1. Are ERP and CRM systems drivers of business value?

1.1. Definition of ERP, CRM

1.1.1. ERP (Enterprise Resource Planning)
Enterprise Resource Planning (ERP) systems are core software programs used by companies to integrate and
coordinate information in every area of the business. ERP programs help organizations manage company-wide
business processes, using a common database and shared management reporting tools.
A business process is a collection of activities that takes one or more kinds of input and creates an output,
such as a report or forecast, that is of value to the customer. ERP software supports the efficient operation of
business processes by integrating tasks related to sales, marketing, manufacturing, logistics, accounting, and
staffing—throughout a business. In addition to this cross-functional integration, which is at the heart of an ERP
system, companies connect their ERP systems, using various methods, to coordinate business processes
1.1.2. CRM (Customer relationship management)
Generally, CRM is a tool focused on managing interactions with current and potential customers, aiming to
enhance relationships and improve customer satisfaction. However, in the context of business activities, CRM can
be defined by many different ways.
CRM is an information industry term for methodologies, software and usually Internet capabilities that help
an enterprise manage customer relationships in an organized way.
CRM is the process of managing all aspects of interaction a company has with its customers, including
prospecting, sales, and service. CRM applications attempt to provide insight into and improve the
company/customer relationship by combining all these views of customer interaction into one picture.
CRM is an integrated approach to identifying, acquiring and retaining customers. By enabling organizations
to manage and coordinate customer interactions across multiple channels, departments, lines of business, and
geographies, CRM helps organizations maximize the value of every customer interaction and drive superior
corporate performance.
CRM is an integrated information system that is used to plan, schedule and control the pre-sales and post-
sales activities in an organization. CRM embraces all aspects of dealing with prospects and customers, including
the call center, sales force, marketing, technical support and field service. The primary goal of CRM is to improve
long-term growth and profitability through a better understanding of customer behavior. CRM aims to provide
more effective feedback and improved integration to better gauge the return on investment (ROI) in these areas.
CRM is a business strategy that maximizes profitability, revenue and customer satisfaction by organizing
around customer segments, fostering behavior that satisfies customers, and implementing customer-centric
processes.

Figure 1.1 Types of CRM

 1.2. Business value
Business value refers to the benefits an organization gains from its activities and investments, often
measured in terms of increased revenue, reduced costs, improved efficiency, and enhanced customer satisfaction.
On the other hand, business values is not only measures in financial terms, but also in business performance.
The business performance is consider good when it has high productivity, low waste and exceptional customer
satisfaction.
1.3. ERP and CRM contribute to business values
1.3.1. ERP system:
The benefits of ERP are evaluated not only in financial terms (e.g., higher revenues and lower costs), but
also in terms of process level performance (e.g., improved cycle times), customer value (e.g., improved customer
service), and organizational learning value (e.g., better understanding of business, creativity).
Research studies have shown that, ERP implementations enable companies to improve their productivity and
profitability. One of studies researching about how ERP contributes to business values, Poston and Grabski (2001)
use a sample of 50 companies that implemented SAP, Oracle, PeopleSoft or Baan from 1993 to 1997, and observe
a significant decrease in the cost of goods sold as a percentage of revenue in the third year after implementation,
whereas during the first two post-implementation years, there is no significant decrease in the financial ratio. There
are no significant changes in the ratio of selling, general, and administrative costs to revenues or residual income.
However, the number of employees as a percentage of revenue significantly decreased all three years after ERP
implementation.
Benefits types of ERP
Table 1.1 ERP benefits types

ERP benefits Process Customer Finance

Automate - Goal: Improve process
(Operational efficiency.
benefits ) - Success measures: error
reductions, faster
processing, consistent data,
increase in throughput.
- Goal: Meet current needs of
customers more efficiently.
- Success measures: improved
response time, reduced customer
complaints, reduced errors.
- Goal: Reduce costs.
- Success measures:
reduced inventory-
carrying cost, lower
labor cost.

