ARTICLE TABLE OF CONTENTS
This is the complete guide to ERP vs. CRM vs. SRM vs. SCM vs. PLM.
- What each one means: ERP, CRM, SRM, SCM, and PLM
- The differences between ERP, CRM, SRM, SCM, and PLM
- Lots more
So if you want to understand this essential of business information technology, then this article is for you.
Let’s get started!
Understand ERP vs. CRM vs. SRM vs. SCM vs. PLM
The business community has a serious love affair with acronyms.
Sometimes, it’s virtually impossible to wade through the industry speak to decide if a business needs to focus on ERP vs. CRM or CRM vs. SCM, SRM vs. PLM, or any other configuration of systems for that matter.
One thing is for sure, if you spend enough time researching business software, you’ll need some R&R (Rest & Recuperation—military).
Whether you’re an IT professional, barebones startup, a small or midsize business, or a global corporation, it’s incredibly crucial that you can parse through all this industry speak in order to make the most informed decisions for your business and its customers.
Today, we’re going to take a deep dive into the world of business applications.
By the time you’ve finished with this crash course, you’ll have a much clearer idea of what they are respectively, and how these different systems work:
- ERP (Enterprise Resource Planning)
- SCM (Supply Chain Management)
- PLM (Product Lifecycle Management)
- CRM (Customer Relationship Management)
- SRM (Supplier Relationship Management)
Most importantly, this information will give you a clearer idea into how these different systems interact together, and which systems will serve a critical role in your company reaching the next level.
Let’s kick things off with SCM:
SCM (Supply Chain Management)
SCM or supply chain management is the process of managing the flow of goods from the sourcing of raw materials through to the delivery of merchandise to the customer.
People often equate supply chain management with logistics. While logistics plays a significant role in supply chain management, it’s only a single component of SCM.
SCM software provides tools for all parties responsible for a product or service reaching the market, including parts suppliers, distributors, manufacturers, retailers, and logistics coordinators.
The idea is that by streamlining production, logistics, and distribution, companies are able to reduce costs while improving the consumer experience.
Plus, 70% of businesses consider their supply chain operations to be quite complex, so an agile and full-featured SCM is the easiest way to stay on top of your business.
Different SCM platforms can vary widely in terms of features, but most software provides users with standard features for:
- Demand forecasting
- Inventory management
- Supplier sourcing
- Warehouse management.
The concept of the supply chain is as old as business itself, yet it’s an area that companies are just now beginning to key in on.
Businesses that embrace supply chain management may be able to get a leg up on the competition by leveraging the data and analysis that SCM software can provide.
Understanding the Best SCM For Your Business
One thing you’ll quickly notice when you’re evaluating different SCMs is that different products may provide completely different sets of features so not every SCM will be ideal for your business.
Depending on where your company fits within the supply chain, you’ll want to find an SCM that caters to your niche.
Manufacturers need software that allows them to track the flow of goods from their suppliers to their customers.
Features that enable collaboration, as well as features for strategic planning and demand forecasting, will be critical for manufacturers.
Distributors are in the middle, and they serve as the bridge between manufacturers and customers.
For this type of business, features that allow the company to track products and contract terms for any of their suppliers and customers. They will also need inventory and logistical functions to streamline the process of getting products into the hands of customers.
Retailers are one of the final pieces of the puzzle, and they connect customers to products.
In the sense of traditional retailers with physical locations, an SCM isn’t necessary. Instead, retail management and POS (Point of Sale) software will be more critical for the business.
But, for e-commerce retailers, an SCM will prove indispensable. Retailers will want to have many of the same features that distributors rely on.
Ecommerce retailers will also need warehouse and transportation management solutions, as well as inventory management solutions. Larger retailers will also want to look for strategic planning and forecasting features, too.
Third-party logistics businesses are the 4th type of SCM customer. These companies supply products or components for another business, and they need to manage customer orders, warehousing, and transportation for a variety of different customers.
Logistics businesses will want their SCM to provide robust customer profiling, lot tracking, supply management, and fulfillment features.
How Does an SCM Deliver Value to an Organization?
For the companies that need it, supply chain management can help them streamline and improve several aspects of their business.
Over 75% of companies with a highly functional supply chain grow at a rate higher than the industry average, so SCM is worth looking into.
