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Tech
- December 8, 2022
When a business starts to grow, it becomes difficult to manage it using Excel spreadsheets — there are a lot of routine operations, data is lost. There is a need for a smart program that helps to control indicators, automate sales and hiring, forecast revenue and solve other managerial and strategic tasks.
But choosing such a program is also not easy. In the process of searching for the right product, a lot of terms and incomprehensible articles-instructions fall on us. To make it easier to understand everything, we have prepared a guide on CRM and ERP functionality, explained which system is better to implement, compared the functions and capabilities of the services so that you can make the right decision.
What is CRM
CRM (Customer Relationship Management) is a customer relationship management system. The task of CRM is to automate routine processes. As a rule, such systems are used in sales departments, where a transaction requires several contacts with customers. There are other industry solutions, for example, automation of mass recruitment, CRM for taxi companies, hotels, fitness industry.
Here are some examples of CRM functions and features that can help a business.
Systematization of customer data
The CRM database stores customer cards — they contain the buyer’s personal data, transaction information, documents, letters, conversation recordings, his applications, invoices and payments. Everything related to a specific client is recorded and structured in CRM.
Help and reminders to employees
In CRM, you set up a sales scenario adopted in your business — the so-called sales funnel. For example, when an application is received on the website, the manager needs to call the client, then send a commercial offer, call back again and coordinate deliveries, issue an act and invoice, and send them to the client. CRM will monitor the process at each sale and remind the manager when and what action he needs to perform.
Automation
CRM helps to save time on routine tasks. The manager does not need to constantly set the same type of tasks to managers — the system itself will do it. The service itself will also send SMS messages, track payments, and send the generated commercial offer at the right time. The main thing is to set everything up well.
Document generation
You can add templates to the CRM, and then the system will form contracts, additional agreements, acts, invoices and other documents for each transaction at the right time. Plus, CRM itself will put the signature of the manager who is engaged in a specific transaction in the document.
Employee motivation
In CRM, you set managers not only tasks, but also general goals and KPIs. For example, you can set a sales plan for an individual employee and the team as a whole, and then track how it is being implemented in real time. Managers will be able to see the sales of colleagues and the overall rating of the department — this is healthy competition that motivates them to sell faster and more.
Analytics and reports
In CRM, you can build almost any reporting, and employees do not need to waste time on it. Manipulations with numbers are also excluded — the report is made by the system itself, not by a person. You can study the general statistics for all employees, the effectiveness of a particular person, the number of transactions at different stages of sales. You can also figure out which sources of applications bring more concluded deals, where it is worth directing the advertising budget.
Let’s say you have a small company selling construction materials. You work both in the wholesale and retail market, and you are also actively expanding and hiring managers.
At first you were doing business in Excel, but then there were too many tables, data began to get lost, and financial planning gradually turned into chaos. You switched to CRM.
First, we set up a sales funnel, separately for wholesale and retail. Now managers do not sit in dozens of messengers and do not take applications from the mail — everything is collected in one place and distributed among employees.
Customers are satisfied. Managers do not forget to call them, because CRM reminds them of upcoming tasks. Managers are also happy — they do not need to spend time every time preparing and sending commercial proposals, and then coordinating documents with lawyers. They have more time to sell, now they earn more.
You’re happy too. In two months of working with CRM, we managed to find bottlenecks in the sales funnel and adjust business processes. Now each application is processed faster, there are more repeat sales, too, because CRM reminds you of this.
You can also see in real time how the sales plan is being implemented, which of the employees is overfulfilling it, and whose indicators are lagging behind. You also began to make more strategic decisions. CRM analyzes all the information about sales, you understand which areas are worth developing, and which are better to slow down. More correct decisions — more profit.
What is ERP
ERP (Enterprise Resource Planning) is a resource management and planning system, a program that stores all information about the company’s business processes and orders, it synchronizes the activities of different departments. The main purpose of ERP is the collection and structuring of information, as well as the automation of processes.
Resource accounting. The ERP keeps records of all production capacities and inventory, accounting of turnover. With the help of the system, it is convenient to determine and control the timing and volume of deliveries.
Logistics control. In ERP, you can conduct logistics — both internal and external, and control sales. If everything is set up, the ERP will send a message to a specific employee at the right time with a forecast on the waste of resources or a notification about their shortage.
Personnel accounting. ERP keeps records of human resources, calculates work schedules, and controls the number of hours worked.
Documentation. With the help of the system, they keep records and generate the necessary documentation, automate routine operations with documents, for example, create contracts.
Accounting and finance. ERP maintains accounting and tax records, and controls the financial condition of the company.
ERP is a set of different software modules in which employees can work. For example, a sales specialist enters an order into the database, and everyone else receives information about it and an action plan: they understand what needs to be done and when, the right amount of resources is checked in the warehouse without involving a specialist, and the procurement department receives data on the resources that need to be ordered. In addition, all information about the order is immediately available to the accounting department — specialists can immediately prepare and generate the necessary documentation.
ERP is serious software, as a rule, it requires expensive implementation and debugging.
The difference between ERP and CRM
Comparing CRM and ERP is not entirely correct: the first is a sales automation and control system, and the second is a resource management system, business processes in the organization.
In CRM, you start work at the application stage and gradually bring the person to the stage of the transaction and repeat sales. ERP starts working at the stage of the transaction — when it is necessary to fulfill the received order, ship products, analyze the financial condition of the company. Although, of course, there is no clear classification – CRM developers sometimes embed ERP elements into their program, and in ERP systems CRM is often one of the blocks that can be used.
CRM is a customer management system. ERP is a business process management system, which may include CRM.
What to choose — CRM or ERP
There is no universal answer, it all depends on the specifics of business processes, the size of the organization and your tasks.
ERP is useful if your company is focused on improving the efficiency of production departments and logistics, if you need to reduce production costs, deadlines for the execution of orders and increase the volume of products.
ERP is being implemented in companies where it is necessary to constantly monitor the workload of production, the availability of raw materials and contracts for its supply. As a rule, such systems are available in factories, construction organizations, and food production.
CRM is needed if you plan to actively develop a sales department, if it is sales that play a significant role in your organization. The system is needed for efficiency analysis, automation and systematization of processes.
CRM will help if there are problems in business processes.
The work of sales managers is poorly organized. Employees spend a lot of time processing applications and are constantly confused about who and what they promised. In CRM, you will set up a sales funnel scenario, and then the system will begin to guide managers and clients on each application in accordance with the prescribed stages and regulations. And managers will see the entire communication history in the client’s card.
Managers get lost in applications, forget to answer, miss the promised terms of communication with the client. CRM will collect messages from different messengers and other communication channels in one window. Plus, it will always remind you that a call is planned with the client or you need to generate a contract for him. This will speed up the work and improve the quality of service.
Employees procrastinate, there are suspicions that they are not working well or trying to deceive the manager, they are doing their own business during working hours. CRM has activity monitoring: you can see how many calls employees have made during the working day, how many deals they have concluded, at what stage of the sales funnel their customers are. It becomes clear which of the employees should be encouraged, and with whom to conduct a preventive conversation.
It takes a lot of time to create and send documents to clients. CRM generates the necessary documents according to the template, sends them, monitors the status and payment terms.
CRM is suitable for those who are engaged in small business, specializing in transactions that involve at least one direct contact with the client. It is also useful for those who sell through calls, letters and meetings with customers. CRM will not be superfluous for companies specializing in wholesale trade, retail sales with checks for decent amounts or a long transaction cycle.