Get to know the concepts of CRM & ERP

Greetings, in this article we will look at the basic concepts of CRM and ERP. What cases can be implemented.

1. What is CRM: a bit of theory

As stated on Wikipedia, Customer Relationship Management (CRM, CRM-system) is an application software for organizations designed to automate strategies to interact with customers (clients), in particular to increase sales, optimize marketing and improve customer service by maintaining customer information and history, establish and improve business processes and subsequent analysis of results. 

CRM systems focus on recording and maintaining the customer base, sales and communications. It is a basic tool for sales departments, which is built on two modules – Contacts and Companies. Over time, and with the development of Internet marketing, they added a third module – Lead, which characterizes the interest of a potential client, not yet in the base of the Contact. 

2. Sales funnels and potential customer

The division into three modules allowed to build business processes and sales funnels to work. 

These funnels are sequential, step-by-step tasks, the solution of which eventually leads a customer to a purchase. 

They can be as simple as receiving and processing incoming requests in a certain amount of time, as well as complex. If we consider an example, these are, let’s say, long funnels for a travel agency: 

  • first, the registration of the tour and the “card” of the client is fixed; 
  • then after a while begins communication with the client through mailings or advertising on the Internet with an offer of new tours; 
  • after marketing communication, if the brand strategy allows, the work is connected to the manager, who is tasked with contacting the customer and offering services in advance.

The key functional that is required to work in the Ukrainian market – telephony (making and fixing conversations), messengers and sms-gateways, integration or API available to finalize the creation of requests from the site. For retail, of course, it’s integrations with marketplaces, logistics.

CRM in their pure form will suit businesses that provide services and retail. Most of the Ukrainian developments on the CRM market come with an implemented set of functions for retail. For example, for him it fits Keepin CRM. For services, a lot of necessary solutions – integration with marketplaces, logistics. 

On the market there are universal and industry-specific solutions that already cover the tasks of a particular business. But often they are limited to the sales department. Automation of the whole cycle of processes in the company must be approached strictly starting from the fact how comprehensively the system covers all the processes and ending with the prospects of scaling. So that after a while we are not stuck in the limitations of the system and plans of the developers.

To summarize, I would highlight the main points that should close the CRM

  1. Customer and company database 
  2. Communication with the customer base through omnicanality 
  3. Availability of leads or their variations to handle unqualified inquiries 
  4. Transaction module for commercial activities 
  5. Merchandise catalog for maintaining a minimum roster 
  6. API for non-standard tasks and integration with websites and third-party applications

3. ERP: What it is and for whom it’s applicable

Once again we turn to Wikipedia. ERP (Enterprise Resource Planning) – organizational strategy to integrate production and operations, labor management, financial management and asset management, focused on continuous balancing and optimization of enterprise resources through specialized integrated application software package that provides a common data and process model for all business areas.  

ERP systems are designed to cover all company processes. I would include market players such as Microsoft Dynamics, Bitrix24 and OneBOX OS. They can automate the processes of all departments, from sales and marketing to production. 

Also such systems can be equated and universal CRM. If we consider what modules the systems consist of, these are:

  1. CRM – to work with clients and conduct commercial activities.
  2. Tasks – the universality of the module allows you to assign and monitor the implementation of projects for any department of the company.
  3. Warehouse accounting – maintenance of the product catalog and residuals of goods and services.
  4. Universal constructor – for building modules and logic.
  5. Marketing – a set of modules for communication with customers.

In most universal CRM-systems we can meet 3-4 points out of five, the universal constructor will not be, because it’s already involves going beyond the scope of work with customers.

Systems are more suitable for medium and large businesses, because with their help the whole cycle of work can be closed. 

4. Case Implementation: an example

Let’s look at an example of a case study of one of the projects using the system.

The sales department works in CRM, the sales cycle is long – more than 6 months. 

  1. First, depending on the stage of preparation of the lead or transaction tasks for communication with the client are set. Also production employees are connected to calculate the work. 
  2. After successful closing of the deal a set of tasks is created for the production of the product and for the purchase of materials from suppliers. 
  3. Based on the results of task completion, the sales department sees the status of production tasks within the deal and can promptly notify the customer of events with the order when communicating with him. 
  4. After the closure of production tasks, tasks for the installation team are started for the installation of the product. The installation team has no access to the system: they fill in the result in a special form, which closes the task with the result and transfers the data to the transaction.

To discuss the work in the sales department, it is necessary to operate with theses, drawn up in writing, for example, in Excel, which is very handy. Regulations or KPI, which are calculated on the basis of the data received within the systems, will help. Note that any financial reports, particularly KPIs, are visually available in the systems.

5. How to distinguish CRM from ERP?

Let’s remember the key differences:

  • CRM – the main functionality is aimed at the sales and accounting of customers, there may be a semblance of a commodity module and task module;
  • ERP – a universal solution for automating and operating any department within the company.

Some manufacturers, starting to do CRM, have not abandoned this formulation, although over time have gone in the direction of ERP. So some, when asked what ERP systems they know, will name CRM among them, which is no longer the case.

Having a system closes a lot of questions and problems. But, of course, it is not a panacea, because you need to conduct processes and follow the rules of the implemented system at every stage of the business. 

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