SCM software is designed to increase efficiency while reducing costs. This software can also provide intelligence-based features like trend analysis and forecasting to help management make smarter decisions.
Over 30% of businesses find that their most significant supply chain challenges are visibility through the product cycle and inventory management, which are two fine examples of areas where SCM software can help streamline operations.
The primary function of SCM software is to make your operations more efficient. Tasks like inventory receiving, storage, transportation, and distribution can all be dramatically improved with the help of a capable SCM.
Through process automation, users need to spend less time on menial tasks, enabling them to focus on more critical aspects of the business.
With increased efficiency comes a reduction in costs, too.
Some platforms even offer features that identify potential cost savings, such as the ability to procure commodities at a lower price, combine freight charges, or reduce inventory to improve storage capacity.
Finally, the intelligent features that are common with most high-level SCMs are another way that supply chain management can deliver additional value to a company. These features are like an extra set of eyes to analyze data and trends that could have meaningful implications for the future of the business:
Shown below is the forecast for the global revenue of the SCM (Supply Chain Management) software market:
It is expected that by the year 2023, the SCM software market would grow up to 8,650 million U.S. dollars.
SCM as a Career
If you’re wondering whether SCM (Supply Chain Management) as a profession might be a good fit for you, then you have come to the right place!
Supply chain managers are an integral part of small and large companies, and the career path you can take with a degree in SCM is full of opportunities.
Any business that sells goods or services needs a supply chain manager. There are tons of available jobs in the field.
Find out here whether a SCM career suits you: supply chain management as a profession.
CRM (Customer Relationship Management)
CRM, which is short for customer relationship management, allows businesses to manage each aspect of their relationship with customers and prospective customers.
The purpose of a CRM is to help a company improve its relations with customers through each step of the customer journey. In doing so, a quality CRM can help improve relationships, simplify processes for your sales staff, and make the sales department more profitable.
CRM adoption is growing, and today, over 60% of new businesses adopt a CRM within their first five years.
The concept of customer relationship management is as old as sales itself, but when we refer to CRM in the 21st century, we’re typically referring to the software tools that provide a business with features to manage contacts, sales, prospects, productivity, and much more.
Not only can a CRM help you develop relationships with customers and prospects, but it can also be used to manage relationships with service users, members of the sales team, and your suppliers.
A dedicated CRM will provide tools for each step of the customer journey, from the moment a prospective customer becomes aware of your product or service through the entirety of your relationship.
The Importance of Data Management
When it comes to sales, one of the most significant issues in the industry is a lack of data organization.
A company with a robust sales team that’s hitting the road or the phones every day is going to generate a ton of data. In the past, that data existed as jottings in a notebook, emails, or in the minds of your sales staff. Under this system, it’s easy to imagine how simple it is to lose notes, forget critical things about your prospect, or forget to follow up on meetings or interactions.
Perhaps more importantly, it’s virtually impossible for your staff to prioritize their leads. More often than not, money is being left on the table. These issues are further compounded when a member of the sales team moves on, as they tend to take their notes, client data, and relationships out the door with them, leaving your team with no idea where the prospect is in the pipeline, or how to best serve their needs.
Beyond the sales department, other customer-facing departments can suffer, too.
These days, customers and prospects use a wide variety of methods to contact your company, and it’s easier than ever for that information to get lost in the hustle of running your company.
The result is a response that’s unsatisfactory, and a customer or prospect wondering if you truly care about winning their business or not.
Considering that 1 in 3 customers will stop doing business with you after a single negative experience, it’s easy to understand the importance of service.
Even with sales teams that are especially vigilant when it comes to customer data and interactions, it’s still difficult to organize all the data you’ve garnered in a way that makes sense for management, the sales staff, and other employees in supporting roles.
Data is the lifeblood of business, but unless it’s organized in a way that provides meaningful insight to your team, it isn’t useful.
The Fundamentals of Customer Relationship Management
This is where CRM comes into the mix.
A quality CRM solution will help your company locate new business and nurture prospects through the sales cycle. The CRM accomplishes this by providing detailed organization of your customer and prospect information in a central location that makes it easy for every member of your team to access the information they need in real-time.
At its core, a CRM system will collect information about your customers and prospects from several different sources, such as the customer’s website, social media, contact info, and much more.
An exceptionally robust CRM may even pull recent news and info about a company.
