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ERP and CRM: Two Sides of Same Profitability Coin

James Warner | Dec 6, 2017 91 views No Comments

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In today’s technology world, companies have gain the ability to access data in real time and streamline business processes to stay on top of their rivals. There are tools available in market which give companies the power to control their success in today’s volatile environment. These tools are nothing but ERP (Enterprise resource planning) and CRM (Customer relationship management). Both are very valuable business software available in the market but each system is used to manage different business objectives. These systems overlap in some areas, and can be completely integrated in others. However, as their core functionalities are completely different. When viewed separately, it’s easier to see how ERP and CRM each play pivotal role in improving efficiency and increasing sales.

Enterprise resource planning (ERP) is a software used to manage business operations to improve performance, profitability and productivity of the enterprise. It integrates with different set of operations like sales and marketing, Human resource, Manufacturing, procurement, Financials etc. to smoothen the business processes and flow of information across the organization.

The main purpose of ERP solutions is to improve operation efficiency of the business processes to efficiently achieve business goals.

Many small businesses start in a single room or small office. All of the “departments” may be within earshot of each other. At that point, software that can provide a real-time snapshot of every department may be overkill. As the business grows, the need for, and benefits of, ERP become clearer.



The main feature of ERP is the share database which is used by various department in the organizations. All the departments in the organization have access to updated information. This is also useful in minimizing redundancy of the data and for maintaining the accuracy.

This updated non redundant data is useful for management in analyzing the performance and profitability of the organizations/ departments at any given point of time.

As ERP is basically focus on cost cutting and reducing overheads. By streamlining the business processes more effectively, it will reduce the cost spent on company’s business operations.

Most commonly used features for ERP are:

  • Accounting
  • Supply chain
  • Procurement
  • Human resource
  • Inventory
  • Project management
  • Business intelligence
  • Reporting

ERP allows for the rapid sharing of standardized information throughout all departments. Employees enter information into the ERP system, creating a real-time, enterprise-wide snapshot. If problem occurs in one area will automatically create alerts in other areas. For example: if problem occurs in supply chain, ERP will capture the issue and make it available for other affected areas such as transportation. It will not only provide updated information to all the related departments but also allow them to begin planning for the issue before it become problem in that department.

Basically ERP takes care of operation and allow business to only focus on things that matters such as Data.

Customer relationship management (CRM) is a business strategy for managing all your company’s relationships and interactions with your customers and potential customers (Prospects). It captures every possible details of the customer interactions with the organizations. It helps you to better understand your customer, retain customers, provide excellent customer service, win new clients and increase profitably.

Main aim of implementing the CRM software is to build the trust among customer about the company and maintaining long term relationship with them to achieve maximum growth along with maintaining highest customer satisfactions.

CRM provides standardized method of collecting customers/ prospects information such as name, phone number, email, address etc. and capture all the interaction with the customers along with their needs and preferences in shared database which will then share with employees, from sales reps to managers to accounting personnel to build their customer relationships in order to increase customer loyalty and ultimately, revenue.

This information is used by executives to create sales projections, by sales reps to maintain contact with clients, by shipping clerks to verify addresses, and by the billing department to create invoices.  This information is also used to generate leads, management of marketing activities to attract new customers and to communicate with existing customers.

CRM is a front end activity focuses on increasing sales to increase profits by producing greater sales volume by providing best in class service to the customer.

There are various activities manage in CRM:

  • Streamline sales process
  • Manage and prioritize leads
  • Manage business contact
  • Customer support
  • Manage sales pipeline
  • Track customer interactions with business
  • Organizing marketing activities
  • Share customer information with other departments etc.

The goal of Microsoft CRM development is to provide a comprehensive store of customer data that can be used to increase sales, improve customer retention, and make customer relations more efficient.

ERP-CRM integrations

ERP and CRM systems use different approach to increase profitability but together they are more beneficial for the organization. It optimized the return on investment.  ERP and CRM solutions together combine financial, operations, customer relations and business intelligence in one management system. It improves decision making ability of employee. It ensures that customer expectation and company’s goal are met. This integration guarantees that all departments in your company are working together. The sales rep can communicate with the accounting, supply chain and warehouse departments before making the sale. If there are problems, the sales rep will be notified ahead of time. This gives sales reps the ability to close deals with all necessary information and maintain a good name for your company.

ERP and CRM work together to streamline all of the functions of this business, be it internal or external. When the front end (CRM) and back end (ERP) of the business are communicating with each other, it covers all the aspects of the business.

Without ERP and CRM integration, your company stands the risk of being lost in communication and profitability.

Conclusion

Customer Relationship Management helps the organization to maintain a long-term relationship with the customers. It is also useful to know about the preferences of the clients and develop trust.

ERP combines various units of the organization together so that they can freely share the information and communicate with each other on a real-time basis through a common platform to improve the operational efficiency.

Together they can achieve greater level of success for the organization as they are actually ‘Two sides of the same profitability coin’ and hence they can always be seen together and not separately.

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