ERP solution with CRM module versus best-of-breed CRM database approach

Companies wishing to optimise their customer relationship management and are already operating an ERP system, are faced with the question whether to use the integrated CRM module (available in practically every ERP system) or to implement a separate CRM database which will need to be integrated with the ERP system. What are the differences between the two approaches and what advantages and disadvantages need to be considered?

Do we need a seperate CRM database?

Almost every ERP system today has its own CRM module. Often just a simple contact management database, in some cases sophisticated CRM functionality. It is very important to start by analyzing the specific requirements of CRM users and whether these can be met by the ERP’s CRM module or not. The investment issue has to be considered as well of course. Some ERP vendors provide CRM functionality at no extra charge. If functionality offered meets the demand the choice will be easy. In many cases however the functionality offered will not be sufficient and a stand-alone CRM solution has to be considered. An increasing number of ERP vendors, seek cooperation with specialised CRM vendors and concentrate on their core competencies.

CRM database requirements

CRM DatabaseCRM is a management philosophy. In order for a CRM database to operate a successful, all employees at front-office, (marketing, sales and customer service etc.) should be involved in a combined relationship network with the customer. The customer knowledge of all staff, dealing with customers, needs to be exchanged and aggregated. A one-view-to-the-customer will need to be available to all. Customers need to be addressed individually in order to become more successfully. All staff concerned with customer relations need to be given the opportunity, regardless of physical location (the office, home office, on the road and at customer sites) to retrieve essential customer information. CRM is equally important for control of resources in sales, marketing and customer service. Customers will need to be classified based on the profitability. Customer information is vital for product development, to expand the service business and for successful integration into the value chain of customers. Integration between CRM and ERP is mandatory to achieve such goals. Please note that a CRM module will often need to be integrated as well, just as well as a standalone CRM database. In both cases the CRM system will operate on a separate database.

ERP vs. CRM

Users of ERP system and users of CRM systems are generally different people with different requirements and missions. While ERP systems are operated by employees for internal processes like production and finance, CRM systems are operated by front-office employees like marketing, sales and customer service. CRM users are much more mobile, and will need mobile access to customer data. This can be achieved either online or offline. CRM users, based on their mobility, will use other devices than ERP like notebooks and Pocket PC’s rather than desktop PCs. CRM work often involves use of communication applications like Microsoft Office Outlook, Word and Excel. While ERP users primarily work with structured data in a relatively rigid processes that are suitable for transaction processing only, CRM users have a wealth of unstructured information like e-mails, letters, notes and contracts to manage. In character CRM users are usually more communicative, more individual, less likely to stick to predetermined rules, and often have to improvise,. All because they are dealing with people. ERP users will have many repetitive tasks and transactions, they appreciate fast input options via keyboard shortcuts, while the CRM users are working primarily with the mouse.

The success of customer relationship management within a company depends significantly on the user acceptance. The degree of acceptance of the system is highly connected to user-friendliness. A familiar look and feel, integration into existing office applications, on-demand reports, and support for reoccurring tasks using workflows.CRM vs ERP A modern CRM solution is flexible and can be adapted to changing processes. It has an extensible metadata model, an attractive and uncluttered user interface, integration with Office applications and preferably is accessible via an Internet browser from whatever location.

The acceptance of the CRM database can only be achieved if the employee is finally relieved of every day repetitive tasks without additional burden. This goal is achieved by integration of peripheral systems such as groupware, i.e. email, calendar, telephony (CTI), fax server, Word mail merge and project management. Incorrect data and double entries must be avoided at all time. The chief financial officer will of course be pleased when additional functionality can be purchased inexpensively. Due to high user-friendliness training costs can be minimized. the decision easier for a similar system. The investments needed for interfacing have to be included into the considerations as well. Thanks to standardised connectors and open standards this has become increasingly easier. In recent years both ERP systems and CRM systems have become more and more open to integration with external systems. The investment in security will have to be taken into account as well. At last companies should consider the fact that the introduction of a CRM solution requires completely different skills as opposed to the introduction of an ERP system. The introduction of the CRM database should best be realized by a specialized CRM integrator. Not the existing ERP partner.

Conclusion

At some point a company may have to choose whether to implement a suite approach (ERP with CRM module), or a best-of-breed approach (stand-alone CRM solution integrated into the ERP solution). Many companies fear the costs for interfacing and additional software. They accept basic CRM functionality which is available within their ERP system. Other companies choose the best of both worlds and integrate them into a best-of-breed solution. Likewise, there are companies who deliberately choose to separate the two systems and use interfaces to exchange essential business data. Companies that have a critical need in the field of CRM, and have no need or budget to replace their outdated ERP solution shortly, have the option of a temporary stand-alone CRM solution. They can for example decide to implement a SAAS solution (software as-a-service). Finally it should be remembered that not the only the software, but also the quality of configuration and implementation is essential for acceptance and success. The expertise of the integrator is crucial.

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