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In today’s world, data is of utmost importance. Every day, businesses and their employees generate massive amounts of data. Every team member learns something new and possibly important every time they pick up the phone and chat with a client, walk out to meet a new sales prospect, or follow up on a significant lead. But where does this information end up? Perhaps into notepads or laptop docs, or maybe it’s just in their heads. This can lead to lost information, prospect leads not being followed up on, and ineffective targeting based on instinct rather than data. This would make acquiring customers a guessing game rather than an exhaustive exercise based on facts and data. In worst-case scenarios, if the customer decides to discontinue, there is a risk of losing all the data associated with that particular customer. The solution to this problem is CRM.
What is CRM?
CRM stands for Customer Relationship Management. The customer is an essential stakeholder in any business, global or local. Even if the product is good, the marketing is on point, but if no one is ready to buy the product or use the service, it is useless. Also, once a customer is onboarded, building a long-lasting relationship with the customer is of prime importance. It is a well-known fact that retaining customers is more beneficial for businesses than onboarding new ones. Thus, fostering permanent relationships with customers becomes necessary. CRMs are software that aids in this. They help track the entire customer journey so that businesses can identify critical touchpoints and see what works for them and what doesn’t. All data is stored in a central database and can be accessed by people working in various functions like marketing, sales, etc.
In 2008, only 12% of businesses used cloud-based CRM – This figure has now increased to 87%
Why do companies need a CRM?
CRM platforms help reduce friction because they’re designed with your customers and the customer experience in mind – a CRM takes care of everything customer-related. With a plethora of tools and integrations, CRMs unify all of the work your sales, marketing, and service teams conduct, making it simple for you to centre business goals and daily work around your customers jointly.
CRMs help in streamlining procedures like data synchronisation and sharing that are otherwise time-consuming. There is no need to update contacts or other customer-related data manually. Contact records and data are promptly synchronised and updated in the system. It does not matter who communicates with a connection. It can be a person from the marketing team, a sales representative, or a customer support executive – once the interaction occurs, it is immediately registered.
Teams will have access to correct records that can be easily shared from within the platform by syncing all the data and every interaction between your team and a customer. The CRM thus becomes a single source of truth for your data, allowing your team to develop personalised customer experiences quickly.
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How does a CRM work?
A CRM system essentially allows you to store information related to customers like the organization they belong to, their email addresses, contacts, etc. Once all the data is added, it tracks the entire user journey from the emails sent, conversations had, meetings scheduled, and much more. The CRM records every interaction with a customer across any channel – phone, email, or another -. Some CRMs also allow mobile data capabilities. The inclusion of social media, too, has changed the picture. Businesses must now respond to Tweets, Facebook posts, LinkedIn debates, and more in ways they never have before. There are some CRMs that cover these channels as well. Apart from this, teams can add comments, create hierarchies, and arrange follow-ups if needed. CRM makes it easy for any team member across functionalities to access data for their purpose.
47% of users polled in a Capterra study said that customer satisfaction significantly improved, along with customer retention when they were using a CRM system. Users of the CRM also saw a 45% increase in sales revenue and a 39% improvement in cross-selling and upselling success.
Benefits of CRM
Serves as a centralised repository
Having all data in one place has its advantages. It allows easy tracking and sharing. CRMs allow your entire sales team to keep all prospect information in one place for any length of time. This has two significant advantages 1) Easy cross-team access and 2) Management of all information from a single location. Team members, especially sales representatives, don’t have to go through endless files or records to obtain information on leads or prospects to follow up on deals or close them.
Due to this centralised communication, there is healthy knowledge exchange and collaboration between teams, which ultimately helps achieve determined targets and build a consistent brand image. In addition, each team member can leave their observations for various prospects, which can aid others. For example, if a sales team member observes a particular reason for leads being disqualified, he can record the observations in the software. This information can be used by the product and technical teams to improve the offerings or by the marketing teams to bring about a change in strategies.
Teams can achieve this with a CRM by tagging salespeople and managers on certain transactions they want them to work on. The system also allows sales leaders and salespeople to reassign individual leads with the press of a button. Finally, salespeople don’t need to leave the CRM to compose and send emails to team members in order to have these conversations; instead, all communication can be done directly from the CRM.
Nucleus Research revealed an average of $8.71 returned for every dollar spent in 2014. Though this number hasn’t been updated since then, Dynamic Consultants commented on the evolution of the CRM market in 2021 and calculated that this number may have increased to an average of around $30.48 for every dollar spent in 2021.
