The Synergy Between ERP and CRM : Key to Maximizing ROI

December 11, 2017

Software services make up quite a confusing world of abbreviations. ERP and CRM are two of the frequent encountered cases in such confusion. Owing to the significant overlaps between the two solutions, they are often used interchangeably. However, there is a sea of difference in the intent with which the two were devised and are operated. Let us delve deeper into this.

What is ERP?

To put it literally, it stands for Enterprise Resource Planning. This software manages the entire business operations ranging from HR and payroll management, accounts and finance, purchase, manufacturing to supply chain management. From senior executives to employees all of them feed in their information into ERP system, creating a real time enterprise snapshot. The  ERP software market is expected to be worth £27 billion by 2020 (PRnewswire)

What is CRM then?

CRM stands for Customer Relationship Management. In a nutshell, CRM captures all interactions of a customer with an organization whether it’s related to sales or service. The software enables management of customers or clients by offering real time tracking of customer transactions, managing sales pipeline, identifying new sales leads, tracking customer information including purchase behavior, creating dashboard and reports on data, automating marketing process and more. The CRM market is predicted to be worth $36 billion  by 2017( Gartner).

What do we conclude from the two?

CRM is essentially a front office management system whereas ERP aids in running the back office. CRM works towards streamlining sales and service processes, ERP aims to standardize critical business processes like accounting, supply chain, HR. Together, the two hold two distinct silos of information for business for smooth operation and signature customer experience .

ERP facts and highlights:

  • 81% of organizations are either in the process of implementing ERP software or have completed implementation
  • 81%
  • 23 % Increase order-to-shipment times
  • 23%
  • 60% improvement in inventory control
  • 60%

CRM facts and highlights:

  • 89% of consumers have stopped doing business with a company after experiencing poor customer service (RightNow Customer Experience Impact Report)
  • 89%
  • A staggering 78% of those who didn’t use CRM solution  did not achieve their sales targets(Superoffice).
  • 78%
  • Per sales person, a CRM can increase revenue by a whopping 41%(Trackvia)
  • 41%
  • 55% of consumers would pay more for a better customer experience (Defaqto Research)
  • 55%

There are ERPs these days which include CRM components. So why not invest in them?

Truth with a bit of salt – It ends up doing everything and nothing. ERPs are comprehensive but every business or function has its dynamics and most of the times companies walk away from using this tool because some important business process cannot be managed. By and large, those ERPs are found to be staggering behind the best of class CRM in particularly, call centre support or social media management. Moreover, Customer Experience will overtake price and product as the key brand differentiator by the year 2020 (Walker). The answer to all customer experience software need is a unique CRM -which offers unified 360 degree view of customer.

CRM ERP – the collaboration

  • Is it possible to know your customers completely and be abreast of business operations, simultaneously?
  • Is it possible for the  sales team to have complete access to customer, order, inventory,and product -pricing information at a crucial touch point with customer to offer the best deal?
  • Is it possible to update each segment of business: proposal generation- receiving actual order -inventory details-finance situation, all at real time?

Just imagine!

A sales executive talking to the customer and at the same time checks the inventory available and confirms an order. This is only possible with a seamless integration of the ERP and CRM systems. Typically in large organizations different departments work on different systems creating silos of data. While both ERP and CRM can work very well on its own, the true potential is fully realized only when they are integrated. An ideal situation would be where a customer service representative can at real time look at the refund status due to the customer in his system. This enables 360 degree view of the customer in the true sense.

Let’s face a real world situation:

CRM, X has worked with a very popular ERP solution, Y  to help streamline the flow of data across functions for an eCommerce business. With a popular e-tailer dealing in perishable food products where the entire order management is on CRM X. X has been successful in ensuring a seamless flow of the order related data to other functions like the production or supply chain which rides on ERP Y. This means that an order received on any channel would result in timely production and dispatch. As time is the essence in  perishable product business, the obvious result is superior customer experience.

To put it in short,

With the ever increasing size of customer data being generated on daily basis, ERP and CRM solutions are call of the age. Seamless data sharing and providing visibility into both frontend and backend systems increases productivity and simplifies business process. For Business leaders this would mean a quick ROI on their technology investments and an all round visibility of the entire customer journey.

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