Informate - Goal: Improve tactical - Goal: Identify and meet - Goal: Increase
(Tactical decision making. customer needs proactively Revenue.
benefits) - Success measures: - Success measure: better - Success measures:
improved work scheduling, customer expectation setting, better forecasting,
improved work improved customer satisfaction, increase market share.
assignment, improved improved scheduling and
access to information, delivery.
improved quality
management, improved

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 control.

Transformate Goal: Adapt to radical
(Strategic environment changes
benefits)
Success measures:
technology changes,
competition changes.
Goal: Meet new customer Goal: Improve market
needs or new needs of value
customers
Success measures:
Success measures: increased growth capitalization,
customer base, partnership with new markets.
customer.

ERP application in real case

Example:
In reality, ERP is useful in many scenarios relating to assigning workers to tasks. For example, ERP would
contain the status of worker, whether he is free or he has been already assigned to doing other task. Furthermore,
ERP would also collect time durations for doing task, the number of tasks completed or the remaining assignments
need to be completed.
On the other hand, ERP proved to be useful in managing human resources. ERP collect and maintain
database relating to employee such as contact information, salary, attendance and performance analysis. The
information is keys in optimizing workers’ ability, utilizing their expertise.
1.3.2. CRM system:
Customer experience:
Following a CRM technology implementation, a computer or a tablet would contain a current, searchable,
product database and the customer’s record, and can be accessed easily anytime anywhere.
By obtaining customer data, salesperson can win the order from customer with ease or customer support
representative can help the customer to solve their problem easier. Furthermore, in many service industry,
providing thoughtful customer support post-sales is essential, and CRM would help to improve the efficient of this
process.
CRM support for operational activities:
Marketing automation: Campaign management; Event-based (trigger) marketing; Marketing optimization;
Sales force automation: Account management; Lead management; Opportunity management; Pipeline
management; Contact management;
Service automation: Case (incident or issue) management; Customer communications management;
Queueing and routing; Service level management
CRM contribute to business values
Improved customer relationships: CRM systems centralized customer data, allowing businesses to
personalize interactions, anticipate needs, and deliver superior customer service.
Increased sales effectiveness: By tracking customer interactions and preferences, CRM systems help sales
teams identify prospects, nurture leads, and close deals more efficiently.

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 Customer Retention and Loyalty: Through effective communication and personalized engagement, CRM
systems help businesses retain existing customers, foster long-term relationships, and drive repeat business.
1.4. Conclusion
In summary, ERP and CRM systems are essential for businesses, each offering unique benefits:

● ERP systems streamline operations and cut costs by integrating business processes.

● CRM systems focus on enhancing customer relationships and boosting sales efficiency.

By utilizing these systems effectively, businesses can improve productivity, reduce costs, and increase customer
satisfaction, gaining a competitive advantage in the market.

2. Are systems and processes integration drivers of business value?

2.1. CRM business processes
Table 2.2 CRM business process

Input Functional area Process Output

manage input

New products Marketing and Sales Marketing: Working on branding strategies Opportunities
marketing and segmentation, managing events. for new orders
Sales: filtered the leads for new
opportunities and their own sources into
opportunities.

Opportunities Accounting and Carefully evaluated to see if they fit with Opportunities
analysis Finance the company's overall strategy of feasibility
increasing revenue and profitability by
solution selling.

Supply Chain Carefully evaluated to see if they fit with

Management the company's overall production line and
capacity.

Order labor Human Resources Assigning, hiring labor for the new order Labor
assignment assignment

Fulfilment of Supply Chain Shipping and delivery Customer

order Management receive order

Feedback Marketing and Sales Technical support, warranty work, product Customer
receiving returns, fixing quality problems, and feedback and
complaint handling satisfaction

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 Returns process Supply Chain Shipping and delivery returns from Returns
Management customer receiving

Example:
When a new flavor soft drink like Coca-Cola Zero is launched, Coca-Cola’s Marketing and Sales
department needs to make a marketing campaign of that flavor to a range of customers, then the customers will
know and make orders to the business.
Then, the business has to define if those orders are feasible or not by evaluating the break-even point (supported by
Accounting and Finance dept.), production capacity of the Coca-Cola manufacturer (supported by Supply Chain
Management dept.).
Next, Coca-Cola will fulfill the order and receive, record the feedback, solving complaints from customers.

