Differences Between ERP and CRM — And Why Integration is Important for Manufacturers

Discrete manufacturers that want to gain a competitive advantage need to leverage technology to create efficiencies throughout each department, and to manage customer relationships outside the four walls of their buildings.

The two respective softwares most often implemented are Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM). As the name of each suggests, ERP helps manage business processes of an entire enterprise, whereas CRM manages relationships with customers and clients.

Let’s take a look at the functionality of each and see how the two systems can ideally work together.

How CRM Works

A CRM system generally has an “outward” emphasis that focuses on increasing sales — how can we streamline and improve efficiencies, processes, and accuracy when dealing with those outside our company, namely customers? The system is leveraged by sales, service reps, and marketing and facilitates the acquisition of new customers and keeps existing customers happy so they keep coming back.

Customer service is a differentiator that helps many manufacturers stand out from competitors. Managing customer relationships, building trust, and maintaining healthy, long-term relationships with them is an imperative part of reducing churn and maximizing customer satisfaction.

CRM software allows a company to manage existing and prospective client communications and activity. In addition to consolidating information such as a client’s name and contact information, detailed data can be recorded, including order history, specific needs and preferences, previous technical support, notes, and more.

Customers can be segmented into groups or categories to help sales and marketing target customer needs more effectively. Criteria can be selected to run reports based on customer activity or other data. For example, select only those customers within a particular geographic region, and who haven’t made a purchase in the past six months, and who engaged with a recent email marketing campaign by clicking a link. This highly targeted segmenting can provide sales with valuable data and insights when determining how and when to follow up with prospective and existing clients.

How ERP Works

Whereas a CRM system has an outward focus on increasing sales, ERP systems focus on reducing costs internally by improving business processes, resource planning, and creating efficiencies across an enterprise. Its focus is not solely on one or two departments; rather, it creates a flow of information throughout an organization to identify opportunities for improving performance, productivity, and profitability.  

Custom dashboards give each department the information they most readily need, and standardized processes and reporting can be implemented at the click of a mouse. Meanwhile, other departments can still view information as needed to improve collaboration, anticipate potential roadblocks or issues, and improve overall efficiencies.

A major benefit of ERP is its ability to minimize redundancy of data because every area of an organization is captured in a shared database, including services, production, inventory, finance, and more. Additionally, other softwares can be integrated with the ERP to create even more transparency, including human resource management (HRM) systems, supply chain management (SCM), transportation management (TMS) and, yes, CRM.

How CRM and ERP Work Together… And Why Manufacturers Should Care

It’s no longer necessary to maintain multiple databases independent of one another. In fact, doing so can put your company at a major disadvantage. Systems, including CRM, need to be integrated within an ERP suite to provide the critical link between internal operations (supply) and external customer needs (demand).

Communication between the two platforms helps everyone make more informed decisions. Sales not only can improve customer relationships and nurturing because of information managed within the CRM, but can also leverage ERP data such as inventory, production capacity, invoicing, or delivery schedules to determine the organization’s ability to meet client expectations. Robust systems that offer mobile access can help field service reps and sales gain real-time insights into the entire enterprise, allowing them to better serve customers. The company’s reputation for delivering on its promises is kept, more deals are closed and, if there are problems, sales is notified ahead of time to address them immediately.

There are many additional benefits of integrating CRM and ERP systems. Ideally, obtaining the systems from the same provider can ensure full integration, the highest level of communication and collaboration, and provide optimal ROI for both. Making sure the provider is experienced in your industry is just as important because they can leverage insights obtained from similar organizations to provide the best solution possible and offer the support needed to maximize system capabilities as your enterprise grows.

Microsoft Dynamics 365 is the powerful, world-class solution that Wipfli offers to its customers, and their experts would be happy to demonstrate its capabilities and discuss how it can solve your unique challenges. Reach out to them today for a no-obligation consultation.