lot of flexibility. Mobile CRM means that when events occur, any user can connect, update, and take on-demand action. That includes: Create a new service case from an email received via a mobile app, reference the current contact history during a customer call, update opportunity and pipeline details when you travel from a customer visit, and CRM follow-up activities in response to emails received. In addition, it contributes to increasing employee satisfaction and productivity and thus to increased customer satisfaction.
Onboarding of employees
A robust CRM platform allows you to quickly attract new salespeople and equip them with pre-defined email, sales processes, customer data and other tools to succeed. This significantly reduces the training period and ensures that new employees can be integrated into existing teams more quickly.
Lean decision-making processes
A well-informed decision maker with real-time data access can quickly make adjustments to respond to the business and market environment. CRM systems enable you to gain accurate insights from real-time and on-site data. This means that you can immediately adjust your strategies or tactics to take advantage of an opportunity or avert a crisis.
Higher data security
A CRM system enables the centralized storage of confidential customer data and business information on a single platform, rather than on different and disconnected desktops. This means that you can make your budget, personnel and capital infrastructure more efficient. The current CRMs offer you a detailed rights and role system that allows you to set the parameters so that only authorized employees can access the data.
Advantages of ERP systems
The implementation of ERP software has many advantages. It can help improve productivity, increase efficiency, reduce costs and streamline processes.
The introduction of ERP software can require a significant investment, but the costs and risks associated with not making the investment are often higher. Instead of spending resources on multiple systems that require dedicated staff, infrastructure, support teams and licenses, all these costs can be concentrated on one ERP system. And if you spend more on different systems than you do on a centralized ERP, you can even save on overall IT costs. Using a single system also reduces the amount of training required by the end user, who only needs to learn one system instead of interacting with multiple individual applications. While an ERP can cover numerous functional areas such as customer resource management (CRM), accounting, personnel management and supply chain management, the system design should be modular. This allows you to use only the parts that meet your needs. At its core, an ERP is the adhesive that connects other systems and their data with each other. Some ERPs allow you to integrate numerous third-party systems into a unified whole.
ERP provides complete access to all key processes in your organization by making data easily accessible to you and your management from any department. For example, you can monitor daily inventory, including future shipments to be received and current inventory. You can control your working capital at a more accurate level by knowing exactly where you stand in terms of stock levels. In addition, the availability of all company information at a central location enables improved collaboration and more efficient task processing. This complete visibility ensures more consistent workflows and makes it easy to track cross-departmental processes with maximum efficiency. All this allows you to make quick decisions in confidence as you can be sure that you will always see the full, complete picture.
Better planning and reporting
Better insights, together with improved transparency, are a great advantage of ERP system. Deploying an ERP suite across departments means your organization has a single, unified reporting system for each process. An ERP system can generate useful reports and analyses at any time by having a single source of truth. With this software, you can analyze and compare functions across departments without having to worry about multiple spreadsheets and e-mails. Finance is one of the most popular reports. Standard financial reports such as profit and loss statements and cash flow statements are typically integrated, and custom reports can be created quickly without IT intervention. In addition, many ERP providers also offer business intelligence services with their software. This BI feature enables organizations to gain deeper analytical insight into their operations. These insights help plan the business by identifying both operational strengths and problem areas that need to be improved. Such detailed insight into a company’s data enables ERP users to make better informed decisions based on trends and metrics.
The efficient cooperation of departments is a necessity for every company. An ERP platform streamlines the collaborative process with others by giving employees access to the data they need when they need it. They do this by providing an interdepartmental database in which information from each department is routed to a central location. This enables the project to be updated in real time and improved communication throughout the company. If required, each employee has access to the wealth of data of the entire company with an installed ERP system, so that he can keep track. This in turn gives your employees the tools they need to make proactive decisions while increasing their appreciation. The net effect for your business is greater efficiency and lower operating costs associated with manual data collection, as well as increased employee engagement.
Today, the modular structure is one of the greatest advantages of Enterprise Resource Planning software. Most ERP vendors offer multiple applications that can be implemented based on business requirements. Each application is designed to be integrated individually or into the larger suite, with a few exceptions. So your company can choose which components work best and leave out what you don’t need. A further aspect of the adaptation is the implementation of the software. On site and through the cloud are the two most common variants.
Problems with data distribution across different databases can often be completely eliminated. ERP systems can be integrated with platforms such as your CRM software or other third-party systems to keep data consistent, accurate and unique. This allows you to centrally store and manage data, even if the sources are different.
Lean processes and efficiency
An ERP system can reduce the time and effort your employees spend performing their daily activities while reducing IT and training costs. Properly implemented, an ERP system can significantly reduce or eliminate repetitive manual processes so team members can focus on tasks that impact revenue. The system can also help to implement and enforce best practice processes in the industry and align all actions across the enterprise.
REPORTING ERP software helps to simplify and adapt reporting. Advanced reporting capabilities make it easier for your organization to respond to complex data requirements. Users can also run their own reports without IT support to save their users time on other projects.
Improving customer service
Because customer information is centralized and optimized, your sales team can focus on building and maintaining customer relationships rather than spreadsheets. At the end of the day, customer acquisition and retention should be the most important thing a company should take care of. You can ensure better customer interaction, from targeted marketing to late customer service to the end-to-end tracking and insight provided by ERP. State-of-the-art ERP suites also support integration with eCommerce. This means your company can better manage web-based order fulfillment and customer interactions.