A CRM system gives an in-depth view of all your data and metrics, no matter what sources they are gathered from. This is one of the most significant advantages of a CRM system, and it leads to other advantages when data becomes available. With a CRM, you can see how many prospects actually open the emails that you send them, which links in the emails they interact with, how often they communicate with your sales team, which CTAs they interact with more, and what they require when they call customer support, and much more. This helps organisations identify their strengths and weaknesses along crucial customer touchpoints and ultimately plays a key role in boosting revenue.
Dashboards and Reports
Using reporting capabilities such as sales dashboards and reports, CRMs allow your team to collect and organise data about prospects and deals. Members can use them to automate and manage their deadlines, conversations and relationships more effectively. They can also assess their own performance and keep track of their objectives and the effort required to meet their quotas. Sales managers can use these sales reports to monitor how their team is doing in terms of meeting targets and reviewing the number of deals that have been closed. Senior Management Executives can also keep a track of revenues and ROI.
Dashboards can be designed for specific purposes like emails, forms, CTAs etc. Such marketing stats, specifically click-through rates, open rates, and download ratios for different campaigns would be of particular importance to a marketing director. For example, a dashboard can be created to track the performance of an email marketing campaign. It will give stats like how many individuals received a specific email, how many opened it, and what the click-through rate is, among other things. This will help the team determine which email performs better and modify their efforts accordingly.
On the other hand, a sales manager would be interested in knowing how many calls are made every hour and how many of those calls result in positive action, such as a future meeting or demonstration. Without having to search, filter, sort, or run a report, dashboards allow users to instantly access the data that matters most to their processes.
A report on the State of Sales by LinkedIn found that 64% of companies consider CRM technology to be either impactful or very impactful. Additionally, sales teams using CRMs also showed a 17% higher job satisfaction.
Personalised and Tailored Targeting
Since almost every aspect of customer interaction is recorded in a CRM, it enables organisations to categorise their customers and create personalised campaigns for them. For example, you can create various campaigns for those that share a significant resemblance, such as an interest in a specialised product or a particular intent that a category of prospects show. Many CRMs provide this feature, which allows you to send up a series of automated emails that speak directly to specific prospects and are triggered by specific behaviours – like them downloading a particular ebook or completing a certain number of page visits. Such campaigns can be launched at any stage of the sales process. For example, an organisation offers a suite of games. The CRM will help you identify buckets of leads interested in a football game. Now, you can create a targeted campaign for these leads wherein they will receive communications related to that particular game itself. This will help in concentrating efforts and boost conversion.
Enhanced Productivity and Efficiency
Automation aids in accelerating tasks carried out by humans. Automation is a feature of CRM platforms that can be seen throughout the organisation. For example, CRMs can help automate sending of emails to prospects – you just have to set up workflows and triggers, and the system does the rest. You can also create chatbots to identify and filter leads coming in on websites and other channels. Chatbots can engage in initial conversations with prospects, and after a few filters, the conversation can be handled by a customer success executive. Even follow ups can be automated via emails. This frees up a lot of time for teams that can be utilised for other purposes.
Marketing departments may devote more time to developing campaigns that resonate with their target audiences, analysing data, and experimenting with alternative techniques based on analytics. Sales representatives can focus on selling customers the right product or service. Customer care representatives can devote their time to assisting consumers with more sophisticated needs, such as inquiries, problems, or requests.
Thus, automation of tasks by CRMs boosts the productivity and efficiency of teams immensely.
Research from Salesforce indicates that CRM Software can increase sales by as much as 29% while improving sales forecasting accuracy by up to 32% and improving sales productivity by 39%. The result is better business outcomes all around
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What is ERP?
Enterprise resource planning (ERP) is an application that facilitates management and integration strategy that helps firms manage and integrate their numerous operations. Many ERP software systems benefit organisations because they help them adopt resource planning by combining all of the operations needed to run their businesses into a single system. ERP software can connect planning, purchasing, inventory, sales, marketing, finance, human resources, and other processes.
Earlier, ERP systems used to be singular suites that worked in isolation and didn’t communicate with other systems. Each system required extensive upkeep, and complicated and expensive programming in order to meet specific business requirements. This hampered or even prohibited the adoption of new technologies to optimise processes.
Modern ERP solutions now provide flexible deployment choices, enhanced security and privacy, long-term sustainability, and low to no-code customization. However, the most significant advantage that it gives is that it will instil continuity and durability in your business and processes by providing insights that allow quick innovation in the present processes while also preparing your organisation for obstacles and challenges that lie in the future.
Without an ERP solution, each department’s system would be tailored to its own needs. Each department still has its own system, but with ERP software, all of the systems can be accessed through a single application with a single interface.
A 2020 report found that 93% of organizations report their ERP projects as successful. After ERP implementation, 49% of companies said they improved all business processes
Why use an ERP?
