What’s the Difference Between CRM and ERP
Every business handles a large amount of data and deals with complex data management processes. ERP(Enterprise Resource Planning) and CRM(Customer Relationship Management) are similar in many ways. Both are used to increase the profitability of the business. With ERP and CRM software, the data is disturbed across multiple channels, and there will be no fear of losing the information.
Customer satisfaction is the most valuable virtue of any business. When you fail to manage your customers then customer relationship processes like sales, decision making, and purchases become inefficient. To avoid this kind of situation, businesses must use CRM and ERP software combined.
CRM is a unified software that manages the relationships with customers or clients of the organization, while ERP is a software program that manages the business processes of the entire organization. ERP emphasizes the planning of the resources to increase the efficiency, effectiveness, and economy of the enterprise. CRM and ERP software is implemented by companies to increase their efficiency and profitability.
What is ERP?
ERP is the ability to deliver the integrated suite of the business application. ERP tools share a common business process and the deep operational end to end process like finance, HR, supply chain, and manufacturing. It automates and supports a range of administrative and operational business processes across multiple industries.
ERP software improves the efficiency of business processes. It allows the rapid sharing of standardized information throughout all departments. And it provides departments to plan for issues before they become a problem for the department. In short, ERP enables the business to focus on the data, instead of the operations and provides a method for streamlining business processes across the board.
What is CRM?
CRM is the term that refers to the business strategies that aim to manage the needs of the company’s current and potential customers. It is the way to identify, acquire, and retain customers who are the greatest asset of any business. The goal of CRM is to effective communication with customers and improve customer relationships over time.
CRM is a system that stores and records all information related to customer interactions. CRM software likeCentraHub CRM provides a standardized approach for collecting and sharing customer data and classifying customer interactions.
Since all your data is regulated through CRM, it’s easy to share throughout the business. CRM is used by sales reps to maintain contacts, track the shipping to verified addresses, and the billing department to create invoices. The main goal of CRM software is to provide ample storage of customer data that can be used to increase sales. It improves customer retention and makes customer relationships more efficient.
The main objective of implementing CRM software in any business is to build customer’s trust and maintain a healthy long-term relationship with customers. It is used to serve in such a way that the customer satisfaction level is maximized.
CRM stores the customer information like name, phone number, address, email, etc. about the existing customers, along with their history of interactions in a single platform. And it handovers the information to the employees, who handles the client so that their expectations are fulfilled.
It may also include information about potential customers about their needs and preferences to create a relationship and provide them better products and services. The software consists of strategies like employee training, relationship building, advertising, etc. that helps to develop the requirements of the clients. ERP integrates with the key areas of the business like purchases, sales, manufacturing, human resources, services, inventory, etc. to smoothen the business processes and flow of information across the organization.
Benefits of Using CRM and ERP Software
1. Unification of accounts and contacts
Both CRM and ERP software store the detailed information of customers, which includes contact information, order history, and billing details. By integrating the two software, you can see all the details for one account at a single platform rather than having a look at the same account with the two different solutions. It will save time on data entry. Instead of updating accounts/contacts in both systems, you will only have to do in one centralized location.
2. Rebate of data duplication
If you’ve used an automated solution such as ERP or CRM software before, you know that duplicate data is the major problem for software users. While ERP software focuses on billing-related and shipping data, CRM software holds customer-centric information and sales metrics. With an integrated approach, you can get rid of duplicate data, and in the present situation, both systems work through the same rules and structure.
3. More robust visibility and forecasting
In the B2B enterprise, sales reps need to be able to access data within the enterprise resource planning software. Sales reps often need to check the status of an order, make changes and know the progress of orders at any time. In terms of forecasting, the integrated ERP and CRM system will naturally provide better data since it’s real-time and always will be as accurate as possible.
4. Cross-departmental collaboration
A significant benefit of both enterprise resource planning and customer relationship management software is the ability to work cross-departmentally, without department silos.
In these business approaches, departments are entirely distinct from one another. A cross-departmental approach ensures real-time data always utilized, and departments are working together to accomplish the same goals.
5. Easy quoting and ordering
A sales rep will be able to raise the quotation from CRM and turn directly into an order in the ERP system without changing and re-enter the data in multiple locations. It will save time and improve company efficiency. Additionally, the sales reps would also have improved visibility into the status/progress of an order for customer updates as well as easy access to make changes if needed.
6. Managing of inventory
For managing inventory, look at the ERP to view the company’s inventory and current costs to get the most accurate quote. It can be based on things like promotional and discount pricing from the CRM. From here, they use the information to make a far more accurate quote to the finished product.
| ERP | Common Features | CRM |
| Accounting | Marketing Automation | Customer interaction |
| Human Resources | Sales Automation | Lead Management |
| Business Intelligence | Task Management | |
| Production | Performance | |
| Procurement | Contact Management | |
| Customer Service | Social Media Integration | |
| Sales | Customer Support | |
| Distribution |
Differences Between CRM and ERP
Even though the core benefits have already been mentioned above. Here are a few functional dissimilarities observed upon the realization of the solutions are given below:
- CRM is a tool for guiding customer relationships and enables them to track every activity associated with the client. In contrast, ERP is the tool to steer versatile transactions within a corporate structure.
- CRM can be a constituent part of ERP since the latter consolidates data from versatile sources represented by functional groups of an enterprise via CRM, HRM, and others. CRM can boast for a longer period of existence compared to ERP.
- Businesses comprise peculiarities of achieving results using both systems. Companies utilize CRM to conduct back-office transactions, while ERP is deployed to accomplish them.
- For managing interaction with clients, you should choose a CRM tool. ERP is beneficial for the optimized utilization of the resource.
- The final difference which discloses the core of both approaches deals with the financial aspect. CRM is a tool to increase sales, while ERP aims at cost reduction.
Which System Do I Need to Choose CRM or ERP or Both?
If you are looking to improve your sales and marketing processes and be productive with the software, then you probably need a CRM software.
On the other hand, if you’re looking to overhaul all your business software in a period. Then you should consider investing in a new ERP tool.
Choosing between these software depends on how robust your lead management and sales tracking requirements are. An ERP helps to streamline a diverse list of processes, with specific capabilities varying from the vendor to the vendor.
On the other hand, CRM typically contains a stronger set of customer-related features than an ERP. And CRM software is the best to bet. If you are going to implement a solution to facilitate workflows aside from CRM in the future. Then you might consider an ERP as it contains a centralized data source and connected business processes.
CRM software focuses on the customer and increases sales as they are the key to a successful business.
ERP software focuses on the business process and the sharing of data between departments. ERP software helps a company to reduce the costs of production and squeeze efficiency out of a business. Therefore, ERP is a much larger solution that must be integrated across the different divisions. For example, the sales data feeds into the production goals, which then feeds into the financial projections, and so on. ERP software may contain a CRM component, but it will be less complex than a dedicated CRM solution. Integrating your ERP into a CRM ensures that the right information is synced to the right customer and prevent uncomfortable mistakes that might sabotage the customer experience.
Conclusion
ERP and CRM software solutions are usually compatible with one another. Small businesses with few divisions may be best served by CRM software, which helps to grow sales, whereas a larger business may go with an ERP, or both, to handle sprawling operations and sales outlets.
Put simply, ERP and CRM software both try to improve a business. CRM focuses on the customer and increasing sales, and ERP focuses on processes and reducing costs.
