In the age of technology, organizations have access to an increasing range of digital tools to manage their businesses. Among these tools are enterprise resource planning (ERP) and customer relationship management (CRM) systems. While it can be difficult to understand the differences between the two, they are both incredibly valuable tools that can help businesses stay competitive and increase their efficiency. In this blog post, we’ll explore the differences between ERP and CRM systems, compare their features, and discuss the advantages of each. We’ll also provide best practices for organizations to make sure they get the most out of their ERP and CRM systems.
CRM vs ERP – What’s the Difference?
What is CRM?
Customer relationship management software optimizes customer interactions with your business. CRM (customer relationship management) software aids businesses in managing their customer service, marketing, and sales departments or operations. With CRM software, businesses can more easily analyze their customer data, track potential leads, automate sales operations, and carry out other tasks that improve the effectiveness and mutual benefit of their customer interactions.
Typical CRM program features include:
What is ERP?
Businesses use enterprise resource planning software for their accounting and operational systems. The majority of ERP functions are associated with a company’s financial department and its operations, including accounts payable, supply chain management, and payroll. Many ERP programs also integrate with other business processes like project management, supply chain management, or human resource planning.
Typical ERP program features include:
ERP vs. CRM
The following are some significant ERP and CRM software parallels and differences:
Financial management
ERP software primarily manages, tracks, arranges, and streamlines financial data and procedures within an organization. Features like general ledger, fixed assets, accounts payable, and supply chain management are frequently included in its financial operations.
Since it is not its primary focus, CRM software only provides a limited amount of financial management. It only records financial data regarding marketing or sales endeavors. It may monitor certain financial information pertaining to sales, including return on investment (ROI) or the profitability of different products. Based on your prior financial successes, some CRM programs can then suggest potential leads, product development concepts, or marketing strategies for you.
Customer-centered features
CRM software’s main objective is to optimize customer interactions, whereas ERP rarely does.
Businesses can streamline a range of operations and workflows related to their marketing, sales, and customer service departments or departments with CRM software. These procedures may involve sharing marketing materials, automating some customer service features, developing target customer profiles based on accumulated data, and tracking customers’ purchasing patterns.
Scope
ERP software has a wider scope than CRM software. Programs for enterprise resource planning (ERP) can assist your company with a wider range of tasks, departments, and operations, including accounting, inventory, and human resources-related initiatives. The connections between various business aspects are often improved by ERP programs in order to decrease organizational waste and streamline processes.
For your sales, marketing, and customer service operations, CRM software, however, may offer more specialized or customized features.
However, CRM functions offered through an ERP program typically provide less customization than a CRM-specific program. Some ERP programs also include CRM functions or applications, such as optimizing interactions with your leads and customers.
Deployment
ERM and CRM software have similar operational systems. Using a relational database, your company can both store, organize, and analyze its information. This makes it simple for the database to share and incorporate data into numerous processes or functions. For instance, revenue-related data can be stored by ERM and CRM programs and used for a variety of projections or evaluations.
Programs for CRM and ERP may use similar deployment strategies. Some businesses may opt to house their CRM or ERP systems and databases on their premises. Others may decide to use a cloud service provider to access their CRM or ERP software.
Warehouse features
Utilizing warehouse management software, businesses can track inventory levels, distribution routes, regulatory compliance, and quality assurance.
CRM software rarely stores or analyzes data pertaining to manufacturing and warehouses because it is customer-focused.
Goal
The overall objective of ERP and CRM software is to improve a company’s various operational efficiency and boost profitability. However, the specific goals of both these programs vary.
In order to increase productivity and revenue, ERP systems typically work to reduce operational costs and organizational waste. Meanwhile, CRM programs typically concentrate on boosting sales volume, prioritizing leads, and increasing customer engagement.
Tips for choosing ERP vs. CRM software
You can use the following advice to determine whether ERP, CRM, or both will best suit your business’s needs:
Evaluate your current processes
Examine the software and other tools your company currently uses for classifying, storing, and analyzing data. Think about how well they work and whether any procedures could be made more effective. For instance, if your financial department currently manages a number of spreadsheets, the integration features provided by an ERP database may make it simpler to access and analyze that data.
Determine your companys needs
Determine your company’s priorities, desires, and objectives with regard to your operational systems. For instance, CRM software that gathers, evaluates, and prioritizes information on which leads to pursue first may be advantageous for a new business that focuses on converting leads into paying customers. However, a bigger business with a well-known brand may decide to use ERP software to help minimize organizational waste.
Consider long-term possibilities
Consider how your company’s requirements, objectives, or priorities may change over the coming months or years. Both CRM and ERP software can be used for long-term growth and development in addition to assisting with short-term priorities. For instance, ERP software can ensure that various branches or operations stay focused on the same goals and share access to similar information if you anticipate your business to grow quickly over the next few years.
You can use both
Remember that your business can use both ERP and CRM software when you’re deciding between the two. Both initiatives help many businesses increase productivity and revenue. An integrated ERP system with some CRM features is another option. As long as your business doesn’t require the more customizable CRM features provided by CRM-specific software, this can be a great third option.
FAQ
Is Salesforce an ERP or CRM?
Although the entire organization will eventually rely on both ERP and CRM systems, the main distinction between the two is that while CRM is used by the sales and customer service departments, ERP is primarily for financial data and the finance department.
Is SAP an ERP or CRM?
Salesforce is not an ERP. Salesforce does not offer an ERP product, but it does provide a variety of business solutions that can be integrated to improve and support your ERP. Customer 360, the top-ranked CRM system in the world, is at the core of Salesforce.
Which is best ERP or CRM?
It is used to implement and customize business processes related to customer relationship management (CRM) and to integrate with SAP and non-SAP systems. SAP CRM is a component of the SAP ERP (Enterprise Resource Planning) business suite.
