Enterprise Relationship Management (ERM)
What is Enterprise Relationship Management?
Enterprise Relationship Management (ERM) is a business methodology that focuses on improving the relationships between a company and its various stakeholders, including customers, employees, suppliers, resellers, and partners. It is an extension of customer relationship management (CRM) that encompasses data from all departments, such as manufacturing and finance, in order to better monitor and analyze customer relationships. ERM is built on the belief that personal interactions are what create the most value in business relationships, and that this value accumulates over time.
ERM is a business strategy or solution that involves analyzing data to better understand internal enterprise relationships, customers, and customer use of produced products or services.
With enterprise relationship management, businesses can access, analyze, and share information about all of their employees, suppliers, and strategic business partners as well as customers. It has all the tools needed to identify and assess the factors that impact these relationships and put the necessary best practices in place to maximize their contribution to the bottom line. ERM is built on the belief that personal interactions - not automated transactions - are what create successful business relationships which add value over time as they grow stronger.
The goal of ERM is long-term customer satisfaction and increased profitability through a better understanding of the relationships between entities in an enterprise. This can be achieved through data mining techniques such as pattern recognition, trend analysis, segmentation, and clustering. ERM solutions often involve software that helps identify potential issues or opportunities within an organization's network of partners and customers. By having this information at hand, companies can make more informed decisions about how best to engage with their partners or target new customers in order to maximize profits while maintaining customer loyalty.
Many businesses also use enterprise relationship management solutions to closely monitor competitive activity. Customers, partners, and even employees can provide a wealth of valuable information about other vendors.
Enterprise relationship management applications make it easier to capture, store and analyze that vital data, and use it to create more successful business plans and strategies.
ERM can take many forms as it addressed the complexities of both internal and external enterprise relationships, which include: customers, business and channel partners, specialized service providers, suppliers, employees, management, and executives. Adopting ERM is described as more of a cultural change than a technological change as more focus is given to the human side of business processes and how they are affected by enterprise relationships.
The central focus and ultimate purpose is customer and customer satisfaction and how these relate to increased revenue and revenue streams. Related software, strategies, and business solutions include CRM (customer relationship management); PRM (partner relationship management (PRM); ERP (enterprise resource planning); HRM (human resource management); and SCM (supply chain management).[1]
What Does an Enterprise Relationship Management Solution Do?[2]
With an ERM strategy and related technologies in place, a business can:
- Identify and leverage its greatest relationship assets, such as its reputation, or those employees who have strong individual connections with key clients or external business partners.
- Gain a greater understanding of its customers, far beyond the typical sales, marketing, and support information contained in a CRM system. With enterprise relationship management, a company can uncover how clients actually use a particular product or service, what their preferred payment and delivery methods are, and more.
- Uncover vital trends in employee behaviors, and learn more about the factors that positively and negatively influence productivity, satisfaction, and loyalty.
- Improve the flow of critical information between suppliers, resellers, and other business partners, and enable them to more actively participate in the business process by giving them a complete and timely view of all their interactions with the company.
Enterprise Relationship Management Vs. Customer Relationship Management
Customer Relationship Management (CRM) and Enterprise Relationship Management (ERM) are both terms that have been used to describe the practice of managing relationships with customers, vendors, and other stakeholders. While CRM focuses primarily on existing and potential customers, ERM encompasses all important business relationships.
CRM provides information only from the company’s perspective, while ERM considers all stakeholders involved in the relationship. ERM provides a holistic, global view of the relationships and allows companies to access, analyze, and share information about employees, suppliers, strategic partners, and customers. It also allows companies to assess the factors that impact the relationships and optimize their contribution to the bottom line.
CRM focuses on the customer side of the relationship, while ERM also considers supplier, business partner, and employee perspectives. This multi-faceted approach enables companies to identify and leverage their greatest relationship assets, such as reputation and individual relationships with key clients. It also helps them to gain a deeper understanding of their customers, uncover trends in employee behaviors, improve the flow of critical information between stakeholders, and closely monitor competitive activity.
In conclusion, the main difference between ERM and CRM is that ERM provides a more holistic, multi-faceted approach to relationship management, enabling companies to gain a greater understanding of their customers, partners, and employees, and optimize their relationships for maximum success.