When it comes to effective business management there is a constant debate whether companies should go with setting up CRM for forecasting and Analytics or BI software. This is due to the fact that both share a number of similar features and are aimed at using historical data to identify key trends.
Obviously, there is not a single right answer to the question which one is better, and as always it depends on the business requirements and specifics of operation. So, in this article we’ll take a look at key differences between Business Intelligence and Customer Relationship Management platforms and identify their core strengths and weaknesses.
What is Business Intelligence Software?
The term “business intelligence” OR “BI” means an infrastructure that comprises a range of tools and processes that allow companies to gain a clear view of all their business data, so they can make data-driven decisions.
Business Intelligence Software is a system that enables businesses to view all their data from a single platform. The software features customizable dashboards, charts, graphs, as well as other types of reports to visualize a large amount of complex business data. This business data can be highly customized according to different needs, KPIs, and metrics, allowing key stakeholders to visualize the data in the way they need it. Since Business Intelligence Software can be intuitive to use, this allows users to take complete control of the reports in order to make data-driven decisions.
Pros and Cons of Business Intelligence
Perhaps the biggest disadvantage of BI software is its innate complexity. It is true that vendors try to enhance user experience and make powerful BI tools easy to use, but still, a business needs a skilled analyst with a strong business background in order to realize the full potential of the software.
Technical and business skills are equally important, as setting up Business Intelligence requires high-level of technical understanding, but it must be informed by business objectives. This type of software is innately more complicated but it provides a greater functionality as well as more uses. Unlike CRM, BI can give you a broader look at your business performance due to flexibility in implementation and integration stages.
However, this complexity makes it cumbersome, and kind of “easy to break”.
What is CRM?
CRM or Customer Relationship Management is a strategic method used by companies to manage the interactions and relationships with existing and potential customers. CRM allows businesses to streamline the communication process, improve customer service, improve sales, retain customers, build strong relationships with customers, and increase profitability.
CRM software allows companies to record the contact details of existing and potential customers such as name, phone number, emails, address, and social media profiles. The Customer Relationship Management system organizes all this data and maintains a complete record of your customers’ communications and interactions, the preferred mode of contact, purchase history etc, so you can manage relationships with your customers.
The primary function of CRM software is to build good and long relationships with the customers and track the prospects, which is important for acquiring new customers as well as retaining existing customers.
CRM brings all these processes under a single platform — which makes customer relationship management simpler by using highly customizable dashboards and reporting. These customer insights include communication history, order status, any pending customer service issues, and more.
CRM Pros and Cons
Although originally, CRMs weren’t capable of accessing data stored across distributed sources, modern platforms have integrations that allow enhanced data acquisition and reporting. So, let’s take a look at some CRM pros and cons.
But even with the latest additions to its functionality, even the best CRM is still focused on sales or marketing. Customer relationship management software is tailored so that any salesperson can easily interpret information and customize reporting to suit their needs.
CRMs are easy to use and they perform their task really well. If you’re looking for customer behavior patterns and need to structure a workflow for sales and marketing departments, the CRM will be your software of choice. But there are limitations to what the platform can achieve, as it is not very effective at obtaining and interpreting information outside its realm. You will not be able to obtain reliable business insights into external market trends.
BI vs CRM: Main Differences
BI tools and CRM tools were built for different purposes.
BI was built from a need to obtain strategic intelligence from fields of data in order to inform business decisions. Over the years, the data produced by any company grew to the point, where no human brain could comprehend it any longer and information management needed to be interpreted by software with high computational power. BI was born as a means to rationalize immense volumes of data into actionable reports.
On the other hand, CRMs were developed with a customer-centric approach. The platform serves a need to execute almost every part of the customer experience in a more efficient and time-conserving manner. CRM uses data, not to project broad business performance, but rather to help in retaining loyal customers and attracting new ones.
Data and Reporting
Both CRM software and business intelligence software have advanced reporting systems with different capabilities and data sources.
Business intelligence tools are capable of fetching data from multiple data sources to build comprehensive reports – unifying many types of data points into single dashboards. Moreover, business intelligence systems have the visualization capabilities to build infographic reports such as charts and graphs to give you a clear understanding of the data and gain better insights.
While CRM systems access the data from a single source – which is primarily the database connected with the software. These databases mostly contain the contact information of the customers such as name, phone numbers, emails, communication history etc. Standard CRMs cannot use the data stored in the external databases, however, advanced CRMs have the capability to integrate more databases into the system for enhanced reporting and better insights.
Usability
For BI tools, you would need a skilled data analyst that would help you set up the system, connect the databases, and make it functional. While your business analyst makes the tool operational, the data analyst may not be the right person to identify key information and gain insights to make decisions. This is where your key stakeholders use the tool to build reports using metrics and KPIs that are relevant to their field of work.
CRM is typically used by the sales, marketing, or customer service teams. While it’s much easier to set up and draw reports, you require skilled marketers or salespersons that can leverage the core functions of the CRM tool, such as closing more deals, providing better customer experience and building strong relationships with the customers.
Connecting CRM & Business Intelligence
But some companies actually require both:
- Simplicity and customer focus of CRM;
- Flexibility and functionality of BI.
There is a misconception that you can use BI as a CRM but you cannot use CRM as a BI tool. Although it is true that with standard Business Intelligence capabilities you can aggregate data in such a way that it performs CRM tasks, but it still lacks a very significant aspect – simplicity to be operated not by a professional analyst.
Naturally, in order to build a system that incorporates strengths of both, special integrations were built that allow businesses to combine two different systems in a single cohesive IT environment.
For example, Salesforce CRM has a business intelligence solution that can be implemented in your SaaS platform. Moreover, the company has invested a lot in AI and predictive analytics to compete with software such as Power BI.
Associating the CRM application with the business intelligence (BI) system can provide enormous flexibility and a bird’s eye view of your business performance. Moreover, combining two will give your business some of the most advanced forecasting and predictive analytics capabilities.
Business Intelligence vs CRM Services by OMI
Now depending on your business requirements, you might want to consider specific software. When it comes to considering whether to implement a CRM system, a BI system or both, there is a question that you need to ask yourself:
What is your central business goal: improving customer retention and increasing sales? Identifying and monitoring key market trends and formulating a strategy? Or both?
Here at OMI, we create robust solutions in the field of data analytics. With our combined expertise in BI and as CRM implementation, we can create a cost-efficient and powerful IT infrastructure with smooth data integration between platforms.
Our specialists are fully proficient in dealing with the industry’s highest performance analytic databases and most popular CRMs like Salesforce and Microsoft Dynamics.