Over the last decade, business management software solutions have been improving and diversifying drastically. That is particularly true since businesses nowadays have almost plenty of options on the table. Companies’ decision-makers choose between multiple solutions, such as Customer Relationship Management (CRM) and Supply Chain Management (SCM).
Most organizations utilize CRM and SCM together, but they have distinct differences. For instance, CRM is mainly utilized by marketing and sales teams, while SCM is primarily utilized by production, procurement, and distribution teams. The only similarity between the two business management solutions is that they enable organizations to track information associated with their business operations and then utilize it to make informed decisions.
Keep reading and discover the key difference between CRM and SCM.
What is CRM
CRM refers to a marketing system where organizations utilize databases to collect customer data to build stronger marketing strategies and programs. It helps move the sales process and keep customers happy and satisfied.
Any department can use a similar database to record customer interactions, and it helps eliminate duplicate data and efforts. It also records interactions by phone, email, or social media. Companies that use advanced CRM software can predict what customers are likely to purchase according to their past behavior.
With CRM solutions, the marketing department can track marketing efforts and measure ROI by seeking how many people become buying customers from each effort. The sales department can benefit from CRM by tracking their prospect and customer interactions by seeing when they were contacted. It also helps them determine what customers are inclined to buy in the future or what they have purchased.
Additionally, the customer service department can use CRM to record customer interactions, including their issues with a product or service.
Benefits of CRM
CRM’s paramount objective is to constantly improve the overall customer experience via better systems and ongoing research. The solution helps companies build and maintain long-term relationships with their customers. In return, they can optimize their profitability.
Companies can use the data gathered from customers, allowing them to target particular customers with focused marketing. As a result, they can attract the interests of the customers while minimizing wasted messages and campaigns.
What is SCM
SCM refers to the collaborative method wherein a product reseller works hand in hand with supply chain partner. That way, they can bring the best value among their customers. SCM software solutions allow the vendors and resellers to sync the ordering systems and inventory levels to deliver more efficient order and distribution fulfillment.
SCM software helps companies track and execute processes, such as:
- Design
- Procurement
- Manufacturing
- Production
- Distribution
- Sales
- Order fulfillment
This business management software solution helps minimize company costs and inventory risks. Companies that use advanced SCM software can predict issues inside the supply chain before they occur. It is used across most departments, including customer service, accounting, manufacturing, and shipping.
With SCM software, companies are prompted to order new inventory. That way, the inventory arrives before they run low on stock. Then, it tells them the following:
- Where the orders in shipment
- When the orders arrive in the warehouse
- Where the orders are in production
- When the orders are shipped
- When the orders are expected to arrive at the customers’ locations
Benefits of SCM
The main principle of SCM is to help members of a distribution channel in delivering value to their customers. The swift response to special orders and inventory needs helps reduce inventory levels and management costs. It also promotes fewer stock-outs/
With SCM solutions, companies can manage costs more efficiently while improving profit margins. They can also achieve more transportation solutions and practices that are environmentally friendly.
Establishing strong relationships with supplies to access pricing information or spare parts availability help companies can critical information to run a profitable operation.
What is the Difference Between CRM and SCM
SCM strategies allow organizations to ensure they have the information, materials, and financial resources necessary for producing quality products or services timely. Companies can achieve effective supply management techniques through workflow coordination from vendors to manufacturers, distributors, and retailers. It also ensures product availability when necessary.
On the other hand, CRM personnel interacts with customers to ensure they get the necessary support and services. CRM programs ensure that customers are happy with the products or services after sales are completed. It happens through business processes automation for service, support, and sales.
For instance, at a dental clinic, the SCM personnel ensure the dentists have all the essential supplies and equipment to conduct the dental examinations and treatments. Then, the dental clinic’s CRM personnel work with the clients to ensure they get the proper medications to administer at home.
Long sales cycles with plenty of prospects or companies with many customers will find using CRM software advantageous. However, sources components from different suppliers or companies that focus on fast delivery times are more likely to utilize SCM software.
Most service companies with many clients require good CRM systems. They may not need SCM software if there are no products or supplies to track. However, small manufacturers that make part of car manufacturers may require CRM software. On the other hand, if it sources plastic, steel, and other components from various suppliers and requires real-time shipment tracking, SCM software can be invaluable to them.
Final Thoughts
Customer Relationship Management and Supply Chain Management may have differences from each other. Still, companies that require effective tracking and want to increase their sales and profitability can use them both. At the outset, these two business management software solutions seem like two different departments, but each relies on the other to succeed.
CRM and SCM integration strategies help any company to create a more efficient workflow. After all, technological advancements make it a lot easier to accomplish that workflow. These two technology-driven business processes may differ in terms of uses and impact in the businesses, but they are both necessary to achieve goals and success.
Hopefully, the ideas above will help you better understand CRM and SCM and determine whether you need one of them or combine them.
