CRM, ERP, MRP, SaaS? Decoding the Alphabet Soup of Enterprise Resource Planning
Do you know the TCO for the ERP and MRP you are using to manage your BTS and BTO production? Huh? Translation: Do you know the total cost of ownership for the enterprise resource planning and material requirement planning systems you are using to manage your build to stock and build to order production? In the world of manufacturing technology, it seems the acronyms can overwhelm a conversation pretty quickly. Below are definitions of some common terms used when you are looking at software solutions to run all of your key operations and financial business processes:
- Enterprise Resource Planning (ERP) – the integrated management of core operational processes, often in real-time and mediated by software and technology. ERP is usually referred to as category of business-management software—typically a suite of integrated applications—that an organization can use to collect, store, manage and interpret data from many operational activities.
- Material Requirements Planning (MRP) – often an integrated subset of your ERP which manages inventory, production planning and scheduling, and more.
- Customer Relationship Management (CRM) – software used to manage and analyze customer interactions and data throughout the customer lifecycle, with the goal of improving business relationships with customers, assisting in customer retention.
- Sales Force Automation (SFA) – software that automates new business tasks such as opportunity tracking, sales order processing and analyzing sales forecasts and performance.
- Software as a Service (SaaS) – a software distribution model in which applications are hosted by a vendor or service provider and made available to customers over the Internet, usually on a subscription basis.
- Total Cost of Ownership (TCO) – the analysis meant to uncover all the lifetime costs that follow from owning certain kinds of assets. Naturally, asset ownership brings purchase costs but ownership also brings costs due to installing, deploying, using, upgrading, and maintaining the same assets.
Implementing an ERP software system can improve productivity and efficiency, decrease costs and streamline processes for organizations. Three primary benefits are:
- Integrated information – instead of having data distributed throughout a number of separate databases, all information can be located in a central location, keeping data consistent and up-to-date.
- Customer sales and service – sales and customer service reps can interact with customers more easily and track their interactions using a CRM, leading to improved relationships. Information can be tracked across the entire customer lifecycle—from when they are a lead and opportunity through sales order, fulfillment, renewal and support.
- Reporting – ERP software makes running reports easier and more customizable for specific data requests. Users are able to run their own reports rather than waiting on another department, like IT or finance, making more real-time data available.
If you find yourself getting lost in the technical jargon as you are considering your choices, we can help, contact ERP Practice Group Leader Tim Ernst.