It’s critical to be able to adjust to change in today’s fast-paced corporate environment. A successful ERP system enables an organisation to be adaptable to changing market dynamics and customer needs by offering flexibility and scalability. You can start with certain applications that make sense right now and then add on seamlessly linked applications as your company grows.
Using an ERP system to run your organisation generates efficiencies that help your company grow leaner. Many organisations claim to be able to expand without adding extra workers or incurring additional IT costs. The ROI of a more efficient, fully optimised corporate environment easily outweighs the expense of deploying an ERP system.
An ERP system can help your company thrive by eliminating inefficiencies and time-consuming resources. With ERP software, it becomes easy for different departments to communicate and exchange information with the rest of the organisation. ERP collects data from various divisions in order to make it available for others and use it in a profitable manner.
How do ERP systems work?
An ERP system collates the data generated by different business functions and saves the information in a central area where it may be accessed by employees who require it. It breaks down the silos that plague many firms and ensures that everyone has access to the information they require.
An ERP system reduces the number of resources required to manage a firm efficiently while yet maintaining profitability and growth. The ERP system differs from a single application in that it allows your company’s other enterprise modules to share a single database.
Assume that your company’s ERP system is nearly completely automated. ERP takes care of data entry in the backend and also shares information with other departments who want it.
Let’s take an example of an eCommerce organisation. If, at a particular hub, an order is received for an item which is almost out of stock, the inventory modules of the ERP application send a notification to the teams in charge of stocking up. At the same time, a notification is also sent to the sales team to keep a watch on orders so that they do not exceed the amount that is currently present in the inventory. An analysis of the time in which the stocks neared exhaustion is also performed and sent to the teams so that appropriate forecasting can be done.
In this way, Enterprise Resource Management systems integrate various functions and ensure optimal utilisation of resources.
In a study of companies implementing ERP, 85% had a projected timeline for ROI. Of that group, 82% achieved ROI in their expected time. The top three benefits businesses said they gained from an ERP system are reduced process time, increased collaboration and a centralized data system.
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Benefits of ERP
Better Coordination between teams
ERPs enable companies to instantly access information for clients, vendors, and other key stakeholders. This translates to higher customer and employee satisfaction, faster reaction times, and increased accuracy. All functions right from inventory, sales, and marketing to HR remain in tandem due to the integration brought about by Enterprise Resource Planning systems. Departments are better able to interact and share information better and work with great synergy. This saves a lot of time and enables each department to carry out their tasks to perfection.
Data is the new oil. Organisations which can mine useful insights from customer data have a competitive edge in the market. Technological advancements are integrating data with smart AI systems for augmented analytics reporting, potentially allowing for on-demand insights via voice requests. One of the most important features of ERP is that it functions as a powerful and exhaustive data hub. An ERP system helps you to collect, store, and analyse data from all of your operations in one place, acting like a single source of truth and enhancing the visibility that organisations need to execute key business and strategic decisions. Because of the centralised data, a company may access real-time data and develop more valuable reports. Without the use of different spreadsheets or data sources, it is possible to compare functions across departments and to monitor business variables such as inventory levels on a daily basis in order to better regulate capital.
Enhanced Customer Satisfaction
ERPs enable companies to instantly access information for clients, vendors, and business partners. This allows smooth and seamless coordination between functions, leading to near-perfect execution of tasks. This results in higher customer and employee satisfaction, faster reaction times, and increased accuracy. Multiple departments may easily access and cooperate on client needs with centralised customer data, resulting in quicker response times and enhanced delivery and order accuracy. Instead of managing spreadsheets, sales personnel may focus on creating customer connections, and marketers can construct customer-focused campaigns.
ERPs enable companies to instantly access information for clients, vendors, and business partners, resulting in higher customer and employee satisfaction, faster reaction times, and increased accuracy. Multiple departments may easily access and cooperate on client needs with centralised customer data, resulting in speedier response times and enhanced delivery and order accuracy. Instead of managing spreadsheets, sales personnel may focus on creating customer connections, and marketers can construct customer-focused campaigns.
The advantages of using an ERP system in an organisation include streamlining corporate processes, which makes it easier and more efficient for businesses to collect data, regardless of which department they work in. ERP works like an additional workforce or team whose responsibility is to keep organisations on track, paying attention to every detail and making work-life smoother and more efficient for everyone involved, from software users to customers.