This core information about a prospect or customer exists in one place that’s easy to access and update, and it gives your sales team a much clearer overview of the state of a relationship, as well as any opportunities there are to grow the relationship.
As your team interacts with a prospect or client, the interaction can easily be detailed, and the notes from that interaction are centrally available to the whole team.
As more CRM developers focus on mobile, it’s becoming easier for the sales team to log new information in real-time from their phone, tablet, or laptop.
CRM software also integrates with other business tools that are vital to sales and marketing teams, such as accounts payable and receivable features, surveys, document signing, and much more.
The best CRM companies are continually building new integrations with popular third-party software all the time.
What Kind of Business Needs a CRM?
CRM software is effective for many different kinds of businesses, but there are two in particular that seem to benefit the most by incorporating CRM into their sales cycles.
Of course, any business that wants to maximize their customer relationships can benefit from a CRM, but companies that engage in B2B sales, as well as B2C companies that deal in considered purchases, like a jeweler, car dealership, or landscaping service.
Typically, B2B sales involve a long sales cycle, and careful tracking of leads through the sales funnel before finally arriving at the sale. These businesses usually offer a high level of post-sales service, so CRM is equally essential for these businesses after the transaction is complete. The same can be said of companies that deal directly with consumers for larger items that typically require quite a bit of research, though, and shopping around.
Businesses like a jeweler or car dealership immediately come to mind as examples of B2C companies that can benefit immensely from customer relationship management software.
What if my Business isn’t in B2B or B2C Sales?
If your business doesn’t fall into one of these two categories, that doesn’t necessarily mean that a CRM isn’t a great tool for your business.
For example, the Oracle NetSuite CRM alone caters to various businesses from different industries as shown in the chart below:
There are plenty of other firms that credit their CRM software by helping them to move the needle forward and close more deals.
Businesses that keep a centralized document with information on all their leads and customers will benefit from a CRM.
In companies where customer service plays a significant role, they can also streamline their operations with a CRM, as the software makes communication easier.
Also, management teams that are having a hard time understanding the productivity, goals, and needs of their sales team will be in a better position to support their sales department with the help of a CRM.
How Does a CRM Deliver Value to an Organization?
Customer relationship management software is usually a reasonably substantial expense for a business, which makes it even more critical for decision-makers to be able to track the value that the software is bringing to the organization.
Here are some of the most vital ways that CRMs deliver value to their users:
First, adding a CRM to your sales repertoire is a clear way to increase your bottom line.
According to Salesforce, CRM applications can increase sales and lead conversions by up to 30% and revenue by up to 25%. According to the same survey, a CRM can also improve customer satisfaction by up to 35%, and happier customers translate to a more comfortable bottom line.
A dedicated CRM also makes it much easier for your team to accurately categorize leads, which makes it easier for the sales team to identify their strongest and most lucrative opportunities.
Proper categorization also makes it easier for your marketing team to coordinate efforts with sales, making it easier for both arms of the business to focus on the right prospects.
A CRM also makes it easier for businesses to receive more referrals from their existing customers.
Through a CRM, companies are able to develop a more well-rounded understanding of each customer, which leads to better relationships with each customer.
Better relationships increase the chance of repeat business and repeat customers spend more than new customers, on average.
Customer service can also be improved with the help of a CRM. In the 21st century, customers are more demanding than ever, and they expect to communicate with businesses whenever they need to, based on their terms.
CRM software makes it easier for your customer service team to understand the needs of the customer and their relationship with you so they can provide exemplary service regardless of your customer’s concerns.
PLM (Product Lifecycle Management)
Product lifecycle management software is a critical tool that many companies use to help them produce an innovative and diverse range of products that launch successfully within the global marketplace.
This technology makes it possible to link each aspect of production, from the moment a product concept is developed until it’s successful launch in stores.
PLM systems are used across a variety of verticals, and everyone from designers to buyers to manufacturers can benefit from its implementation.
Benefits and Functions of PLM
The overarching concept behind a PLM system is that it will help your company manage the challenges of product development.
Consumers are more demanding than ever, and PLM software will help you bring top-quality products to market quickly and efficiently.
Through a PLM system, each step of product development can be managed from one centralized system. This makes it easier to communicate with your team, identify hiccups in your processes, and improve the time it takes you to get a product to market.
Without a PLM, companies are forced to make sense of a file storage mess, where information exists across a variety of programs and formats.
