02/04/2015
Lets talk about how SOM, ERP and CRMs are different from each other on a functional basis.
CRM, or Customer Relationship Management software, is a system for managing a company’s current and future interactions with customers. It’s a robust system that’s optimized for pipeline management, data aggregation across large sets of contacts, and reporting and oversight. Salesforce is the most popular CRM.
While you can upload, access and update your customer information in SOM software, it is definitely not a CRM. While CRM offers great utility, it’s missing one of (if not the most) critical offering of an SOM system – order writing functionality. While some companies attempt to use their CRM to write sales orders, these workarounds consistently come up short.
An ERP, or Enterprise Resource Planning system, is a collection of hard facts about financial or inventory events. It’s what a brand runs its business on. While there is a fairly good chance a wholesale brand doesn’t use a CRM, there’s a very slim chance that they’re not using an ERP. ERPs range from smaller systems like Quickbooks to complex beasts like SAP and Oracle.
An invoice is to the ERP as a sales order is to SOM. While an invoice is a hard fact, a sales order hasn’t happened yet. It’s a conversation about a transaction between your business and a customer; it can change in any number of ways before it becomes an invoice. Only then does your ERP enter the picture.
To summarize, we have a concept we call “The Three Orders” that describes the differences between these systems at a very fundamental level. Order number one, yesterday’s order, is served by the ERP market. It’s a representation of past business. Order two, represented by CRMs, is tomorrow’s order – a prediction of what a customer-specific order will probably look like based on the data you synthesize from your CRM. Order three, represented by SOM, is today’s order – the order you’re writing right now.