1. CRM AND ERP
School of Management Studies
ABSTRACT: Customer relationship management (CRM) is a system for managing a
company’s interactions with current and future customers. It often involves using technology
to organize, automate and synchronize sales, marketing, customer service, and technical
support. ERP in Customer Relationship Management: For accomplishing desired success,
organizations continuously strive for increased sales performance, superior customer
service and enhanced customer relationship management .To achieve these objectives you
need solutions that provide rapid access to centralized customer information. You should
also be able to access detailed and up-to-date communication history to foster customer
and prospectrelationships,close sales and streamline all customer contactactivities.
Customer relationship management (CRM) entails all aspects of interaction that a company has
with its customers, whether it is sales or service-related. While the phrase customer relationship
management is most commonly used to describe a business-customer relationship (B2C), CRM
systems are also used to manage business to business to business (B2B) relationships.
Information tracked in a CRM system includes contacts, clients, contract wins and sales leads and
1.1 How CRM is Used Today
CRM solutions provides the business data to help you provide services or products that your
customers want, provide better customer service, cross-sell and up-sell more effectively, close
deals, retain current customers and to better understand who your customers are. Organizations
frequently look for ways to personalize online experiences (a process also referred to as mass
2. customization) through tools such as help-desk software, email organizers and different types
of enterprise applications.
1.2 CRM Usability
CRM software has typically been considered difficult to use. As an enterprise application, stability,
scalability and security has been the primary focal points of CRM solutions. Usability, according to
this Enterprise Apps Today article, was not a key part of CRM which often resulted in failed
software projects, largely attributed to undue complexity. With increased adoption of CRM
applications, however, today's CRM software vendors make usability a central part of their
products. To improve usability many vendors today focus on usability issues to make CRM
workflow as simple and intuitive as possible, to offer navigation that can be performed in three
clicks or less and to ensure CRM software is designed to suitthe needs ofsales teams.
1.3 The CRM Strategy
Customer relationship management is often thought of as a business strategy that enables
businesses to improve in a number of areas.The CRM strategy allows you to to following:
Understand the customer
Retain customers through better customer experience
Attract new customers
Win new clients and contracts
Decrease customer managementcosts
1.4 The Impact of Technology on CRM
Technology and the Internet have changed the way companies approach customer relationship
strategies. Advances in technology have changed consumer buying behaviour, and today there are
many ways for companies to communicate with customers and to collect data about them. With
each new advance in technology — especially the proliferation of self-service channels like
the web and smartphones — customer relationships are being managed electronically.
Many aspects of customer relationship management rely heavily on technology; however, the
strategies and processes of a good CRM system will collect, manage and link information about the
customer with the goal of letting you marketand sell services effectively.
1.5 The Benefits of CRM
The biggest benefit most businesses realize when moving to a CRM system comes directly from
having all your business data stored and accessed from a single location. Before CRM systems,
3. customer data was spread out over office productivity suite documents, email systems, mobile
phone data and even paper note cards and Rolodex entries. Storing all the data from all
departments (e.g., sales, marketing, customer service and HR) in a central location gives
management and employees immediate access to the most recent data when they need it.
Departments can collaborate with ease, and CRM systems help organization to develop efficient
automated processes to improve business processes.
Other benefits include a 360-degree view of all customer information, knowledge of what customers
and the general market want, and integration with your existing applications to consolidate all CRM
2.0 ERP and CRM : What’s The Difference?
Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) are two
sides of the same profitability coin. ERP and CRM are similar in many ways, as they are both used
to increase the overall profitability of a business.
These systems overlap in some areas, and can be completely integrated in others. However, as
their core functionalities are completely different, it’s best for a business to first look at them as
separate, stand-alone systems. When viewed separately, it’s easier to see how ERP and CRM
each play a role in improving efficiency and increasing sales.
What is CRM?
Simply put, CRM is a system for recording and storing all information related to customer
interactions. CRM systems like Salesforce and Microsoft Dynamics CRM provide a standardized
method for collecting and sharing customer data and cataloging customer interactions. Since all of
the data is standardized, it’s easily shared throughout the business. CRM can be 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. The goal of CRM 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.