None of the data has a single source of truth, and it’s virtually impossible to make quick and effective decisions for the business.
This situation becomes more complicated when you add other partners into the mix. It’s difficult enough to keep your team’s work organized and easy to access, and it becomes all the more difficult when you add new collaborators into the mix.
Some of the significant benefits behind adopting a PLM include:
- Lowered production time
- Cheaper prototyping
- Higher quote and timeline accuracy
- Improved profit margins
- Reduced waste
PLM software has several functions that can help companies streamline product development and launch.
The PLM (Product Lifecycle Management) and Engineering software market is expected to have a steady growth over the next few years and by the year 2023, it is forecasted that this market would have a global revenue of 20,512 million U.S. dollars.
Perhaps the most important is that PLM provides a record-keeping system where everything is centralized, and information can easily be shared between departments.
PLM software also allows your company to optimize existing processes and systems to drive product development.
Value and revenues are maximized by improving efficiency and eliminating redundancies.
How Does a PLM Deliver Value to an Organization?
Future innovation is born from strong product development. But, new products take lots of time, labor, and investment to reach fruition.
Without a PLM to help oversee every facet of new product creation, you’ll almost always run into cost overruns and missed deadlines.
With a PLM, the processes related to product development become much more transparent and efficient.
Everyone with a vested interest in the new product will have one centralized system to work from, where all data is current and accurate. Regardless of your position in the supply chain, a PLM makes it easy for you to collaborate seamlessly.
Innovation is quicker, product development cycles are shorter, and companies can get new products to market more efficiently, saving time and money in the process.
ERP (Enterprise Resource Planning)
An ERP system is a heavy-duty software suite that assists management and employees alike in making decisions and operating the business.
Enterprise Resource Planning software touches on HR, accounting, manufacturing, distribution, sales, marketing, order management, and so much more.
It’s easier to understand ERP when you think about it in the context of the other systems we’ve already discussed.
While SCM and CRM software focuses on specific functions of a business, an ERP provides tools that touch on every aspect of the company and how it functions.
Most ERPs offer some or all of the functionality of SCM and CRM software, in addition to the features that are unique to ERPs.
Benefits and Functions of an ERP
One of the main benefits of an ERP system is that these systems tie in a handful of different processes so data can flow freely through each process.
ERPs collect data from multiple sources, eliminate duplications, and improve data integrity by providing employees and decision-makers with clean and accurate data.
While each ERP system is different, they usually share plenty of commonalities.
Typical functions of an ERP include planning for purchasing, manufacturing, and delivery, shipping and inventory management, accounting, supply chain management, marketing and sales, and customer relationship management.
The Rise of the Postmodern ERP
In years passed, an ERP was typically a single software suite that was created and sold by a single vendor.
Today, the postmodern approach to ERP has become more popular, with different software vendors integrating their products together to form a full-featured ERP.
Postmodern ERPs have become increasingly popular because the piecemeal approach allows software manufacturers to focus all of their efforts on developing software that serves one specific function exceptionally well.
Then, the different pieces of software can be integrated together to create an ERP with all the features a business needs. Creating an ERP in this manner can help reduce initial costs of ownership, and ensure that each function of the software works incredibly well.
In fact, the global ERP (Enterprise Resource Planning) software market is also expected to have a steady growth for the next few years as shown in the graph below:
By the year 2023, the ERP software market is forecasted to have a revenue of 96.74 billion U.S. dollars.
The Fundamentals of Enterprise Resource Planning
An ERP system begins with a schema with a common database.
By using a single, defined data structure, developers can ensure that all of the data the software uses is normalized and based on common user experience and data definition.
From there, the software is interconnected with the workflows that drive business processes across each department within the company to connect systems, departments, and the employees who use them.
How Companies Use ERP
Let’s use a smartphone manufacturer as an example. The company builds smartphones from a variety of different components and parts that it purchases through multiple suppliers.
With an ERP system, the manufacturer can track the products development, manufacture, and distribution from a single hub.
Consider a company that builds smartphones by procuring parts and components from multiple suppliers. It could use an ERP system to track each component they purchase using uniform and clean data that is connected to the workflows of the company.
A component, such as a phone’s processor, can be identified uniformly by a variety of different attributes, such as it’s part name, material, manufacturer, lot number, supplier part number, serial number, cost, and so much more.