2.2. Input and output of departments

2.2.1. Input of CRM
Table 2.3 Input of CRM

Input that Functional area Output of CRM Example

CRM need manage input

Potential Marketing and Sales Contacting

customer range, customer strategy
customer
behaviors

Sales and new Marketing and Sales Customers CRM informs customers they receive
service satisfaction free Coca-Cola Zero Sugar when
information sharing about the product on social
networks.

Product data Supply Chain Customer CRM informs the customers that Coca-
Management satisfaction Cola Zero Sugar contains 0% of sugar
and is still delicious.

Production line Supply Chain Opportunities When Coca receives the order for
capacity Management feasibility Coca-Cola Zero Sugar from a
distribution center, they need to
Expected Accounting and
evaluate the revenue, production
revenue and Finance
capacity of that order and the CRM
probability
dept. can contact the customer to

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 inform them about accepting or
declining customer orders.

Labor Human Resources Task labor The Coca’s CRM dept. need to assign
assignment assignment the suitable tasks to the right staff.

2.2.2. Output of CRM

Table 2.4 Output of CRM

Input Functional Output Example

area

Customer feedback, Marketing and Customer From customers' feedback and

information, Sales behaviors communication history about Coca-
communication Cola Zero Sugar since 2005 (the year
history Coca Zero launched), the business
defines that the customers want soft
drink flavors that still have the same
taste with least affection to health.

Opportunities Accounting and Opportunities

information Finance feasibility

Supply Chain
Management

Sales orders Supply Chain Production In the production process, SCM dept.
Management status need to update the production status
since each dept. in Coca company
and the customers of Coca may want
to know about the status of their
orders.

Sales orders Accounting and Invoices After the order is fulfilled, the Coca
Finance company needs A&F dept. send the
bill to the customers.

Employment need Human Labor Each dept. in Coca company needs

Resources assignment, the labor resource information to
hiring assign the suitable tasks to the right
staff or hire more staff.

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 2.3. Conclusion
Systems and processes integration in CRM surely are drivers of business value in CRM by improving:
Data consistency: data is consistent across all systems, reducing errors and providing a single source of truth
for customer information, which improves decision-making by providing accurate and up-to-date insights into
customer behavior and preferences. Ex: When the CRM department and other departments need to evaluate
customer behavior, they all take data from the database and each can update and the other can take that data right
after.
Improved customer experience: enable a seamless flow of information between departments, allowing for a
holistic view of the customer journey. This leads to more personalized interactions and faster resolution of
customer issues, ultimately enhancing the overall customer experience. Ex: Customers want to return the defective
product, they can receive the response immediately and have a compensatory discount or another new product.
Scalability and flexibility: Integrated CRM systems can easily scale to accommodate business growth and
changing customer needs, such as when the business expands, integrated systems can adapt to handle larger
volumes of data and transactions without sacrificing performance or reliability.
Time and effort savings: eliminating duplicate data entry and automating manual tasks. Ex for automating
manual tasks: integrating CRM with email marketing platforms can automate lead nurturing campaigns, saving
time and resources.
Cost savings: By automating manual processes and reducing data duplication, integrated CRM systems help
lower operational costs, businesses can also avoid the expense of maintaining multiple standalone systems by
consolidating their technology stack into a unified platform.

3. Do systems and processes integration work as moderators of ERP and CRM systems in business value
creation?
Implementing ERP into the business process would make the information flows between departments
become smoother, faster, simpler and with fewer errors. Time-saving in information transmission would reduce the
time required for solving problem in sales, operation process.
Quick problem resolvation would lead to increase in customer satisfaction, minimizing workload for
employees. By optimizing processes in this way, business value will increase, not only reducing cost but also
improving process efficiency.
product flow and information flow.

3.1. Value Creation in business

Value creation involves turning resources into something valuable through hard work, it’s a comprehensive
concept encompassing the creation of tangible products and services.
It also involves investments in capital goods and intellectual property assets. In essence, value creation is
about making more out of what you have, and it’s central to the success of any organization.
It encompasses a wider range of aspects, such as improving products and services, fostering stronger
customer relationships, driving innovation, and making positive contributions to both the community and the
environment.

