Monday, January 20, 2014

ERP, CRM and why it matters

It is all about the relationships.  This is a universal truth about life and business, personal and professional relationships.  Who do you like?  Why do you pick one solution over another, even if the solution costs more?  Within bounds, it you have multiple solution choices that accomplish the same result, why is one a better choice?  Do you think it has anything to do with the people involved?


People do business with people they like and are most like them.  That is how the saying goes and there are a few things we can take from that statement.  

  • One, the key word is “People” in the statement.  There might be some “stuff” involved in a business transaction, but it is the people that sign the papers, it is people that deliver the stuff, it is people that use the stuff and order more of it. 
  • Two, all anyone has to do to validate this statement is look at any transaction they have made in which they needed to consult with someone.  Why did you ask, what did you ask, whose solution did you select? 
  • Three, “are most like them”, is key too.  We all know what it is like to show up to a gathering either too casual or too formal.  Our relationships are similar.  We are just naturally attracted to people that are like ourselves, talk like we do, dress like we do and we feel understand us and our needs and the impact on our lives the proposed solution addresses.

Any tool that helps an organization manage customer relationships, which help your organization deliverer superior service and follow up and tracks the details will help.  In the software realm the main application that ties together the details is called Contact Relationship Management (CRM).  There are a great number of solutions in this area.  Some are housed in the Cloud and some are operated on-premise.   Many have customizable interfaces and workflows, but they all at some level track and manage the conversations between prospect and solution.


In the Enterprise Resource Planning (ERP) solution world many solution providers provide links and interfaces so that you can incorporate their solution with your ERP solution.  This can be a good thing in the case where there is no native solution or the solution lacks the feature and function needed to manage the prospect relationships.  There are different levels of functionality that is needed and it varies from one organization to another. 


When you consider that and ERP solution’s purpose is to integrate the enterprise, then an integrated CRM solution is generally preferred assuming again that it has the features that are needed.  In some cases it makes sense to integrate third party solutions.  The other party that creates the add-on application is dedicated to that solution and its functionality.  If that solution provider works directly with the ERP provider to integrate the solution and provide support, then you typically have the foundation needed to keep your people productive while they solution provider keeps everything working as designed.


Here is a major functional thought to consider.  Many CRM applications do a very good job of managing the sales process.  From prospecting and lead generation, communications tracking, to prospect sales funnel, to sale and the transition to customer.  Great.  What happens to the relationship management after the prospect becomes a customer?  At this point in time that role is typically relegated to the customer service department.  Also great.  But, there is an inherent disconnect from the suspect, prospect, sales to customer.


There should be an equal or greater emphasis on post customer sale effort.  It may take some work and effort, but most would agree that it is easier to maintain your customers than acquire new customers.


A fully featured CRM application integrated with your ERP solution provides the opportunity to continue to manage and track your customer relationships after your prospect becomes a customer.  This is no small feature.  It is important.  How great would it be to be able to review all of your interactions with your customers including phone calls, emails, and sales?  How much better would your sales force be if you could routinely and easily tag customers that have purchased a particular product and let them know about sales, complimentary items and other special offers?


In a traditional sales process a suspect is identified, after they are a suspect they become a prospect, a match to a product or service is made which is called an opportunity and then hopefully a deal is made and if they make a purchase, they become a customer.  Problem here is that this process needs to be repeated over and over again.


Loyalty programs are a typical way to bridge the gap, but these are still one-time purchases.  Relationship building applications like an integrated CRM application module helps to change this to a recurring interaction and a fuller relationship.   Remember the relationship drives the decisions.  
The better and longer you maintain the relationship, the better for both parties.


If you want to realize the full value of the relationship, then you need to create personal connections, exceed expectations and become their trusted advisor.  The relationships are built over a period of time in which each interaction deepens the bond.  They learn to trust you, because you recommend the right solution and not just the most profitable one.  You have their best interest at heart.


Some feature criteria you may want to consider and questions to ask may include how seamlessly does the solution integrate with your ERP solution.  What components do you need to consider on calculating its Total Cost of Ownership (TCO)?  What is the typical Return On Investment (ROI) time period?  This information can give you an indication of what it is costing you to not make changes.  What impact will it have on your technology staff?  How much time and effort is needed to train your workforce and implement the solution?  How easily is it configured?  What options do you have or are you locked into the delivered feature set?  What commitment does the developer have to you as a customer?  What changes and updates are planned to enhance the product in the future? 


Have you outgrown your existing solution?  Has your business grown to the point that the solution that once did a great job is now hindering your growth?  How well does your existing or proposed new solution enable growth in new markets?  Is the new solution in scale with the rest of your systems?


Dolvin Consulting works with industry experts to bring enterprise grade solutions to your challenges.  Start our conversation by contacting us today to see how we can help.