ERP, CRM, BI: what is the difference
Three tools often heard together and often confused, but they answer different questions: what is happening today, where each customer stands, what the numbers say when put together. The problem is not buying the wrong one — it is expecting one of them to do the job of all three.
Three words that are often heard together, and almost always confused with one another: management software (ERP), CRM, business intelligence. Each does something different, and understanding the difference avoids buying the wrong tool — or expecting from the right tool something it cannot give.
What each one does
Management software (ERP) keeps operations in order: invoices, stock, orders, accounting. It answers the question “what is happening in the company today”.
The CRM keeps customer relationships in order: who they are, what they bought, what you promised them, when to call them back. It answers the question “where does each individual customer stand”.
Business intelligence takes the data that the ERP and the CRM have already collected and turns it into an overall picture: how much you really earn per customer, which product is declining, where margin is breaking. It answers the question “what do all these numbers say when put together”.
The problem is not the wrong tool
The typical problem of a small business is not having the wrong tool. It is expecting just one of these three to do the job of all three.
A very well kept ERP without a CRM leaves you with excellent invoices and forgotten customers. A CRM full of contacts but without a link to the real numbers leaves you with plenty of relationships and no idea which ones are profitable.
You do not need to buy all three together, and you do not even need the most expensive of the three. You need to know which problem you are really trying to solve, before choosing the tool.
A question for anyone running a small business: if you had to say today how much you really earn from your most important customer, could you answer — and with which of the three tools did you find out?