What is ERP?
Where CRM is focused on the customer, ERP focuses on the business. ERP is a system for
improving the efficiency of business processes. Like CRM, ERP allows for the rapid sharing of
standardized information throughout all departments. Executives, managers, and employees all
enter information into the ERP system, creating a real-time, enterprise-wide snapshot. Problems in
any area will automatically create alerts in other affected areas. This allows departments to begin
planning for issues before they become a problem in that department. In short, by allowing the
business to focus on the data, instead of the operations, ERP provides a method for streamlining
business processes across the board. Popular ERP vendors like Epicor, SAP, and Microsoft either
also make CRM software,or their ERP solutions directlyintegrate with CRM from other vendors.
4. A Distinction with a Difference
Though similar in effect, ERP and CRM systems use different approaches to increase profits. ERP
focuses on reducing overhead and cutting costs. By making business processes more efficient,
ERP reduces the amount of capital spent on those processes. CRM works to increase profits by
producing greater sales volume. With a standardized repository of customer data, it’s easier for
everyone, from executives to sales reps, to improve customer relations. In turn, those improved
relations translate into increased brand loyalty and profits.
2.1 CRM? ERP? Both?
Whether a business needs both systems largely depends on the size and complexity of the
business. Even for a small business, a CRM system is better than a haphazard collection of
customer data stored on hand-written notes, in numerous emails, or, worse yet, contained solely in
the head of a sales rep. Customer relations are the lifeblood of any business —CRM exists to keep
that blood pumping freely.
ERP is an invaluable tool for streamlining complex business processes. 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. If, at any time, a
manager or executive doesn’t know what’s going on in the departments they are responsible for,
the time for ERP has long since arrived.
Deciding which system is more important is like deciding between having an engine or having a
steering wheel in a car. CRM is the engine that drives a business. It improves sales and increases
profits. ERP is the steering wheel—it allows a business to be guided with precision, and to steer
around obstacles well in advance. ERP and CRM working together make it much easier for a
business to increase profits while reducing costs.
Which Comes First?
A business has to have processes before it needs to worry about streamlining them. And it needs
to have profits before worrying about cutting costs. The most streamlined, efficient business in the
world is still bankrupt without sales. That’s why CRM is often the best bet for a business’s first
investment. Generating and maintaining sales is usually what makes everything else possible. By
helping to maximize sales figures, CRM can enable a business grow to the point that ERP
becomes a necessity.
5. Increased capital comes about in two ways: more sales or fewer expenses. Using ERP and CRM
systems allows a business to pursue both of these avenues. The CRM system brings in more
revenue through better sales figures, while the ERP system reduces overall operating expenses.
Together, these systems can help a business pursue growth through efficiency and expansion
simultaneously. Used separately, ERP and CRM can still be very helpful, but could potentially limit
the business to a narrower avenue of growth.
3.0 Four Ways Integrated CRM-ERP Solutions Improve Productivity
The Need to Integrate CRM and ERP Solutions
One important area where organizations can use technology to improve productivity is by removing
data silos and integrating Customer Relationship Management (CRM) with their Enterprise
Resource Planning (ERP) solution. Many small-to-midsized organizations use CRM and ERP
solutions to automate and improve the management of their operations. CRM is a front-office
system that centralizes all information about external marketing, manages the sales pipeline,
automates customer service, tracks information about customers, as well as creates dashboards
and reports on this data. ERP systems automate and manage back-office business activities, such
as accounting, purchasing, collections, human resources, payroll, manufacturing, distribution, and
more. Traditionally, it has been difficult to integrate CRM and ERP systems because of the vastly
different architectures and the lack of standards for exchanging data between the systems. Older,
point-to-point integration methods can be costly, complex, and risky. Even when a company does
integrate these systems, future CRM or ERP upgrades can easily render the integration inoperable.
As a result,many companies operate CRMand ERP as standalone systems.
• Inability to track customer interactions—because information is stored in two systems, no
one single point of reference or single version of the truth exists for information about
customers’ interactions with the organization. This increases the likelihood of errors that
can be time consuming to correct; for example, when entering a customer order, the sales
representative using a standalone CRM system won’t have access to customer credit
information and will be unaware of any credit holds. The sales representative may,
therefore, spend time taking the order only to have to cancel it once the accounting
department discovers the credit hold. The end result is lower productivity for both the
sales and accounting departments.
