Both CRM (Customer Relationship Management) and ERP (Enterprise Resource Planning) software application provide a way to automate business processes. We all know that the automation of business process increase efficiency and productivity, goals for all well managed businesses. However, the systems were originally designed to automate different functions. CRM solutions are used to manage business contacts, customer and vendor accounts, sales opportunities and sales pipelines, provide collaboration tools for users to manage calendars and activities, plan and manage marketing activities, and provide tools for customer support, and many other sales and service-related processes. A successful CRM deployment calls for a study of business needs and customer demands. This knowledge allows the solution to be effectively tailored for every unique business need. One should not confuse a CRM solution with simple contact management tools like ACT or Goldmine.

ERP is a system of managing operations and business functions, which include product planning, purchasing, inventory, customer service, order tracking, project management and other back-end business processes. ERP deployments require knowledge of financial and manufacturing, distribution and other operational business processes.

The lines between CRM and ERP are beginning to blur as ERP vendors such as Sage Software incorporate CRM functions into their software and other CRM vendors add ERP capabilities to their offerings. Both CRM and ERP industries are working to develop all-in-one applications to streamline internal operations and customer activities. The upside to this trend is a lowering of the TCO (Total Cost of Ownership) as software costs come down as a result of the code integration. The downside is that the risk of implementation difficulties or even failure goes up as the solutions become more complex and extend further in the organization.

Those who successfully leverage an integrated suite of CRM and ERP solutions do so having mastered knowledge of business processes throughout the enterprise.

by David Beck CPA.CITP

http://www.linkedin.com/in/davidbeckcpa