Data security is one of the biggest advantages of an ERP system. The exchange of data across functional departments such as customer service, sales, marketing and business development improves collaboration within a company. The other side of widespread access to data is control over who can view and edit the data. ERP solutions have inherent controls to ensure the security of your data. What also helps ERPs to ensure a high level of data security is the provision of a single input system. Merging information from multiple systems often leads to conflicts between sources, but a single information repository helps improve the accuracy, consistency, and security of your organization’s data. Both on-site and cloud-based ERP systems provide a higher level of security for your business.
The ERP database system also enables a central backup of your critical and sensitive data.
Supply Chain Management
An ERP system supports supply chain management in a variety of ways for companies involved in inventory and production movement. This improvement leads to shorter lead times, more on-time delivery and many other benefits that improve your business as a whole. With a well-designed ERP platform, improved demand forecasting, inventory management, procurement and more, your supply chain can become better and more responsive. In addition, an optimized supply chain enables manufacturing innovations that can help you reduce costs and develop exciting new products. In addition, an ERP system can dramatically improve profitability and reduce inventory and production surpluses. A single view of sales, production, and delivery schedules allows you to optimize inventory levels instead of relying on imprecise estimates of future volumes.
How you can benefit from ERP& CRM integration
Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) are two of the most important tools available to businesses today. ERP systems can be described as “backend” because they are responsible for all the data a company uses. CRM systems could also be seen as the “front-end”, as they are directly involved in enriching user-friendliness. Most companies use both ERP and CRM systems, but implement them separately. But what if you integrate ERP and CRM? Both systems have clear advantages, but can it be even more advantageous to combine them? Below we have listed the most important advantages of ERP & CRM integration.
360-degree view of your data
The data generated is dependent on both ERP and CRM systems. The main advantage of ERP systems is the central data storage, which largely avoids redundancies. CRM performs a similar task for the frontend data received from the customer. However, the format of the data received from the customer and the data generated by business processes is very different. If the two records overlap and both are needed to make decisions, this becomes problematic. The integration of ERP and CRM solves this problem in a single step. For both areas, the central data is maintained and shared company-wide. This gives an overview of all types of data generated within a company at 360 degrees. This visibility in turn enables you to make more informed and effective decisions.
Optimization of business processes
The detached business processes in every company pose a problem. ERP and CRM systems were implemented for this purpose. If, however, they were integrated into a system, the task carried out separately by these systems could be solved more efficiently. Through integration with ERP and CRM, you can achieve an automated workflow and optimized business processes. This leads to a considerably higher productivity and efficiency increase.
Better access to dataIn some situations, all data in the business can be critical and access to this information must therefore be easily accessible. However, using separate systems to manage different types of data could be an obstacle. For example, the necessary data from the company's performance in the previous year may be needed to attract new customers, while the data generated by customer trends may be required for the company's new business. The integration of CRM and ERP systems paves the way for uniform data management that is available to all company employees. Not only does it eliminate delays in accessing information, it also gives you a better view of the data and helps you get meaningful results.
Saves money and time
Saving money (without compromising efficiency) is critical in any business. The integration of ERP and CRM systems can help you to a great extent. For example, the implementation of ERP and CRM systems requires training in the same way for employees. These systems are implemented separately, resulting in separate training. However, if you choose to integrate ERP and CRM systems, training times would be significantly reduced, saving you a lot of training costs. A team of IT experts is required to support each system. The separate implementation of ERP and CRM systems often requires large IT support and the creation of an interface between the two systems. However, there is only one system with ERP and CRM integration, which reduces IT support costs.
We have already discussed that the integration of ERP and CRM systems will create a uniform data repository. It would save money and manpower, but it would also save a lot of time. The proposal is usually generated by CRM on the frontend. This proposal is then converted by ERP into a real order in the backend. However, unnecessary switching between systems with separate systems is required. However, by integrating ERP and CRM, you can generate quotes and create orders in a single, continuous step. This ease is visible not only when creating orders, but also when managing inventory and quotations. All in all it saves a lot of time for your company.
As already mentioned, the integration of ERP and CRM enables complete process optimization. It not only accelerates processes, but also enables the coordination of different departments. Each department can be shared on the same page as the data. All relevant data can be viewed by decision makers in an optimized format. All this increases the performance of the employees considerably.
Lower overheads for training & IT
Effective CRM & ERP integration can reduce the amount of IT support and training so that training would be required only for the combined system and not for individual systems. Employees can be skeptical when it comes to using more than one piece of software, especially when comprehensive training is required. This can become a challenge, which can lead to poorer acceptance among the workforce.
The integration of ERP and CRM helps to automate your business. Better synchronization between the different departments. Information flows smoothly throughout the enterprise and information is not confused by miscommunication or delay. Everyone does their part of the work and updates the system without restricting the others. There is no data exchange, but ubiquitous access by authorized employees. Decision-makers get a first-hand overview of all processes and data points. As a result, profit margins can increase significantly with increasing productivity and improved sales.
ERP and CRM systems have become two of the most useful tools in many companies. Ultimately, the individual needs of each company must be analysed in detail before a decision is made.
The integration of CRM and ERP systems helps to eliminate many errors such as data redundancy, delays and inconsistent formats. At the same time, an integrated system is much easier to manage than two separate systems. Overall, integration with ERP and CRP can be a tremendous benefit to your business. In most cases, however, companies must have reached a certain size and complexity in their business processes before integration is worthwhile. If, however, you can already anticipate that you will experience rapid growth in the company, it might be worthwhile to opt for an integrated platform solution right from the start.