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 At its core, grasping the meaning of value creation is closely tied to sustainability. Businesses need to
continuously innovate and adapt to changing market conditions. Moreover, Value creation involves aligning with
the digital landscape, where data-driven insights, technology integration, and agile decision-making are pivotal. To
truly excel in understanding the meaning of value creation, businesses must remain agile and responsive to the
evolving needs and expectations of their stakeholders.
Value creation in business involves a multifaceted strategy for attaining enduring success. It goes beyond
mere financial aspects, weaving together stakeholder relationships, innovation, efficiency, and distinctiveness. To
thrive in the value creation process, businesses should embrace a comprehensive approach that emphasizes
crucial strategies and practices, ensuring their continued competitiveness and relevance in a swiftly changing
environment.

3.1.1. Key factors of Value creation

- Customer Satisfaction and Loyalty
- Competitive Advantage
- Profitability
- Innovation and Adaptation
- Shareholder Value Creation
- Employee Engagement and Retention

Value creation in business model:

Figure 3.2 Value creation in business mode

In order to measure the values that the business create, we need to observe the process that create these
values.
3.1.2. Value creations according to Stakeholders

Figure 3.3 Value creations according to Stakeholders

Stakeholders Value creations

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Customers Understanding Customer Needs
Product or Service Quality
Features and BenefitsS
Personalization
Convenience and Accessibility
Competitive Pricing
Customer Service and Support
Trust and Reputation
Innovation
Sustainability and Social Responsibility
Communication and Engagement
Feedback and Improvement

Employees Competitive Compensation and Benefits

Career Development Opportunities
Work-Life Balance
Recognition and Rewards
Safe and Inclusive Work Environment
Empowerment and Autonomy
Clear Communication and Feedback
Health and Wellness Programs
Company Culture and Values
Social Responsibility and Sustainability
Employee Engagement and Feedback
Fair and Ethical Treatment
Team Building and Collaboration
Leadership Development

Investors Financial Performance

Dividend Payments
Capital Appreciation
Transparency and Disclosure
Risk Management
Sustainable Growth
Effective Governance
Efficient Capital Allocation
Clear Strategic Vision
Communication with Investors
Return on Investment

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 Market Position and Competitive Advantage
Adaptability and Innovation
Legal and Regulatory Compliance

3.1.3. Example for procedures after ERP implementation

Exchange and Returns procedure of Levents before and after implementing ERP
Before ERP
This process involves three departments Customer Service, Warehouse and Accountant:

Figure 3.4 Exchange and Returns procedure before ERP

Role and tasks of each department in this process:

Customer Service:
- Fill out the Return forms by getting information about Return orders from customers.
- Confirm the amount that customer need to pay including difference amount, shipping fee. After that, issue
an invoice for the customer.
- Sending the Return order to the Warehouse department.
- Consolidate and send return invoices to the Accounting department on a weekly basis.
Warehouse:
- Receive return orders and double-checking the information provided by Customer Service.
- Contact the shipping unit to schedule pickup plan.
- Adjust inventory on the warehouse management system (WMS).
- Package product and deliver it to the customer.
After the customer receives the items, they would send back the initial product to the warehouse
- The warehouse receives returned packages from customers and conducts quality checks. If the items meet
quality standards, they are restocked in the inventory. If items are damaged, they are moved to the
defective products area.
- Adjusting inventory levels to reflect actual stock.
The Accounting department receives weekly reports from Customer Service regarding these return orders to make
necessary adjustments.
Analyze and opinions on the process
This process will consume a significant amount of time for departments to handle information, estimating that
processing a return order will take up to 45 minutes in total. The procedure also requires a lot of manual tasks,
especially for the Warehouse department when they have to create orders and update inventory manually.
Moreover, Accountants have to wait for Customer Service to consolidate information before they can create
weekly reports. Specifically, the time needed for each department to handle tasks is as follows:
- Customer Service: 5-10 minutes
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 - Warehouse: 15-20 minutes for processing information, 10-15 minutes for packaging goods
- Accountant: Must wait for Customer Service to consolidate information before proceeding with report
generation.

