The times are changing. Data now plays a pivotal role in today's business world. The huge amount of data available through various sources can however provide a competitive edge to today's businesses only if the wealth of information is tapped and used effectively. Although the data is available at your fingertips, it is still a challenge to get the right data at the right speed and in the right context. In order to manage this kind of humungous data, businesses adopt enterprise resource planning systems or customer relationship management software customized to their needs.
Many vendors in the market sell both CRM as well as ERP and portray the two systems as being able to complement each other in the client business scenario. However the two systems are designed with focus on different things.
CRM focuses more on the customer facing aspects of the business. It deals extensively with customer management or external customer interfacing functions. The CRM system is employed in order to build intelligence at the client interface in order to manage the customer relations, track the growth and to handle the customer interactions more intuitively.
ERP works at the backend and is more focused toward the internal process management. It has reporting capability and helps in lubricating the business functions of the client.
CRM is used to track sales and analyze the trends in sales, based on which it has the intelligence to predict future sales. For this, CRM has to retrieve the information from the other related departments such as finance, marketing, product development, and manufacturing. However CRM does not have the capability to maintain business workflows and manage the flow of the huge scales of information within the various business functions.
ERP systems on the other hand, enhances the business in terms of visibility and accessibility of information, aiding efficient planning of financial and management accounting functionality combined with business analytics and in effect a huge turnover in terms of profitability. ERP systems required to cater to myriad functions in the business, simulate and improvise these functions and make the integration of these functions with other business components seamless. This involves organizing of humongous amounts of data from various channels and components of the whole business and bring about an improvement in terms of visibility and accessibility of information, aiding the efficient planning of financial and management accounting functionality combined with business analytics and in effect a huge turnover in terms of profitability.
The focus of any business is typically on the customer. It is all about what is going to make the customer happy. Thus a major factor which drives the competitive strategy of a company is about how the strategy can bring about improvements in the service to the customer, responsiveness to the customer's needs and how well the customer's needs can be met. This is typically measured with the help of CRM.
In addition to this the next important criterion is how the strategy increases the overall profitability of the business. It boils down to how much revenue advantage the strategy will eventually provide. This is generally indicates how effective the ERP system of the business is.
Thus ERP and CRM systems can surely coexist in a business. However the systems can as well exist independent of each other in a different business setting.