Is CRM forecasting really better than ERP forecast?
CRM forecasting and Reporting play an important role in any business. In fact, many companies still rely largely on the ERP forecasting tool to run reporting.
We should clarify, however, that tools like Quickbooks and Xero are not even qualified as management systems.
In terms of managing the business, ERP systems are paramount and enable a great deal of control over the trends of your business. This is true when analyzing yesterday’s perspective: what happened already? But what’s the difference between ERP forecasting and CRM forecasting?
Business management and finance are done via invoice tracking, sometimes it may also include order tracking. It is imperative that entrepreneurs and business managers carefully monitor their business trends. The cost and revenue trends provide information about the profitability of the business and, by inference, how profitable it will be in the future -assuming the trends hold-.
What ERP forecasting fails to mention are the reasons behind revenue trends. An ERP system describes the reasons behind the cost trends, such as resource utilisation and the correlation between production and global cost, either direct or indirect. This is why CRM forecasting is more effective for business navigation.
Consequently, ERPs forecasting have a completely different purpose in terms of information development than CRMs. It is also possible for them to share the same base of data, but what is significant in the ERP sometimes does not matter from a CRM reporting perspective, and even more importantly, what is significant in the CRM rarely applies to the ERP. Both logics and purposes are complementary, but they are not the same. CRM reporting can prove to be superior.
Via business management software, such as ERP forecasting, companies track the output and how it was achieved by applying available resources. Then, eventually, it says who received it.
The CRM tracks the recipients, people who receive the production output, how they interact with the company, and eventually what they receive. More importantly, it examines why value exchange occurs, rather than the “what”. In most cases, the output is not tracked in terms of how the resources were used to make it. This is one approach that starts showing how CRM reporting exceeds reporting on ERP.
As a result, ERP forecasting is not sufficient for reporting purposes and does not provide any useful information for forecasting purposes.
However, if your company’s forecast is only based on past performance and its projections for the future, this may be acceptable.
It should be clarified that the CRM only records future opportunities in B2B business models, especially when it is used in long and complex sales processes. If the sales process is fast or the clients are consumers, the CRM can mainly assist with past trends analysis: tracking moods, feelings, and behaviors to improve the sales process.
Even if defining what’s B2B and B2C is not enough to consider the CRM perspective, it’s still a useful parameter to consider the business model’s requirements and how the CRM supports them.
CRM Improves Forecasting
In various ways CRM can be more effective than ERP when it comes to business perspectives and forecasts, this truly depends on the organisation’s needs, style, and business model. As a result, the decision to adopt CRM has become a largely mainstream practice in companies all over the world. Even more when the effort of looking after the business trends requires real-time, proactive control. Here, CRM reporting really makes the difference!
There is no longer a question of whether or not to implement a CRM, but rather what tool would be most appropriate for your business. Selecting the tool is another type of CRM challenge then you may consider Leads Generation to boost your business a step further.