Common types of business software: ERP vs CRM vs SCM

Many types of business systems are playing an increasingly important role in the operation management of an enterprise to improve its overall effectiveness. To have a clear view of what is business software, it is the integration of the following software in business management.

Enterprise resource planning (ERP), Customer relationship management (CRM), and Supply chain management (SCM) are three specific custom software services. These types of business software offering powerful enterprise tools to streamline operational processes. 

All these business process management systems provide core functionalities for managing data from different parts of the business. Thus, it’s necessary to comprehend each system’s benefits and majors features. 

Enterprise resource planning (ERP)

To better understand what is ERP in business or Enterprise Resource Planning, is a business-performance management system that records and manages all core aspects of a business, including product planning, sales and marketing, finance, and human resources. It means EPR focuses on inward data of how efficient your team is working together. Software developers design ERP to streamline Business system processes and monitor them in real-time. Automation functionality helps managers to reduce the cost of operation and administration while enhancing productivity. The centralization of data will make the business analysis much more swift and coherent. Whereby, the business can benefit from those analytics and forecasts to respond immediately to almost market changes. Implementing an Enterprise Resource Planning system also increases the ability to trace stock and detect any hazards or defects, which will improve the accountability of your business.

Some typical features of ERP

• Record and track information of business in real-time, within and across sectors
• Give automatic warnings about any issues happen
• Analyze the database for strategy planning
• Manage manufacturing following every step of the progress
• Manage recruitment and initiative hiring
• Manage personal information of employees, their compensation & benefits

Usually, large-scale enterprises will utilize the ERP system built by a software outsourcing company. Small companies use a more lightweight version of this system for their management solutions. 

Customer relationship management (CRM)

Customer relationship management, or CRM, is another among business management system examples that manages a business’ customer information and interaction. CRM is designed to create high-quality management systems and consistent experiences to advance customer relationships and increase sales. CRM standardizes the sales process by automating repetitive tasks to improve response time. It ensures qualified, timely services to fulfill prospects’ demand and make them become loyal customers. The system management tool is also advantageous at executing and evaluating marketing campaigns to pursue new leads. Making use of the collected database, managers can have an overview of interactions and purchasing patterns of customers to adjust sales and marketing efforts. That’s how the CRM system helps to increase profitability in the long-term. Simply put, in contrast to ERP, CRM focuses on outward information, which is how your team takes care of prospects and customers.

Some typical features of CRM:

• Manage contact information of customers, including names, mobile/emails, addresses, and social media accounts
• Track all interactions with specific contact
• Manage high-quality leads based on detailed segmentation
• Automate and evaluate marketing campaigns
• Report and analyze sales and customer behavior

Supply chain management (SCM)

An entire process called “supply chain” originates from gathering raw materials from different suppliers, manufacturing and packaging the finished products, then distributing to wholesalers or retailers, and selling them to the customers. Supply chain management, or SCM, is a system management tool that integrates and manages the information flow of the supply chain across all related parties, including suppliers, manufactures, logistics coordinators, distributors, and retailers. By streamlining the activities of production, logistics, and distribution, the SCM system allows the entire supply chain to run smoothly at a lower cost. The lines of communication among transport companies, suppliers, vendors are also improved. It helps to minimize logistical errors and delays, which might affect the production line. While ERP software deals with the internal working processes of a business, SCM software focuses on collaborative data from external suppliers. Some typical features of SCM:

• Track, manage, and optimize inventory, or warehouse
• Manage vendors and suppliers
• Automate and track the processes of the purchase order
• Update logistics and shipping status to improve delivery performance
• Forecast customer demands to plan procurement and production processes
• Manage faulty goods and process insurance claims or refunds

In some modern SCM systems, the enterprise software development company also adds some extra modules such as product life cycle management or contract management. 

Which is the best for your business?

To decide what is the most suitable business system development for your business, consider your management demands and priority.

CRM and SCM focus on different aspects of the business. CRM deals with customer-related tasks like marketing and sales, while SCM helps to manage suppliers of manufacture and distribution.
On the other hand, ERP offers a broader range of resource management. It benefits large enterprises or organizations in cost-cutting and accountability improvement.

In case your business is not ready to implement the full-option ERP, experts from software development firms recommend starting with CRM or SCM. Think about integrating with the ERP system when your business is scale-up enough to warrant ERP.

To sum up

• ERP is designed to track and manage almost core aspects of a business like planning, sales, marketing, finance, and human resources. 

• CRM is designed to create a consistent customer experience through sales and marketing. 

• SCM is designed to integrate and manage the flow of information on the entire supply chain. 

Although there are still some overlap features between ERP, CRM, and SCM, each business system still has its own advantages that are worth your investment to boost the business’ efficiency and increase profits.