Businesses looking to automate core processes can weigh the advantages and disadvantages of two main software solutions: enterprise resource planning (ERP) and customer relationship management (CRM). ERP helps companies run successfully by connecting their financial and operational systems to a central database, while CRM helps manage how customers interact with their businesses.
What is a CRM System?
In the modern business world, CRM (Customer Relationship Management) represents the digital equivalent of the 20th-century Rolodex. CRM software is a front-office tool that is used by employees in the sales, customer service, and marketing departments to increase revenue by optimizing the customer experience. It is a powerful way to help manage all your company’s relationships and interactions with customers and prospects. CRM systems are designed to log every interaction with both prospective and current customers across all communication channels. Sales performance management and sales incentive compensation can also be included in this software. Used correctly, the data set generated can create and drive complex workflows for an entire sales team and give management the ability to track employee progress in real-time.
The goal of a CRM system is to increase your business’ sales by helping reps better engage with their prospects. A cloud-based CRM gives the sales force accessible mobility while out in the field. CRM systems also provide a way to integrate the sales, service, and marketing departments. Data-driven sales strategies can inform appropriate marketing campaigns. Customer response to marketing can, in turn, provide further actionable data for the sales workflow. Creating a full digital view of every customer can help with lead tracking, customer follow-up, tracking customer behavior, and providing client support. A data-driven business culture facilitated by a CRM and marketing automation system can provide both better customer service and increased revenue. (SalesChain corporate website)
What is an ERP System?
ERP (Enterprise Resource Planning) systems contain tools that integrate both front and back-office functions. The software contains modules for multiple different business processes, such as finance (including the general ledger, accounts payable, accounts receivable, payroll, and financial reporting), HR, inventory management, order management, supply chain management, and distribution (including procurement, production, and fulfillment). By integrating these processes, the goal is to streamline operations and centralize information. Often these systems are customizable or configurable.
ERP software facilitates internal communication and data exchange. It collates data from multiple departments and provides the tools to integrate and interpret it from the perspective of various aspects of the business workflow. “The benefits of an ERP system come from having a single, shared database for all financial and operational data. This impacts reporting — both static monthly reports and ad hoc reports requested by leadership. A sole source of financial and operational data also means employees can drill down into reports to uncover financial insights without the need for IT or finance teams to conduct the analysis and reporting. This allows businesses to make faster, data-backed decisions that can impact everything from profitability to new growth opportunities to creating efficiency across the organization.”
Case Study: Delivery Workflow Automation
In this video testimonial, Crystal Manning talks about how SalesChain’s delivery workflow management tools cut KDI’s DSO in half.
What is the Difference?
The fundamental difference between ERP and CRM systems is the focus of the tool. CRM is a front-office tool and ERP incorporates both front and back-office functions. ERP is primarily for financial data and the finance department, while CRM is customer data used by the sales and customer service departments. ERP focuses on the enterprise itself and is concerned with reducing operational costs. CRM focuses on the customer and is concerned with increasing sales.
While ERP systems may include a CRM component, CRM software systems do not include ERP components. For example, SalesChain is not an ERP system because it does not manage transactional data. It may access order history or invoices, but that data is imported through an integration with the ERP system.
Sophisticated or industry-specific CRM tools might allow for ERP data to be viewed within the CRM to give front-of-house employees a more complete picture of their client base. SalesChain, for example, boasts integrations to major ERP systems within our industry of office technology to let sales reps access the asset, contract, and lease information and use it to their benefit.
What are the Similarities?
ERP and CRM systems are both enterprise business software tools that store and analyze data in a relational database. Customers can purchase these tools as either a traditional on-premises model or through software as a service (SaaS), where the vendor manages the software in its own data center and customers access it through the cloud. Both tools store essential business data from multiple departments in one central repository and both focus on revenue generation, automation, and increased efficiency and productivity through the reduction of error inherent in human data entry and manipulation.
Does My Business Need Both?
In a word – YES! All companies, from small and midsize businesses to enterprises, should seriously consider implementing both an ERP and a CRM system — or a single platform for both. Companies running their financials on entry-level accounting tools like QuickBooks or even spreadsheets often turn to an ERP system when they find those systems are holding back their growth, are inefficient or they simply need something more robust. The same is true for businesses managing their customer relationships in individual sales reps’ email clients, spreadsheets, or contact management systems. Collating and centralizing sales data in a cloud-based and easily accessible format provides vital ease of use, efficiency, and accountability. Whether a company first invests in CRM or ERP will depend on its business model.
Adopt a Solution that Unifies CRM and ERP
Although SalesChain is much more than a CRM system, customer relationship management is the core of our sales functionality. SalesChain’s CRM system is capable of scaling to meet the needs of any organization. Large dealers with multiple locations can view hundreds of thousands of account records across multiple territories just as easily as a down-the-street rep can enter information on local prospects.
However, SalesChain offers much more than this powerful CRM solution. Our platform unifies both CRM and ERP functions within the same system, aided by powerful integrations to industry-leading tools, such as Microsoft Outlook 365, ECI e-Automate, HubSpot, and more. A unified solution precludes the need for employees to learn, manage and manually collect data from disparate software systems. SalesChain software combines CRM, business intelligence charting, document generation, and delivery management all into one, easy-to-use solution. It automatically centralizes data streams from sales, customer service, and marketing and makes them easily accessible in a highly visible format through customizable dashboards. Managers, sales representatives, customer service personnel, and the marketing team are all on the same page because all aspects of the sales process are accessible to the entire workforce.