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Do you need both ERP and CRM?

By Henning Lund - June 21, 2016

Do you absolutely need to have both ERP (Enterprise Resource Planning) and CRM (Customer Relationship Management)? Isn’t it enough to use just one of them?

Well, the two systems are similar in many ways. They serve the same final purpose: they are there to help companies achieve greater control and increase profitability. They are also there to give companies the power to control their success in today’s market. In my mind, one of the big differences, though, is that an ERP system follows a well predefined process while a CRM system is much more a roadmap of routes that can be triggered by different events such as a specific prospect feedback.

Also, although ERP and CRM serve the same purpose, they do it in completely different manners, because their core functionalities are completely different. In order to understand how you can best benefit from each system I believe that you should start by taking a look at them as separate, stand-alone systems. Why? Because then it will be easier for your to see how ERP and CRM each play a role in improving efficiency and increasing sales. Let’s go back to basics…

What is CRM?

CRM solutions focus on the customer-relationship processes and data. That is pretty much the only thing they focus on. And frankly they do it pretty well, managing information and capturing all relevant details for your company. Your CRM system registers all interactions you have with your customers and you can then utilize this information all across the board, from your Salesforce to accounting to management. CRM helps you properly manage customer information, and build better customer relationships in order to identify trends, increase customer loyalty and, ultimately, revenue.

What is ERP?

Where CRM is centered on customer activities, ERP focuses on the entire business. ERP is basically made for improving the efficiency of processes across your business – from accounting to warehouse to inventory to fulfillment. Using this technology, you always know when problems occur, you are ready to take corrective actions and you always have a clear and accurate picture of your business.

Similar and different, but mostly complementary – for the benefit of your business

Both CRM and ERP allow companies to quickly share standardized throughout and organization. Executives, managers, and employees all enter information into the systems, creating a real-time, enterprise-wide snapshot. Problems in any area will automatically create alerts in other affected areas, allowing employees. This allows relevant departments to begin planning for issues before they become a problem in that department.

However, ERP and CRM have different means to the same goal. For the most, ERP focuses on reducing overhead and cutting costs. CRM on the other hand works on producing greater sales volume and thereby increasing revenue and profit.

To put in shortly, CRM will fuel your business with new business, and ERP will allow you to manage and drive your business around obstacles, allowing you to deliver according to the promise made to your customer, and do it in a profitable manner. Therefore, having both CRM and ERP is in my mind the most efficient way to run a business.

Get the most out of CRM and ERP – integrate them

Many companies have understood the benefits of implementing both CRM and ERP. However, left as stand-alone systems, CRM and ERP solutions often become data silos in organizations, and these organizations miss a full 360 degree customer view. Lack of integration between the two systems creates information gaps that can damage a company’s operations. For example, without integrated systems your sales people might not be aware of a customer’s credit limit and therefore grant credit to a customer that should not have it.
There are indeed many benefits of integrating ERP and CRM, including efficiency gains and return on your investment in both platforms. In my opinion, the integration is your guarantee that all departments in your company are able to work together effectively. 

Extending the ERP and CRM capabilities with integrations

In order to create a 360 degree view on clients companies can integrate their CRM system with additional data sources. They can gather data from Iot and social media to track behavior, and from ERP to track sales history and other financial data. The ERP system most typically benefits from being integrated with e-commerce systems, Product Information Systems and other operational systems. So, often besides integrating ERP and CRM together, there are also a number of other integration points, and the trend is that the number of possible integration points with CRM is increasing with all the data sources already available as a service in today’s market.

How do you then integrate? Nowadays, you can easily find very cost-effective cloud-based solutions that allow fast, automated and secure ERP and CRM integration. Integration solutions run as a service, and implementation time is in the large majority of the cases limited to 3-10 man days; making it both possible and affordable to move forward with an integration and reap the full benefits of your ERP and CRM investments.


About the author

Henning Lund

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With over 25 years’ experience in strategically propelling businesses forward, Henning is considered a business development entrepreneur with a passion for transforming businesses, sales and marketing operations through out-of-the-box thinking, concepts building and process automation to improve overall performance and scalability.

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