CRM vs. SCM: How are They Different?
In today’s competitive business landscape, you must use all the tools available to succeed. While there are many out there, CRM and SCM are unavoidable. Both systems deal with large amounts of data that can give you actionable insights. However, they are used in different cases since they deal with different kinds of data.
If you plan to invest in such tools, you’re in the right place! In this article, we will first look at the definitions of CRM and SCM and then see how the two are unlike each other. Finally, we will see how you can integrate the two for the smooth flow of operations.
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What is CRM?
CRM (short for Customer Relationship Management) systems help you engage your customers with personalized relationships. They collect and analyze data such as contact information, previous interactions, and completed purchases. Using this data, you can get an insight into your customers’ tastes. This will help you to plan and execute marketing strategies that they will find attractive.
Different verticals of your organization can benefit from CRM systems. Your marketing team can track their campaigns and get an insight into the effectiveness of each one. Your sales team can use data about past interactions to improve their communication with your customers. In addition, you can log customer complaints and feedback into the system, which will help your customer service representatives handle issues better.
The main goal of a CRM system is to help you manage your relationships with your customers, regardless of whether they are individuals or organizations.
What is SCM?
SCM (short for Supply Chain Management) systems help streamline your supply chain processes. They do this by offering you functions such as inventory management, product distribution and tracking, and supply and demand forecasting.
Like CRM, multiple departments in your organization can benefit from SCM software. For example, customer service representatives can use the tracking function to respond to customer queries about shipments. The inventory management feature can help your manufacturing department ensure you never run low on stocks. Even your accounting department can use data from SCM systems to budget and forecast for the future.
The principal objective of SCM systems is to ensure a smooth flow of production, right from raw materials to your customers’ homes.
Key Differences Between CRM and SCM
As you can probably already tell from the definitions, customer relationship management and supply chain management help an organization at different points in the product- and customer lifecycle. There are more differences between them – concerning revenue and goals – that we will look at below.
| Customer Relationship Management | Supply Chain Management |
|---|---|
| Manages customer relationships with the help of data and analytics features as well as communication tools. | Manages product and service inventory with the help of a data-driven approach that helps you track deliveries and forecast sales. |
| Generates revenue through new customers and by ensuring the closing of existing sales. | Streamlines and reduces costs by simplifying parts of the supply chain. |
| Drives new sales through targeted marketing and retains customers through personalized relationship management. | Improves existing sales processes by overcoming bottlenecks and speeding up delivery times with the help of automation. |
| Aims to ensure customers are satisfied with your organization’s products and services. | Aims to ensure that your products and services are available when required and delivered on time. |
Which One should You Choose?
It can be daunting to decide this, especially if you’re just starting. The short answer is – both. The differences between customer relationship management and supply chain management lead to each of them having unique benefits. You probably need both systems for the smooth functioning of your organization. That being said, how your business functions will have an effect on which of these systems are more important for you.
If your company has several customers and a long sales cycle, you should invest more in a CRM system. For instance, B2B transactions are often quite complex and customized. In these cases, a CRM system can help you track your client’s changing needs.
On the other hand, if your main concern is to manufacture and deliver products on time, an SCM is more important for you. For example, if your company makes parts for only one or two car manufacturers, you can probably manage without a CRM system. However, an SCM system will be indispensable to you.
Many organizations, however, require a mix of both. The integration of CRM and SCM systems can give you insights that will help you overtake your competitors. We will look at how these insights can benefit you in the next section.
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Benefits of Integrating CRM and SCM
1. It Helps You to Stay Up to Date with Your Customer’s Demands
By tracking buying patterns and franchise visits, your CRM can give you a detailed analysis of which products are most in demand. You can integrate this with your SCM system and supply more products to high-demand locations. This will ensure that you always meet your customers’ demands.
2. You will Always Have an Updated and Organized Database
Efficient CRM and SCM systems will let you track all kinds of data in real-time. Since your supply chain can affect customers (e.g. delivery delays) and vice versa (e.g. order cancellations), constantly having updated data will ensure that all parties involved are kept in the loop.
3. You can Make Predictions
With enough data, you can use a robust CRM system to analyze trends in purchasing and browsing behavior. By relaying this data to your SCM system, you can start to produce products and services that your customers may not yet know that they want!
We at iTrobes offer you customized and flexible customer management systems that will help you improve your workflow. Our experts also have a robust understanding of how crucial CRM and SCM are for each other. They will evaluate any systems that you might already have and make sure that they integrate seamlessly with new ones. Write to us today to get started!
