CRM AND ERP

RESHMA FERNANDEZSchool of Management StudiesCUSAT, Kochi-22E-mail: reshma.fernandez@gmail.com

ABSTRACT: Customer relationship management (CRM) is a system for managing a companys 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 prospect relationships, close sales and streamline all customer contact activities.

1.0 INTRODUCTIONCustomer relationship management (CRM) entails all aspects of interaction that a company has with its customers, whether it is sales or service-related. While the phrasecustomer relationship managementis 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 more.1.1 How CRM is Used TodayCRM 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 asmass customization) through tools such ashelp-desksoftware, email organizers and different types ofenterprise applications.1.2 CRM UsabilityCRM software has typically been considered difficult to use. As anenterprise 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 suit the needs of sales teams.1.3 The CRM StrategyCustomer 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 Increase profitably Decrease customer management costs1.4 The Impact of Technology on CRMTechnology 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 theweband 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 market and sell services effectively.1.5 The Benefits of CRMThe 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, 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 and ERP:2.0 ERP and CRM : Whats 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, its best for a business to first look at them as separate, stand-alone systems. When viewed separately, its 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 likeSalesforceandMicrosoft Dynamics CRM provide a standardized method for collecting and sharing customer data and cataloging customer interactions. Since all of the data is standardized, its 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 likeEpicor, SAP, andMicrosofteither also make CRM software, or their ERP solutions directly integrate with CRM from other vendors.A Distinction with a DifferenceThough 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, its 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 businessCRM 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 doesnt know whats going on in the departments they are responsible for, the time for ERP has long since arrived.Assigning ImportanceDeciding 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 wheelit 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. Thats why CRM is often the best bet for a businesss 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.Maximizing GrowthIncreased 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 SolutionsOne 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 CRM and ERP as standalone systems. Inability to track customer interactionsbecause 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 wont 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 informationemployees who want access to complete information about the customers interactions with the company must turn to two entirely different systemsthe CRM system and the ERP systemto answer customer questions about, for example, order status or to access a customers 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 dont 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. No centralized data warehousewhen different departments use different IT systems that dont 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 format. No control over forecasting and sales reportingbecause no one version of the truth exists, its 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 different systems and reconciling the data. Inability to target customers effectivelytarget 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 theyve purchased in the past, the amounts theyve spent, and so on. When information is spread across different applications, organizations are either unable to perform target marketing at all or must use time-consuming manual processes to obtain the necessary information3.1 Integrating CRM and ERP Out of the BoxSolutions 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 integrationsand 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 about customers from throughout the organization using their accustomed applicationThese 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 throughout the organization.3.2 How CRM-ERP Integration Improves ProductivityIntegrating 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.

Reduce Duplication of Data Entry TasksWithout 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 passes from one system to the next. 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 timethis 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 orderan integrated system eliminates this type of errorEmpower Employees With the Right Information at the right timeIn 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 customers purchase history, the status of an order, and much more. 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 dont need to learn a second application so less time is spent training employees.Streamline Business Processes Through Automated WorkflowWorkflow management capabilities of todays ERP and CRM applications allow organizations to automate business steps and processes that were previously manual, significantly improving 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 most urgent events, 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 unnecessarily for 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 ManagementAn organizations 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.

4.0 CONCLUSIONAs 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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