ERP allows this business to collect, analyze, and distribute all of this critical information to the individual teams and employees who need this information to fulfill their job.
The Importance of Data
One of the most essential aspects of ERP is that it ensures uniformity between attributes and fields to ensure that the company can take an “apples to apples” approach to using their data to gain meaningful insight.
To revert back to our example of the smartphone manufacturer from earlier, let’s say that the company has some issues with data uniformity.
Perhaps one set of data refers to the processor component of the phone as “A13 processor,” another set of data refers to it as a “processor,” and a third set of data refers to it as a “CPU chip.” It would be virtually impossible for the company to gain meaningful insight from that data since it wouldn’t all be aggregated together.
How can a company track their annual spending, monitor their supplier relationships, or negotiate for better prices or terms if the data they’re using to gain insight is incomplete or incorrect?
The most critical principle of an ERP is the centralized data collection for distribution throughout the entire organization.
An ERP can eliminate all of the chaotic and disconnected data of an organization and replace it with complete, accurate, and current data.
Each member of the organization, from the president down to entry-level employees will be able to make use of data derived from a single central database for all of their work.
By housing data in a secure, centralized location, every employee can work with confidence, knowing that the data they’re working with is correct.
How Does an ERP Deliver Value to an Organization?
Enterprise Resource Planning has had a massive impact on the way many leading companies do business.
While investing in an ERP involves significant cost, they also offer businesses with many opportunities to save money and reduce costs, effectively paying for themselves over time.
Some of the most notable benefits of an ERP include:
- More accurate business insights thanks to real-time, accurate reporting
- Streamlined processes for lower operational costs
- Encourages collaboration within individual departments, and throughout the company
- Common user experience for every employee translates to increased efficiency
- Improved data integrity
- Eliminates mistakes caused by poor data integrity
SRM (Supplier Relationship Management)
Supplier relationship management, or SRM, is all about assessing how each of your suppliers are contributing to the success of your business.
The main purpose behind using SRM is to improve the relationship between you and your suppliers, much like CRM strives to foster better relationships with your customers.
With SRM software, you’ll be able to track which suppliers you’re working with, organize your transactions, and ensure that those transactions are happening on time.
A lot of the time, business owners pair SRM software with a larger ERP or CRM system since they tend to work in conjunction with each other.
The Importance of Collaboration and Data
One of the most important benefits of SRM is how it strengthens the relationship between a buyer and a supplier.
Through the software, both business owners and suppliers can keep track of inventory, and see what they need to restock.
Web-based SRM applications allow suppliers to work in real-time, and monitor a company’s stock levels whenever they want.
This kind of collaboration usually has a positive impact on the relationship between vendors and buyers.
While it might not happen at first, SRM can help create relationships with trusted suppliers that go on to last for years.
SRM gives suppliers more access and control, and allows business owners to take a more hands-off approach, especially if it’s already an established relationship.
There are also competitive bidding features on SRM software that allow buyers to submit a request to multiple vendors, and pick the one that will provide the most value to their company.
Buyers can usually compare vendors based on their past performance, price, or other criteria that they might deem important.
For instance, a small business looking to establish a long-term relationship with a supplier might be interested in looking at the vendor’s past performance with SRM software.
A supplier who has a reliable track record of good communication and delivering stock on time is likely to be a lot more valuable to the company than one who doesn’t. This feature is especially important since it helps you view the “big picture.”
Many businesses tend to only factor in price when they consider a supplier, but SRM software shows you that there’s a lot more to think about.
The Pros and Cons of SRM
When it comes to identifying the pros and cons of SRM software, there’s a lot to consider.
It has been already mentioned that SRM has the potential to reduce your business costs, and help you identify areas for improvement.
Once you’ve identified these red flags, you can then use the software to help you get instant feedback from your suppliers.
With that said, there are a few potential cons to consider as well. Like any kind of software you choose, implementing SRM will take time and commitment.
Some of your staff might have to learn how to navigate the new system as well as communicate with suppliers in a whole new way.
Even if using SRM software requires a little bit of trial-and-error, most businesses that deal with a lot of suppliers find that the long-term benefits outweigh the short-term cons.
How Does a SRM Deliver Value to an Organization?
Companies that work with multiple suppliers would probably find an SRM to be extremely useful.
Rather than trying to keep track of all your transactions through emails or even paper documents, the SRM compiles all the data for you.
