Importance of IT, ERP and CRM in the Business – From the beginning

The word “Business” is the hottest word in the world and means a lot in everyone’s life directly or indirectly. By definition it means a system or process where goods and services are exchanged for one another or for money.

The article first tells about how business was done in the historic time and gradually how we have added smartness by use of information technology (IT), enterprise resource planning (ERP) and customer relationship management (CRM).

Let us look at the word “Business” from the beginning. Thousands of years ago, there were no rules, regulations and there was nothing like government. Every human was following his or her wishes. The only rule was the Darwin’s principle “survival of the fittest”. The one who was fit and strong could do the things smoothly while others had to lose. At that time if anyone wanted anything from others, they were simply trying to get it by war or fight if it could not be achieved by peace. But the goal was to get it anyhow. This situation lasted a long period.

Gradually humans started to think on these kinds of situation. They brought up some rules and regulations to deal with each other’s need. From that point of time, the real meaning of the word business started. Now if anyone needed or wanted anything then they had to give something in exchange what the opposite party asked. That was the first authenticate way of doing business. But as the time passed, humans came to know that this was not the correct way of doing business. This is because if the customer was not having an item that the supplier wanted then the deal could not happen. Customer would have to wait for a long time to find the right person who could have something from him and he could get the item he wanted.

As the time passed we solved this problem by a new concept called money. By definition, money means any item or verifiable record that is generally accepted as a payment for goods and/or services and/or repayment of debts. So from now onwards, we started buying or selling goods or services in exchange with money. Hence money became the central part of the business and we were successful to solve the biggest problem of business in the history.

Doing business became easier and easier as the time passed. Now the next big problem was how to manage business, resources and relationships with customer when it gets bigger. For example you don’t have computers, papers and you are having many customers. Each day you are having many transactions with each of these customers then how will you manage this heavy volume of data?

We solved this problem at that point of time by inventing paper. With the help of paper, we started to maintain data and with the help of data it again became easier to manage the overall business. Information technology started here because we can consider the invention of paper as a storage medium for data & hence a part of information technology.

As the time passed we made the inventions one by one to ease our life. Two of the greatest inventions were the computer and internet. If you combine both then it becomes IT. By definition, IT means the study or use of systems (especially computers and telecommunications) for storing, retrieving, and sending information. Now the new era of information technology begins. After the invention of the computer, we started virtualization i.e. we started converting and maintaining physical data into the logical one. With the help of the computer and IT, data management became much easier.

Two of the most important concepts in IT are the “Enterprise Resource Planning” and “Customer Relationship Management”. ERP and CRM both play very important role in business. Now a days, we cannot imagine any business without use of ERP and CRM.

For example we are having a trade business. We are maintaining the business manually by physical books. We are dealing with just 10 customers and 3 suppliers on daily basis at an average of 5 transactions per day per party. We would be having around 65 transactions daily and 1430 transactions monthly considering 22 working days a month. So the simple question here is how much time we will need if we want to calculate the net payable or net receivable amount for a single party and for all the parties? These are the most basic figures that we need in day to day life.

There are lots of other analytical operations we need to perform to keep our business on track. How much time we will need to perform all these operations? Now if we think, we can hire employees to perform these tasks then how much costlier it would be. Employees are humans, hence after facing this huge cost we have to face human errors too and we cannot have the results within our required timeframe as these are time consuming operations.

After all of these efforts the main question is whether we would be able to focus on core part of our business? So the answer to these questions and smart solution to all these problems is to convert our physical business management process into logical one and to have software or web based system i.e. ERP / CRM specifically designed for our business process.

Now the first question in your mind is wouldn’t it be costlier? Well in that case, I must answer “NO”. I mean obviously it would create a cost but by paying that cost, we can have easy management, minimum possible employees, accurate (human error free) results within fractions of time whenever needed and other hidden benefits too.

Humans are considered as the most intelligent resources and we should not waste them doing such repetitive and time consuming tasks. Rather we should utilize them for decision making and strategy planning by letting them to use the results of computations performed by software or web based ERP/CRM solutions and IT.

Anyways this is just an example and some of you may think, how obsolete it is but I am sure, in this next age of IT, many people are still avoiding the use of IT, ERP and CRM into their day to day operations just to save some cost and avoid the return we get when we use it. The most unfortunate point is we are used to talk about preferring smart work over hard work but when we actually look at the scenario; we fail to follow this principle.

Now it’s time to conclude and for that part I will only say, smartness should be added to the business to accelerate its flow through the use of IT (information technology), ERP (Enterprise Resource Planning), CRM (Customer Relationship Management) and specifically through the customized software or web solutions designed especially for our business.