• No single point of customer information—employees who want access to complete
information about the customer’s interactions with the company must turn to two entirely
different systems—the CRM system and the ERP system—to answer customer questions
about, for example, order status or to access a customer’s credit history. Employees must
spend time learning two systems and then take extra time to toggle between them. The
organization must also purchase licenses for two solutions for these users, rather than a
single license for a system that enables users to access data from the other system.
Purchasing additional licenses increases total cost of ownership. If end users don’t use
both systems themselves, they must telephone or email someone from a different
department and ask them to look up the necessary information, which lowers productivity
in that department.
6. • No centralized data warehouse—when different departments use different IT systems that
don’t share a single, centralized data warehouse to store information, information must be
manually re-entered into each system, resulting in wasted time and potential rekeying
errors. Alternatively, organizations must set up a separate “data mart” to take data from
the different systems in use and “normalize” that data so that it appears in a common
• No control over forecasting and sales reporting—because no one version of the truth
exists, it’s difficult to pull together information from across the organization to use in
forecasting and to create sales reports. Employees spend non productive time manually
looking for information in differentsystems and reconciling the data.
• Inability to target customers effectively—target marketing is generally recognized as a way
to reach the right customers with the right offers, often for purposes of up-selling and
cross-selling, in a highly efficient manner. In order to perform target marketing,
organizations need information about their customers, the products they’ve purchased in
the past, the amounts they’ve spent, and so on. When information is spread across
different applications, organizations are either unable to perform target marketing at all or
mustuse time-consuming manual processes to obtain the necessaryinformation
3.1 Integrating CRM and ERP “Out of the Box”
Solutions are now available that integrate CRM and ERP systems out of the box. These integrated
solutions eliminate the need to perform complex, time-consuming and costly point-to-point
integrations—and the challenges of upgrading systems integrated in this manner consistent data
about customers from throughout the organization using their accustomed application. This
integrated information enables users to view combined financial and nonfinancial information about
customers from within the CRM application, regardless of where the data is generated or stored.
Using integrated CRM-ERP solutions, organizations gain access to comprehensive and consistent
data aboutcustomers from throughoutthe organization using their accustomed application
These combined solutions also bring together previously disconnected business processes by
automating complex, multistage processes in an end-to-end manner. In other words, these
integrated systems provide “straight through” processing. They employ workflow management and
can automatically trigger the appropriate downstream business process, passing data seamlessly
from one application to the next without manual intervention. For example, integrated solutions can
tie together the quote-to-order and order-to-cash processes into a comprehensive quote-to-cash
process that eliminates the need to rekey information. The next sections describe exactly how
these integrated systems and processes improve productivity throughoutthe organization.
3.2 How CRM-ERP Integration Improves Productivity
Integrating ERP and CRM solutions out of the box improves productivity by reducing duplication of
data entry tasks, empowering employees with the right information at the right time, streamlining
business processes through automated workflow,and improving organizational task management.
7. Reduce Duplication of Data Entry Tasks
Without an integrated system that shares data across the enterprise, significant rekeying of
information is necessary into both the CRM and ERP systems for a number of business processes.
For example, sales will take an order, enter it into the CRM, and also email the order to someone,
who will then rekey it into a back-office system, where the order is processed and shipped. An
integrated CRM-ERP system drastically reduces the duplication of data entry tasks. For instance,
with an integrated CRM-ERP system, quotes and orders can all be created in a single system
along with financials for one integrated quote-to-cash function. Information is captured once at the
source and then automatically propagated to all relevant fields throughout the CRM and ERP
environments without the need for rekeying and revalidation as it pass es from one system to the
Not only does reducing duplication improve productivity, it also eliminates errors, conflicting data,
and administrative costs. In addition, entering data once means that the most accurate and up -to-
date customer information is available to front-office and back-office employees at the same time—
this improves productivity by reducing the need to redo work due to erroneous information. As an
illustration, if a salesperson entered price information into an order in error because he did not have
access to the latest pricing information from the ERP, he would have to redo the order—an
integrated system eliminates this type of error
Empower Employees With the Right Information at the right time
In the past, without a single point of customer information, employees were unable to answer all
questions about a customer from one system. Take the case of a customer asking a sales rep
about the status of an order; that sales rep would have to go to a different system or email
someone to get the answer .An integrated solution delivers a complete view of customers to all
employees, allowing them to answer questions promptly and accurately. Account managers using a
CRM have complete access to a customer’s purchase history, the status of an order, and much
Sales reps can book orders correctly the first time, every time because they have access to the
account, customer-specific pricing, and stock information they need to do their jobs effectively.