You can even program your SRM to give you notifications when it’s time to restock or pay an invoice.
More than just an organization tool, SRM software can also give businesses a better idea of which suppliers are providing the most value to their company.
If you think it’s time to reevaluate your vendors, using an SRM can help you determine which suppliers are vital to your company’s success (and which ones aren’t).
Like their name suggests, SRMs can do a lot to improve the relationship between you and your suppliers.
An SRM will allow you to share forecasts with trusted suppliers if you want as well as address any potential issues you see in the future.
Sometimes, you can even use the software to stop potential problems before they become real issues.
Many business owners also choose to use SRMs to automate repetitive tasks and streamline the supply chain. This is similar to SCM, but it works on a smaller scale.
Some of the vital benefits you can expect to see from an SRM include:
- Streamlining the buying process with your suppliers
- Accelerating processing and procurement
- Accessing more information about supplier performance
- Shrinking procurement costs
- Automating some operational tasks to increase your overall efficiency (and potentially avoid rogue buying)
- Gaining a consumer-grade shopping interface and driving user adoption
How These Systems Work Together
For larger businesses, especially those involved in every step of the product life cycle, it may be necessary to employ two, three, four, or all five of the systems we’re discussing.
Fortunately, nearly all of the products you may end up considering play well together.
Through product integrations, it’s usually possible to link different systems together. Doing so will allow you to pull records and information from one platform into another, leveraging the functionality of each to provide more complete tools to your team.
If your team is already using a CRM, ERP, PLM, SRM or SCM platform, or if you think your organization may end up adding additional tools to your arsenal in the future, product integrations will be essential.
If you’re leading the product search for your company, it’s critical that the tools you choose can all interface with one another to provide optimal power and flexibility as you grow.
Understanding the Differences Between Each System
While each of the systems we’ve discussed can play a vital role in a business, they aren’t always all necessary.
Most companies find that they can benefit from one or two of these software systems, but maybe not all of them.
Here, we’ll narrow down what you should focus on if you aren’t sure which systems are going to have a positive impact on your business.
ERP vs. CRM: Difference Between ERP and CRM
When it comes to ERP vs. CRM, both systems share a good bit of commonality, so it’s common for businesses to wonder which one is going to deliver the most bang for the buck. With these two systems, the easiest way to identify whether you need one or the other or both is to consider the features you need the most.
If you need to focus on bringing in more revenue, closing more deals, and improving interactions between your sales staff and prospective customers, then a CRM is going to be an especially useful tool for your business.
But, since the sole focus of a CRM is improving customer relationships and generating revenue, it won’t help you in other areas.
Instead of focusing solely on optimizing your sales and marketing processes, ERP focuses on every aspect of the business, from HR to accounting to procurement to sales and marketing and everything in between.
The ERP provides a suite of features for practically every department within the company, and each team can work with the features relevant to them to improve performance and efficiency.
Is an ERP a Better Solution?
On paper, it sounds like an ERP is the best move for everyone. Why focus on a single department when you can improve all of them? The adage “jack of all trades, master of none” comes to mind here.
While a quality ERP is able to streamline and improve so many different processes, including the function of the sales and marketing departments, it doesn’t offer the level of depth and features for sales that a dedicated CRM would.
In short, if you’re looking for a software suite that can improve and streamline virtually every department within the company, an ERP is a wise choice. Meanwhile, businesses that are most concerned with growing their bottom line through sales may choose to instead focus on a CRM.
SCM vs. PLM: Difference Between SCM and PLM
The two systems that have the most overlap are SCM and PLM software. Both systems are designed to make it easier for businesses to develop new products and send them to market. So, what makes these systems different?
With SCM, the information and tools in the system pertain to manufacturing.
An SCM tool will help you manage every aspect of the manufacturing process from a component level up through the finished product, and it will provide ways for the company to interface with its suppliers abroad.
Meanwhile, the tools available in a PLM system are geared mostly towards the in-house processes required in product development, including design and development.
It’s becoming clear that successful software companies will begin to integrate PLM functionality into their SCM systems, which will provide a complete view of your development pipeline from ideas to execution to market.
ERP vs. SCM: Difference Between ERP and SCM
In the case of ERP vs. SCM, these applications share a similar relationship to ERP and CRM.
