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To improve customer experience, which is best: CEM or ERP?

ERP may not be the newest or the sexiest CEM technology, but ERP systems can play a central role in helping manufacturers become more customer-centric.

In addition to new social listening tools and best-of-breed customer experience management (CEM) platforms, experts say a modern ERP system can play an equally important role in supporting manufacturers' play to become more customer-centric.

As manufacturers move past their traditional emphasis on cost reduction, they begin to see enhanced customer experience as critical for retaining existing clients, differentiating from the competition and improving sales force effectiveness. To get there, manufacturers are in search of more adaptable IT solutions that can help them do everything from analyzing past customer interactions to improving visibility of accurate and timely data.

New CEM platforms, rich in social listening and marketing automation capabilities, are gaining traction among consumer-oriented companies for keeping tabs on customer chatter and nurturing more intimate relationships with clientele. However, manufacturers already invested in ERP may view that system as a more palatable option to jumpstart basic CEM practices, such as better forecasting to ensure customers have timely access to the products they want or to support proactive maintenance for products in the field. ERP systems, tricked out with modern capabilities like support for mobile use, advanced planning capabilities and integration with other core enterprise and best-of-breed applications, can serve as a foundation for enabling those types of improved customer interactions across various phases of a product's lifecycle.

"For now, in the business-to-business space, ERP is enough for manufacturers to deliver on customer experience," said Joshua Greenbaum, president of Enterprise Applications Consulting, a consultancy focused on enterprise systems. "Manufacturers typically don't turn on a dime and swallow the latest buzzword, and CEM is one of those buzzwords. I don't expect manufacturers to jump into the fray the same way a leading consumer brand might, if they had to worry about tracking what's happening on the consumer side."

ERP can play starring role in customer experience

With master customer data already at home in ERP and core integrations with systems like customer relationship management (CRM) well established, ERP can easily deliver the visibility and automation of key business processes that will result in enhanced customer service, according to Heather Ashton, research manager for IDC Manufacturing Insights. An IDC Manufacturing Insights survey found that 75% of large manufacturers with more than 5,000 employees saw ERP as a vital platform for delivering a good customer experience given that it connects back- and front-office operations.

Although newer CEM systems focus on a specific element of customer experience -- tracking what customers say on Twitter or other social venues, for example -- they often don't have applicability beyond that one core function, Ashton explained.

"While best-of-breed CEM platforms are pushing the envelope in terms of social listening, aftersales capabilities and other specific functionality, they don't really span the entire customer lifecycle to include customer engagement, customer relationship management, order placement or fulfillment," she said. ERP is already the hub to support those key business processes, she added, noting that efforts continue to sync ERP with other critical customer-facing applications such as warranty management and aftermarket and field service systems, in addition to CRM.

Beyond integrations, ERP is transforming in other ways to improve customer experience. Experts say that many ERP systems are adding social components, which mirror popular social platforms like Facebook and Twitter to provide a better way for colleagues to collaborate, share data and respond more effectively to customer requirements. In addition, usability enhancements and support for mobile devices make data locked inside of ERP easily accessible to more people, facilitating how quickly customer problems can be resolved.

"ERP becomes a series of apps that decision makers can walk around with and access on their mobile device," said Erik Johnson, vice president of technology and strategy at Epicor. "Everyone has their top metrics and KPIs at their fingertips all the time so there's no more requirement for someone to spend a week crunching numbers just to resolve something for customers."

Most manufacturers behind in customer service

Trek Bicycles isn't using one of the newfangled CEM platforms to power up its customer experience effort, but rather is deploying a combination of CRM and ERP, linked through Scribe Software's data integration software. Together, the platforms create a complete picture of Trek's distributors -- and to some degree, end customers -- which helps the manufacturer provide personalized and high-touch customer support.

"We bring in CRM to help bridge the gap so we can see a lot of the unstructured or fluff data that doesn't exist in the ERP system," said David Peterson, enterprise collaboration manager at Trek. "Having both sets of data helps you guide the conversation with the customers."

Unlike Trek, most manufacturers still have relatively immature practices in the customer experience area, according to IDC's Ashton. The majority of respondents (85%) to the IDC Manufacturing Insights' survey still take a reactive response to customer requests, compared to only 9% of manufacturers proactively creating a customer experience-driven culture.

"A lot of manufacturers have figured out the technology, but they haven't matured their customer service offerings and capabilities to match," Epicor's Johnson said. "They tend to bulk up on customer service when the sales come in, but they are usually behind the eight ball when they do it that way."

Next Steps

Why manufacturers are shifting focus to customer experience

Choosing CEM software for manufacturing

CRM trends to watch in 2015

Dig Deeper on ERP software selection and implementation

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Great post. Totally agree with this. Is something I've been espousing for a while now. In today's connected world, where consumers expect instant response to product inquiries, availability, returns, etc., an integrated ERP is essential. And the companies who get this, AND can really implement a connected ERP systems will be the winners.