Marketers have complete customer information to create highly targeted marketing campaigns and
driving cross-selling or up-selling opportunities. Managers and executives also have the ability to
easily report on information about prospects for use in forecasting or to perform sales and other
business reporting. In addition, because users can access back-office information from the front-
office application, they don’t need to learn a second application so less time is spent training
Streamline Business Processes Through Automated Workflow
Workflow management capabilities of today’s ERP and CRM applications allow organizations to
automate business steps and processes that were previously manual, significantly improving
8. employee productivity. Powerful workflow tools in the CRM enable organizations to automate and
embed best practices for sales, service, and marketing, while workflow tools in the ERP do the
same for back-office functions. Organizations can design and modify their business processes,
define business rules, and automate their execution. Exception monitoring with triggers and alarms
allows employees to focus on the mosturgentevents, rather than performing all tasks manually.
The automation in CRM and ERP systems individually, however, does not fully address end-to-end
business processes, such as the quote-to-cash business cycle. If a member of the sales team, for
example, generates a quote based on out-of-date pricing information or stock availability and
subsequently converts this quote into a customer order, this error will likely only be identified later
at the order approval or shipping stage. The order will need to be passed back to the salesperson
for correction and then reprocessed by the finance department. These unnecessary steps delay
order completion for the customer, increase administrative cost for the company, and duplicate
workload unnecessarilyfor sales and finance staff.
By developing automated workflows that span both CRM and ERP applications, organizations can
expand on the individual capabilities of their ERP and CRM systems to enable straight-through
processing. A user can then initiate a transaction, automatically triggering all related business
processes as appropriate and passing the transaction seamlessly from one application to the next
without the need for extensive manual intervention. Allowing your staff to use proven, repeatable
processes improves productivity by eliminating time-intensive manual activities. Straight-through
processing further improves productivity by reducing or removing the need to rekey information
from one system to the next, as orders generated within the CRM system are passed automatically
through to the ERP system for processing and fulfillment
Improve Organizational Task Management
An organization’s calendar capabilities are typically provided by the CRM system. By integrating
those functions across the organization and with the ERP system, the entire organization can share
calendar information to quickly and easily schedule group meetings or to give the company an
overview of individuals’ tasks. This integrated task management functionality allows organizations
and individuals to automate follow-up tasks, review where they are in completing tasks, and
prioritize tasks in order to improve accountability and perform tasks more productively. If one group
delegates a task to another, this group calendar makes it easy to make sure that person completes
the task as promised.
Take the collections management process as an example. Using calendar and task management
capabilities, an employee in the collections department places a note on a customer record or has
a communication with a customer about a past-due invoice. That person then creates a task for the
appropriate account manager to make a call and start the collections process. As part of this task, a
workflow could then kick off an additional task once the account manager has followed up that
sends the accounting team a message with an update.
9. 4.0 CONCLUSION
As organizations look to improve the efficiency of their operations, they are turning to technology
for a solution. One critical technology solution is to integrate CRM and ERP solutions to facilitate
the sharing of accurate and timely customer data throughout the organization and to automate end-
to-end business processes. When this integration occurs “out of the box,” organizations eliminate
the need for complex, costly integrations and simplify future upgrades. Using CRM-ERP solutions
that are integrated “out of the box” dramatically improves productivity by reducing duplication of
data entry tasks, empowering employees with the right information at the right time, streamlining
business processes through automated workflow, and improving organizational task management
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