Differences in CRM and ERP
Customer Relationship Management software acts as a centralised database for all customer related data. It makes it easy for various business functions to access the data
Enterprise Resource Planning software helps businesses integrate various functions like operations, marketing, HR, Sales, finance, inventory etc
CRM focuses on increasing revenue through sales
ERP focuses on saving costs
CRM is primarily used to foster long lasting relationships with customers, to improve customer retention and boost customer loyalty
ERP is primarily used to optimize the use of resources across business functions and timely implementation of deadlines
CRM is majorly used in front office activities
ERP is majorly used in back office activities
CRM systems sometimes do not include ERP components
Some ERP systems include a CRM component
Along with the differences, there are plenty of similarities as well.The ultimate aim of both CRM and ERP is to facilitate better coordination between various business functions.Both act as repositories of data and perform data processing functions to generate reports.Both systems help enhance employees’ productivity and boost businesses’ overall revenues.Since both CRM and ERP focus on the automation of processes, they help in reducing errors and boosting the accuracy of business processes.
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Are both CRM and ERP necessary?
Since CRM and ERP have certain specific functions of their own, having both of them would mean an exhaustive coverage of all the internal ( in terms of business functions like finance, operations etc) and external processes (in terms of acquiring, and retaining customers). However, sometimes businesses can’t afford to bear the costs for both and thus can choose one of the two according to their business model. For example, a business with a large customer base and relatively simpler internal functions can go for a CRM as collating and maintaining data for customers is done effectively in a CRM.
On the other hand, businesses with complex internal functions and a limited customer base can opt for an Enterprise Resource Planning solution. Thus, businesses can choose accordingly if they want to go for a CRM, an ERP or opt for both. However, if we talk about the long run, businesses at some point do scale and become large and thus having both CRM and ERP can definitely prove fruitful.
CRM & ERP integration
Though CRM and ERP can be used for specific purposes, their integration will give organisations a truly 360-degree view of their business. There can be many cases where the integration of these two systems will prove fruitful. For example, when conducting an upsell or cross-sell campaign, a sales professional would seek to examine a customer’s order history, credit status, preferences or pending payments. This will help him understand what particular product he can choose to upsell for that customer.
When the team is thinking about offering discounts, the finance department may require access to the CRM system to calculate sales commissions. Business leaders that require a centralised approach to review pricing structures and monitor KPIs like client acquisition costs and customer lifetime value will benefit from a CRM system integrated with an ERP platform.
While the advantages of a successful ERP and CRM integration strategy sound appealing, there are a few major obstacles in your way. The most common problem is standardising all of your data across all of your business processes. You must verify that each connected system can accept the data being sent, which necessitates data transformation to accommodate a variety of formats.
In addition to this, for a robust ERP-CRM interface, it is very essential to clear up obsolete and outdated customer data. A central integration platform is intended to provide you with a modern, clean method to integrating the systems that handle your customer data, but it’s tough to get the most out of it if you haven’t purged those customers who haven’t been true customers in years.
Furthermore, both systems include data that is vital to the growth and profitability of your company. Instead of having two completely different record-keeping and operating systems for this data, maintain them in sync to ensure that there is only one source of truth for that data.
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Benefits of CRM/ERP Integration
Too often, businesses are forced to spend time on manual, labour-consuming integration tasks that eat up valuable personnel resources. Using an integration platform with prebuilt ERP and CRM system connectors will help you manage these procedures by automating workflows and improving efficiency.
Get Rid of Duplicate Data
You’re more likely to come across duplicate customer data if your ERP and CRM platforms are compartmentalised and don’t operate together. Because some of it may not be completely duplicated, determining which should be the master record can be difficult. An integrated platform eliminates the possibility of encountering duplicate or erroneous data while also assisting in the improvement of data-driven processes throughout your whole business ecosystem.
Encourage employees to work together
Because everyone is finally on the same page, working cross-departmentally with a connected, integrated team allows for additional functionality. It was previously impossible to access the same data at the same time. Real-time data is now constantly exchanged and utilised, and employees, regardless of department, may get up-to-date information whenever they need to interact with or learn more about a customer.
Unified solution for ERP and CRM
As we saw before, different businesses opt for either CRM or ERP according to their business model. Companies that use ERP frequently focus more on the finance and inventory modules, which automate basic accounting activities, keep track of inventories and allow stakeholders to strike a balance between inventory management and cash flows. Companies using CRMs are more focused on the sales and customer retention part. In any case, a solution that provides a combination of both CRM and ERP can give businesses a true 360-degree view.
ERP systems that include CRM as part of the platform offer a variety of benefits. Unified ERP and CRM systems are typically less expensive than buying point solutions separately, and the unified data model ensures that all data is updated in real-time, without the need for batch uploads or middleware connections. Systems created from the bottom up for ERP can handle transactional operations better, which means easier programming, customizations, and integration with third-party applications.
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