Enterprise resource planning (ERP) and customer relationship management (CRM) are organizational strategies used to increase the overall efficiency and profitability of a business. Although the systems can overlap and be integrated, their main functions differ.
Enterprise Resource Planning
Enterprise resource planning is a system for improving efficiency in business processes. Employees, managers and executives input information into the ERP system, allowing the rapid and widespread sharing of timely and standardized knowledge. This creates an accurate, real-time, enterprise-wide picture of company performance. With equal access to necessary data, departments can begin planning for issues before they become a problem.
The focus on data integrates all aspects of an operation, including research and development, sales, marketing, product planning, manufacturing, supply chain management and pricing. Incorporating ERP software can reduce the duplication of tasks, boost financial data accuracy, improve project planning and decrease purchasing costs. ERP software solutions also can increase interdepartmental communication by facilitating the dissemination of information and data.
Customer Relationship Management
Like ERP, customer relationship management is a system for recording and storing information. However, while ERP is business-focused, CRM is a methodology to guide a business’ communications with its customers. The goal of CRM is to create a source of customer-centric data by capturing all such interactions in order to increase sales, enhance customer service, acquire new clients, increase brand loyalty and improve customer retention.
CRM software can be used to automate customer service functions, track customer interactions, create data reports, organize marketing plans, manage the sales pipeline, prioritize and manage leads, share customer profiles and streamline sales processes. Much like enterprise resource planning, CRM is designed to create a comprehensive and transparent picture of individual departments and a business as a whole.
Integrating ERP and CRM
Although ERP and CRM have distinct functions, they can be used in conjunction to increase a company’s efficiency and boost its revenue. Integrating ERP and CRM may be appropriate depending on a company’s size and complexity. A business’ particular needs also will be a determining factor in choosing which system is the first to be implemented. For example, a firm may decide to implement a CRM system initially in order to standardize processes. An enterprise resource planning system may then be introduced with the goal of optimizing those processes.
The data provided by each of these distinct methodologies can lead to improved decision-making and communication at all levels of a business, potentially leading to lower costs and higher revenues.
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