Over the past couple of years, in the midst of economic downturn, you’ve come to understand that customer resource management (CRM) is a means to hone your competitive edge. Indeed, you’ve advanced your consideration of CRM so much that you understand it more for what it really is—customer relations management. The odd thing is that you have a nice CRM module right there in your enterprise resource planning (ERP) software system—you’ve just never made big use of it.

It’s time to start using your CRM, and here’s why: if used religiously, your CRM can help you achieve an incredible ROI of your whole ERP system, as well as provide a sharpened edge in your competition for business.

The total cost of ownership of your ERP as a function of your CRM depends on your requirements initially and over time. As your business changes, so do your CRM requirements. A well-planned CRM strategy, in general, can save you time and money now, yet allow you to scale your solution as your business grows.

For many manufacturers, a cost of ownership model over a 3-5 year period will give a better ROI for their ERP investment with an in-house system. To justify this however, you need to think out your strategy carefully. One of the key decision points is how integrated your CRM module is with the whole of your ERP system. Is sales and accounting tied in with purchasing, inventory, production, and shipping? The more integrated and real-time is the data flow within and between departments, the better informed is the CRM and the decisions that come from it. Better decisions mean lower costs, greater profitability.

The ROI of your CRM can be assessed through variables that are quantifiable, and yet can be broken into both tangible and intangible factors. Let’s take a look at the tangible factors. As example, if your sales team can identify new sales and cross-sell opportunities faster and close transactions 20 percent quicker, then you can easily measure your productivity increases along with your revenue increase. This is a potent and easily observed outcome from the use of the CRM.

However, the intangible factors can be more CRM ROI more difficult to quantify. Take for example, the relationship of sales management to sales themselves. CRM software enables you to automate your sales and marketing processes. To substantiate productivity gains, you need to have a clear understanding of your manual processes. For example, many sales people have to develop their own quotes and work on spreadsheets. Others have a sales administrator to assist them. These are all time consuming tasks leading to a decrease in productivity and an increase in costs. A robust CRM will automate much of this for you.

Finally, customer service modules can also be measured if your incidents can be reduced through better handling, service escalation, and customer knowledge. Reducing customer complaints and increasing your customer satisfaction will have a positive effect on your revenue and profit. Satisfied customers are typically loyal customers, and customers more likely to refer others to you.