Why “CRM” Should Go Beyond CRM in ERP Systems

Customer relationship management (CRM), as a stand alone software application, can provide sales representatives and account managers with an easy to use contact management system for storing email addresses, phone numbers, fax numbers, etc. It can also provide a means for improved customer contact tracking, scheduling follow up activities, recording notes from conversations with customers, and directly emailing customers from a single application.

When a manufacturer or distributor considers selecting an ERP software solution with a fully-integrated CRM application, however, the business’s ERP selection team should ask itself to what extent the phrase “customer relationship management” applies to other functions and applications within the ERP system, such as customer order frequency, customer buying habits, order and line item fill rates, and on-time delivery for customer shipments. Why? Because when the concept of “customer relationship management” is applied to other functional areas within an ERP system, businesses can see improvements not only in customer and prospect tracking but improved levels of customer satisfaction, faster order entry, and improved visibility to real-time customer order status as well. Organizations engaging in an ERP selection project should consider the following criteria when selecting an ERP CRM software system with true customer relationship management capabilities:

1) Does the ERP system track how frequently a given customer orders a specific product? By tracking customer order frequency on a product-by-product basis, organizations can minimize instances in which a customer stops purchasing a product without the organization’s knowledge of the loss in business until a significantly later date. A manufacturing or distribution software system that tracks customer order frequency on a product-by-product basis can automatically send a message to a customer’s designated sales representative or account manager notifying him or her when a specific customer has not ordered a product within its normal frequency. This can initiate a follow up call to the customer to make sure they are still satisfied with the products and services that have been provided to them and minimizes the likelihood of a customer ceasing purchases from the organization without the organization’s knowledge. It can also initiate a proactive response on the part of the manufacturer or distributor to ensure the customer’s requirements are being met with each customer order.

2) Does the ERP system track customer buying habits and recommend the customer’s most frequently ordered items to the sales or customer service representative at the time a customer places an order? A sophisticated ERP software system can track those items a customer orders on a routine basis. At the time a sales or customer service representative begins an order for a customer, the system can automatically generate a list of the customer’s most frequently ordered items, allowing for fast order entry and reducing the amount of time it takes for a customer to place an order. This also reduces the amount of time it takes a customer service or sales representative to enter a customer order, giving the representative the ability to process more orders on a daily basis.

3) Does the distribution or manufacturing software solution have the ability to track order and line item fill rates on a customer-by-customer basis? Order and line item fill rates can be a strong indicator of a manufacturer’s or distributor’s overall level of customer service. An organization’s ability to service customer orders in full directly from inventory while meeting the customer’s requested delivery date can result in an increased likelihood of repeat customer purchases. An ERP system with integrated forecasting, planning, inventory management, warehouse management, and business intelligence capabilities can improve customer order and line item fill rates while simultaneously reducing on-hand inventory and associated carrying costs. Using the ERP system’s business intelligence features, the organization can gain real-time access to its order and line item fill rates for all customers in aggregate and drill down to see order and line item fill rates on a customer-by-customer and customer-product combination basis. The organization can then use this information to see those customers and/or products in which their service level is lacking and implement new internal business processes to improve its service level in these areas. The end result, again, will be improved overall levels of customer service and satisfaction.

Customer relationship management software functionality is a key requirement when selecting an ERP solution. That being said, the proposed ERP solution’s CRM features must extend well beyond those of basic contact management; the concept of customer relationship management must be applied to other functions within the ERP system to improve the organization’s overall level of customer service and give the organization a competitive advantage in the market.