Starting with a small business provides entrepreneurs a lot of excitement and motivation since there are more business opportunities to take in order to grow a business. With dedication, determination, and hard work, any small business owner can make a business grow especially with the use of the right business tools. If your small business has been slowly growing for the past years and some systems are already impacting your business’ growth potential, then it’s time to use business solutions that will improve systems in your business.
There are now a lot of companies offering dynamic small business solutions. These business tools usually allow businesses to have better insight about the business, improve financial management, and increase sales. When it comes to effective dynamic business solutions for small to medium businesses, some of the most popular tools used today are the CRM and ERP.
What are CRM and ERP?
CRM or Customer Relationship Management and ERP or Enterprise Resource Planning are tools developed to increase business profitability. These business solutions function in similar ways as they both aim to help business increase profits and improve growth potential by improving various business systems.
Some businesses have integrated ERP and CRM systems since some functions of these two tools overlap. However, the core functions of these two systems differ in various ways. Before using these tools for your business, it is important to have a clear understanding of these two tools as a separate system so you can also clearly understand the impact of each tool in your business operations.
Customer Relationship Management (CRM)
CRM software focuses on the customer-side of your business operation. CRM tools manage customer information and data which are used all across your business operation from managing and sales to accounting. With a quality and effective CRM system, a business should be able to capture and put into data all interactions with a customer and with this data, business can have better insight about customer relationship and devise a plan to build and improve customer relationship.
Enterprise Resource Planning (ERP)
This business solution is the system focused on your business operation. It is designed to help business processes to become more efficient and effective. With an effective ERP system, core business functions can be really improved from accounting, inventory, warehousing, and management. It provides real-time updates to various departments of the business so employees and executives can have the latest information about the business. ERP software can also provide business owners a heads up with its forecasting ability which is very vital in solving business problems. With a business forecast, businesses can predict outcomes and make preparations in case a problem is anticipated.
Now that you understand the functions of each business solution, it is now easier to identify their differences. While both systems are designed to increase business profits, their approaches differ in various ways. As mentioned above, ERP focuses on the business process while CRM focuses on the customers. Another great difference is that ERP is designed to make business operations more efficient by reducing capital expenses on business processes like cutting costs. CRM, on the other hand, increases profits by helping the business improve sales volume. This is because improved customer relation translates to customer loyalty which in return results to increase sales and profits for the business.
Most companies nowadays use business solutions integrating these two important business tools. With an integrated CRM and ERP systems, you can achieve customer expectations and satisfaction while also reaching your business goals. These tools require cost but it is definitely worth it, especially for small businesses, once processes in the business is improved and better customer relationship is achieved. Small businesses will not only be able to increase business profitability but will also be able to take advantage of its growth potentials.