Forecasting and Reporting plays an important role in any business. In fact, many companies instead of using CRM forecasting and reporting they still rely largely on the ERP tool (or just simpler management software) to run reporting and forecasting. 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 fine and allow a great deal of control over the directions in which the businesses are going. This is especially true when viewed from yesterday’s perspective. But what’s the difference between reporting based on ERP data and CRM reporting features?
Business management and finance is done via invoices tracking, sometimes it may also include orders 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 fails to mention are the reasons behind revenue trends. An ERP system describes the reasons behind costs trend, such as resource utilisation and correlation between production and global cost, either direct or indirect. This is why CRM forecasting is more effective for business navigation.
Consequently, ERPs 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 on the ERP sometimes does not matter from a CRM reporting perspective, and even more importantly, what is significant on 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, companies track the output and how it was achieved by applying available resources. Then, eventually, it says who received it.
ERP and CRM forecasting
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 start showing how CRM reporting exceed reporting on ERP.
As a result, ERP 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 BtoB 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 behaviours 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.
Ultimately, CRM can assist Reporting and Forecasting
in various ways depending 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 looking after the business trends require a real-time, pro-active control, here CRM reporting really helps! 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.