Instead of focusing exclusively on sales and marketing, as a CRM does, an SCM focuses solely on managing the supply chain from product development through to final delivery.
An ERP will be able to provide the business with supply chain management features, and many companies find that these SCM features are more than capable of doing what they need to be done.
If a business is in need of supply chain management software, they should evaluate whether or not they can get the SCM features they need from an ERP. In this case, you’ll be able to address your supply chain needs while also availing yourself to a world of other ERP features.
For some manufacturing businesses, it just won’t make sense to invest in a full ERP if SCM features are the only ones you’ll be making use of. In these cases, you’ll probably be best served by a best of breed SCM.
While an ERP might serve the needs of a typical SCM customer, it doesn’t work both ways. In other words, if you need an ERP solution, SCM software will only address one piece of the puzzle for you, leaving you scrambling for the ERP features you need.
CRM vs. SCM: Difference Between CRM and SCM
The differences between this software are easier to parse because they deal with entirely different aspects of the business.
While a CRM focuses on customer-facing tasks like sales and marketing, SCM focuses on managing suppliers and getting products to market.
To use a car dealership as an example, supply chain personnel will focus their efforts on procuring raw materials, manufacturing products, and delivering products to the dealership. These staff members will rely on SCM to get the job done.
Meanwhile, the service department and sales staff at the dealership will rely on CRM software to identify and build relationships with prospects and turn them into customers.
These two software may not overlap very much, but both may be critical to your business’ success. If your company manufactures physical products for sale to either wholesalers or end-users, there’s a strong chance that both CRM and SCM will be valuable to your business.
But, if your business provides services or products that don’t require manufacturing, it’s likely that SCM software isn’t going to be necessary for your business.
SRM vs. CRM: Difference Between SRM and CRM
Most businesses use SRM in conjunction with CRM, and it’s because these softwares are closely related.
However, there is one major difference between the two: while SRM helps you manage the relationships between your suppliers, a CRM helps you communicate with your customers more effectively. Both types of software will help you keep track of your third-party interactions, but it’s different third parties.
However, you could also argue that while SRM software focuses more on collaboration, a CRM tries to analyze the data about your customer’s history with the company.
CRMs compile information about current and future customers whereas your SRM will try to streamline interactions with your suppliers.
Both services deal a lot with communication, so if you’re trying to figure out which one will be more useful to you, consider who you need to communicate with.
If you only have one or two suppliers but a lot of customers and sales staff to answer to, a CRM might be more useful.
If you struggle with managing all the interactions with your suppliers and organizing that data, a SRM will probably do your business a lot of good.
ERP vs. SRM: Difference Between SRM and ERP
It shouldn’t come as too much of a surprise that there is some overlap between ERP and SRM. While SRM functions as a place to store and organize all your interactions with suppliers, ERP focuses on increasing your business’ overall efficiency.
With an ERP system, you’ll likely be sharing and standardizing a lot of information with your team whereas SRM centers around sharing information with third-party vendors.
You could argue that, while they take different approaches, they both try to increase your business’ profits and cut costs.
By collaborating with suppliers and figuring out which vendors offer the most value to your company, SRM software could help you save a few bucks over time.
ERP definitely takes a more direct approach, and it encompasses a lot more features than SRM does. For this reason, you can’t substitute SRM for ERP.
SRM specializes in supplier interactions, and it’s not going to provide all the other benefits that ERP comes with.
SRM only gives you a few pieces of the puzzle, but if you’re looking for the rest, you’ll need to download ERP software.
SCM vs. SRM: Difference Between SCM and SRM
Many people consider SCM and SRM to go hand-in-hand since they deal with similar parts of the business.
As it has been already mentioned, SCM manages the supply chain of your business, and keeps things running smoothly. Since both software types deal with suppliers, it’s easy to confuse the two.
However, there are a few key differences.SCM primarily centers around making your supply chain and sourcing raw materials more efficient. As a result, there are a lot of different features on SCM software that you won’t find with SRM.
More than anything, SRM deals with micro-management of supplier relations and procurement activities.
The communication and collaboration tools that you won’t find with SCM are likely to be included with SRM.
Specifically, there are a few features on SRM software that allow for competitive bidding when you’re looking for the best supplier.
A lot of business owners choose to go with both software tools, but if you’re unsure whether or not you’ll need SRM, you always have the option to purchase SCM and see if it covers all your bases.