CRM (Customer Relationship Management) is a software solution (often also available as a service – Software as a Service), which facilitates a company in its interaction with its customers, existing and potential. Essentially what makes one CRM system is to manage personal information, sales and flow of customer-related processes, starting well before the sale and continuing after that. After all, it is not a goal for every business only finding new customers, but also maintaining existing ones, with the capitalizing on new sales opportunities as they present themselves.
The term CRM - as described above - may refer to the product, but in essence, it is an "umbrella" that encompasses the strategy, the practices and technology, with the ultimate goal of improving customer centricity business philosophy, focusing on the human factor, whether it is for customer, for service user, for partner or supplier.
The ultimate goal is none other than building a strong customer base relations with the aim of increasing the profitability of the business.
A common misconception is that CRM is only about the department sales of a company. However, the benefits are greater and concerning the entire enterprise. CRM is not just a tool for sales and marketing. On the contrary, it must be fully integrated into everyday life workflow of the business, from the HR department and customer support, to supply chain management.
The Enterprise Resource Planning (ERP) System evolved from Material Requirements planning Planning or Material Resource Planning (MRP) which was a way for the businesses to understand and manage all the resources that are required to run a successful business.
The existence of a single, common database for all financial and operational data is a key advantage of an ERP system. THE collection of this data greatly affects reporting, both the static monthly reports and the ad hoc ones. Also the employees delve into financial issues easily and quickly.
Another important advantage of the ERP system is that it is faster financial closing of the books. The finance department is required to issues income and expenses at the end of each month or each quarter. In addition, the closing the books traditionally, requires extensive manual work, data entry and communication with different departments for financial information. However, with a centralized ERP system, many of these tasks, and companies consume minimal time for it processing them.
While the entire organization will rely on both ERP systems and CRM systems, the fundamental difference between them, is that ERP is intended mainly for the financial department, while CRM is customer data that used by sales and customer service departments. Some some ERP systems include a CRM component, while others do not. On the contrary, CRM software systems, do not include ERP components.
ERP and CRM are both business applications that store and analyze data in a relational database. Both are delivered either through a traditional on-premises model or through software as a service, where the vendor manages the software on own data center and customers access it through it cloud.
Almost all growing, small and medium-sized businesses will need it both an ERP and a CRM system or a single platform for both.
Whether a company invests in CRM or ERP for the first time will depend on its business model. A company with a small clientele and complex financial data may be more able to invest first in an ERP system, while a company with relatively simple finances and a large one customer base that requires frequent contact needs a CRM system.