After ERP

Figure 3.5 Exchange and Returns procedure after ERP

Customer Service:
- Create orders and get information based on their initial orders.
- After importing the Return request on to ERP, Warehouse and Accounting departments can easily access the
information.
Warehouse:
- Confirm order’s information and package the products, ERP system will automatically update the inventory
and make arrangements with shipping unit.
- After receiving the product returned from customer, ERP would automatically update the inventory.
Accountant:
- Be more proactive as each return order is updated in the system, no need to wait for other departments to
confirm their information.
Analyze and opinions on the process
The procedure would reduce processing time and workload for each department. Especially for the
Warehouse department, inventory updates and shipping arrangements will now be automated by the system,
leaving them only responsible for packaging and handing over to the carrier.
Customer Service Department: 3-6 minutes (reduced information processing time due to existing customer
data from the initial order).
Warehouse: 5 minutes for processing information, 10-15 minutes for packaging goods.
Accounting Department: Invoice updates will be sent continuously.

3.2. Conclusion
In today's business models, enhancing customer experience and understanding the psychology, needs, and
desires of customers regarding the products or services a business offers are increasingly emphasized and focused
on for development. In the current economic climate, where the economy faces certain challenges and customers
become more cautious with their spending, competition among businesses in the same industry is significant. In
such a context, creating sustainable and distinctive values will make your business attractive and stand out in the
eyes of customers.
Receiving continuous feedback from customers during the business operation process contributes to a
holistic view of how the business operates. We must synthesize and identify signs of instability in the process,
enabling the business to make appropriate improvements.

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 When CRM is integrated into the ERP system, it brings immediate responsiveness to the business as
customer data is continuously and instantly updated:
The CRM department can analyze and identify potential customers for future promotions to enhance the
experience for specific customer groups. Additionally, departments such as warehouse, marketing, and purchasing
can participate in calculating and determining suitable campaigns for each customer segment.
Feedback received from customers about product quality or differences in batches delivered to customers is
received and processed by the purchasing and warehouse departments to address negative impacts from
transportation or manufacturing processes that alter product characteristics. The percentage of faulty items in
each order is also recorded so that departments can calculate the percentage of faults in each batch produced
and find solutions for customers and the production process to avoid similar losses in the future.
The shopping experiences of customers also reflect employee attitudes and measure the completion level of
tasks for each individual, allowing the HR department to evaluate, reward, and provide appropriate
development directions for potential employees.
Customer desires or feedback also help businesses identify customer preferences or needs for new products in the
future, allowing the business to capture and develop suitable products that are competitively priced and provide
optimal experiences for customers.
Customer purchasing trends can also be used to predict future purchasing power, purchasing power by season, and
product types that customers will buy seasonally.

Some value creation that ERP would support business to conduct:

Understanding Customer Needs: The first step in maximizing customer value is understanding the specific
needs and preferences of your high-value customers. This involves market research, customer surveys, and
feedback analysis to gain insights into what they value.
Product or Service Quality: Providing high-quality products or services is essential for value creation. Quality
ensures that customers receive what they expect and minimizes the likelihood of dissatisfaction.
Features and Benefits: Offering features and benefits that align with customer needs and preferences can enhance
the perceived value of your offering. Highlighting how your product or service solves their problems or fulfills
their desires is crucial.
Personalization: Tailoring your offerings to individual customer preferences can create a unique and personalized
experience. This might include customization options, product recommendations, or personalized communication.
Convenience and Accessibility: Customers value convenience and accessibility. Make it easy for them to
purchase, use, or access your products or services. This can involve user-friendly interfaces, efficient customer
service, and multiple distribution channels.
Competitive Pricing: While value creation doesn’t solely depend on low prices, offering competitive pricing that
aligns with the perceived value of your product or service is important. Customers should feel they are getting a
fair deal.
Customer Service and Support: Exceptional customer service and support can significantly enhance value
creation. Being responsive to customer inquiries, resolving issues promptly, and providing post-purchase support
are essential components.

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Trust and Reputation: Building trust through transparency, reliability, and a positive reputation is crucial for value
creation. Customers are more likely to engage with businesses they trust.

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