IT Solutions for Business

What are CRM systems? A comparison with ERP, PLM, WMS

Author

Beata Miętka Quality Assurance

5 min read 2024-04-03

Contemporary enterprises face challenges related to resource management, processes, and customer relationships. To effectively address these, business owners seek advanced information systems.

The most popular management systems:

CRM (Customer Relationship Management),
PLM (Product Lifecycle Management),
ERP (Enterprise Resource Planning),
WMS (Warehouse Management System).

The evolution of CRM systems has been significant over the years, transforming from basic customer databases to comprehensive CRM platforms that integrate various aspects of business operations. Today, CRM software is at the heart of customer relationship strategies, offering a wide range of CRM solutions tailored to meet the diverse needs of businesses.

These advancements in CRM tools have made it easier for companies to manage customer data, improve communication, and enhance overall customer satisfaction, making CRM an integral part of managing customer relationships and improving business processes.

Enterprises often make the decision to purchase a system based on recommendations or popularity, rather than actual needs. For example - a company chooses a CRM system, assuming it will be the perfect solution for all customer service problems, only to find out that most of the CRM software’s functions are not used daily.

Below you'll find a comparison of these four systems. I’ve analyzed their functions, applications, and benefits for enterprises. Delving into these topics provides a complete picture of how systems impact resource management, processes, and customer relationships.

Comparison of management systems: Customer Relationship Management (CRM), ERP, PLM, WMS

1. ERP (Enterprise Resource Planning)

The first systems of this type appeared in the 1960s - although they were not yet named as such. The term ERP emerged in the 1990s when comprehensive information solutions, covering key process management, began to develop.

Main ERP functions:

Financial management
Supply chain management
Production management
Human resources management
Warehouse economy management
Fixed assets management
Analysis

Application of ERP system

ERP systems can be used in any industry; in enterprises where there is a need to integrate management systems for all key business processes. These systems are most often implemented in manufacturing, logistics, service, and commercial enterprises.

Benefits of ERP system:

Increased operational efficiency through optimization and integration of processes into one system,
Support for strategic decisions through access to accumulated data and reports,
Improved financial control thanks to the ability to control and monitor enterprise finances, budgeting, and financial data analysis and reporting,
Optimization of human resources management,
Improved customer relations due to the possibility of integration with the CRM system, which allows for better management of customer relationships and understanding their needs, handling inquiries, or complaints.

2. CRM (Customer Relationship Management)

The system evolved in the 1990s as a response to the growing demand of enterprises for managing customer relationships. At that time, they focused on collecting customer contact data. Over time, CRM systems have become more complex, offering functionalities supporting customer relationship management.

Main CRM functions:

Contact management
Handling inquiries and complaints
Marketing campaign management
Sales process automation, including sales force automation to make selling more efficient and prompt sellers with recommended next-best actions.
Data analysis and reporting

Application of CRM software

CRM systems can be used in enterprises from various sectors aiming to improve customer service quality and better understand their needs. These systems are most commonly implemented in service companies, e-commerce, or retail trade. They are particularly beneficial for sales teams and the sales team in understanding customer needs and improving sales processes.

Benefits of CRM system:

Improved customer service quality through better management of customer relationships and faster, more effective handling of inquiries or complaints, leading to increased customer satisfaction.
Increased sales through the automation of sales tasks and identifying potential customers, fostering customer loyalty by building strong relationships.
Transparent customer data analysis enabling a better understanding of the market and identifying trends, while enhancing customer interactions by personalizing interactions and creating a 360-degree view of the customer.
Optimal time and resource management through process automation and more effective customer data management.
CRM systems provide cross-functional benefits, empowering customer service teams, marketing teams, and sales and marketing teams to collaborate more effectively and deliver a unified customer experience.

3. PLM (Product Lifecycle Management)

The first systems of this type began to emerge in the 1990s when there was a demand for a comprehensive approach to managing the product lifecycle, starting from design, through production, to maintenance, and market withdrawal.

Main PLM functions:

Document management,
Version change control,
Project management,
Technical data management,
Supplier relationship management.

Application of PLM software

PLM systems are mainly used in enterprises involved in high-complexity production with long life cycles or complex design processes. These systems are most often implemented in manufacturing, automotive, aviation, or electronics companies, as well as in industries where there is a need for comprehensive product lifecycle management.

Benefits of PLM system:

Increased efficiency of design processes through better organisation of processes, increased precision and quality of the project, or shorter time to market Increased quality control - by managing documentation, changes, and product versions which affects the maintenance of high product quality
Shortened time to market through optimization of design processes, scheduling, and better collaboration between teams
Optimal resource management by managing projects and product data which translates into more efficient use of resources
Increased competitiveness through efficient management of the product lifecycle, allowing the enterprise to respond more quickly to customer needs or adapt to market trends

4. WMS (Warehouse Management System)

These systems also began to develop in the 1990s as a response to the need for better management of processes in warehouses and distribution centers.

Main WMS functions:

Warehouse space management
Management of goods receipt and dispatch
Order fulfillment Inventory tracking
Optimization of logistical processes

Application of WMS system

WMS systems are mainly used in enterprises with warehouses or distribution centers, as well as trading companies, logistics and distribution businesses, or e-commerce.

Benefits of WMS system:

Increased operational efficiency through the optimization of warehouse processes,
Inventory management through better control over inventory levels,
Shorter order fulfiment time thanks to automation and optimization of the order fulfilment process,
Efficient use of warehouse space thanks to optimal product placement in warehouses,
Reduction of operational costs through control over warehouse processes which affects the reduction of costs associated with storing goods and inventory management,
Improved customer service quality by shortening order fulfilment time

Summary

The above presents four types of systems supporting enterprise management. The decision regarding the choice of the right system depends on many factors, including the specifics of the enterprise's activities and the goals the company aims to achieve.

Often after such an analysis, a dedicated system turns out to be the best solution for the enterprise, which can be more tailored to specific requirements.

It's also worth noting that the enterprise may not fully use all the functionalities of a ready-made system, so it's crucial to match the system to the needs of the enterprise. It's important that the choice falls on a system that will effectively respond to the needs of the enterprise and contribute to the success and development of the company.

I encourage you to read the next article related to this topic: The 6 most important criteria for choosing a CRM system provider

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Beata Miętka

Quality Assurance

Beata is a proficient QA expert with a strong background in physics. Her keen eye for detail and dedication to testing excellence, combined with her diverse interests, make her an invaluable asset in ensuring product quality.

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Having a simple bespoke system can eliminate a lot of integration husstle and be more cost effective long term.

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