What is the Difference between ERP and CRM
A lot of people confuse a customer relationship management system and enterprise resource
planning software and believe they are the same thing. In fact, these are two different tools
that have different functions.
So, let’s explore the difference between ERP and CRM.
ERP vs. CRM software is the ultimate choice managers have to make. Though both solutions are aimed at similar goals, these are still two different systems, and each one has its pros and cons. So, which solution will work best for your business? In this article, we will dive deep into the specifics of ERP and CRM management services, discuss the benefits of both software and help you understand which one will work best for you.
CRM Systems
CRM software is quite a popular solution for customer management, marketing, and arranging various work processes within a company. As a matter of fact, a CRM service is quite comprehensive and universal and can assist in various aspects of your business, so let us talk about CRM systems in more detail.
What Is a CRM?
First things first, let’s define a CRM solution to get a better understanding of what this service really is. So, basically, a customer relationship management (CRM) system is software designed to assist businesses in managing and improving their interactions with customers. A classic CRM usually has the following functionality:
-
Storing customer info
First of all, a CRM software stores all the important information about customers, including purchase history, contact details, preferences, etc. -
Tracking customer interactions
As a rule, a CRM service records all the interactions with every customer, meaning such touchpoints as support tickets or sales calls will be recorded and stored.
-
Marketing automation
A CRM service can also assist in marketing automation since it helps launch targeted campaigns, lead nurturing, and arrange email newsletters. -
Sales management
Thanks to the customer info CRM stores, it helps automate sales, as well as track deals and manage sales pipelines. -
Customer service
Lastly, CRM software will help you handle customer inquiries and significantly improve the work of your customer support service.
A CRM system is indeed a reliable ally that will help you bring customer management to the next level, and it’s surely worth the money spent.
Benefits of a CRM System
As you might have already guessed, a CRM system has plenty of benefits and reasons to get it. So, let us briefly talk about the most significant advantages of CRM software.
-
Ability to understand your customers
A CRM system stores all the important information about each of your customers, which, obviously, helps you better understand your customers, their needs, demographics, and shopping habits and, therefore, find the right approach to every client and boost sales.
-
Customer satisfaction improvement
Since CRM software stores all the info about a customer, including all the inquiries, it’s easy and quick to find any information about any order and solve customers’ issues, which results in customer satisfaction improvement.
-
Ability to make data-driven decisions
Detailed customer info, such as demographics and shopping preferences, which is available within a CRM, will allow you to make data-driven marketing decisions and boost sales.
-
Efficient sales process
A CRM system is a great way to automate sales and track deals, which obviously contribute to revenue growth.
-
Sales and revenue growth
Better customer experience, tailored email marketing campaigns, loyalty programs, and efficient sales process are all the benefits of a CRM system, which lead to one and perhaps most important benefit — sales and revenue growth.
It is needless to say, a CRM system like Germius has a lot of pretty important advantages, which definitely make it worth using.
ERP Systems
Though ERP systems are similar to CRM software, these tools are used for completely different purposes. Moreover, a lot of businesses need both of these services. So, what is an ERP? How does it work? And why does your business need one? Let’s discuss ERP systems in more detail.
What Is an ERP?
An enterprise resource planning system, or simply ERP, is a special software designed to
ease the workflow within a company and integrate different business processes into a unified
system. Just like a customer relationship management system, ERP software has several key
functions that include:
-
Financial management
An ERP usually allows businesses to manage their accounting, budgeting, financial reporting, and forecasting within the system. -
Supply chain management
Unlike a CRM, an ERP is a great means to monitor and manage procurement, production planning, inventory, and distribution.
-
Human resources
An ERP service is also a great way for a business to manage its employees and monitor time and attendance, payroll, benefits, etc. -
Customer relationship management
Yes, an ERP system usually has a CRM within it, so it is possible to manage your customers and sales within an ERP service. -
Project management
Last but not least, an ERP system is a rather useful tool for project management and it helps keep track of various departments, projects, and work processes of your business.
All in all, an ERP system is quite complex software that has plenty of functions and features. As a matter of fact, an ERP has pretty much all the functionality a business needs, but does it mean that an ERP eliminates the need for a CRM system? We’ll talk about that a little bit later.
Benefits of an ERP System
Certainly, an ERP system has a lot of benefits, which makes it worth your attention. So, Let’s take a look at the most crucial pros of an ERP CRM system:
-
Efficient business operation
An ERP system is a great means to efficiently organize all the processes in your company and easily keep track of every little aspect. -
Improved customer satisfaction
The better the workflow within your company is organized — the more satisfied your customers are, and an ERP system provides you with that. -
Better decision-making
An ERP service provides comprehensive information about various aspects of your business, which enables you to make data-driven decisions, provide efficient forecasts, as well as measure performance. -
Cost reduction
Finally, an ERP system is a great way to cut costs thanks to such functionality as inventory management, supply chain optimization, and procurement efficiency.
The benefits of an ERP system are undeniable, but can it really completely substitute a CRM service? Let’s talk about the differences and similarities between ERP CRM business solutions and CRM systems to answer this question.
CRM vs. ERP: Key Differences
ERP vs. CRM system — which one should you choose? To answer this question, we need to understand the key differences between ERP and CRM software solutions. Thus, let’s compare the two systems.
At first sight, ERP system vs. CRM seems like a dilemma that cannot be solved. Yet, in fact, it is way easier to solve than it might seem. You see, a CRM system is required for managing your customers and interaction with them, as well as for sales and certain marketing tasks. At the same time, an ERP is mainly a system for internal business processes, such as human resources or supply chain management. Though many modern ERP services already have CRM systems within them, they are still two different services that have different goals and functionality.
| Hallmark | CRM System | ERP Service |
|---|---|---|
| Goals | Customer satisfaction, sales growth, customer retention | Business process optimization, cost reduction, efficiency improvement |
| Focus | Customer relationships and interactions | Managing business processes |
| Departments | Sales, marketing, customer service | HR, finance, supply chain, manufacturing |
| Data | Customer info, purchase history, preferences, and interactions | Production, inventory, HR, financial data |
ERP vs. CRM: Which One Is Right for Your Business?
Now that we know all the details about both CRM and ERP, it’s time to return to the main question of our article — an ERP system or a CRM service? Well, as we have already mentioned above, these are two different services that are used for different purposes. Though most modern ERP solutions have built-in CRMs, we still cannot say that an ERP can completely substitute a customer relationship management service. The thing is, CRM functionality within an ERP is often rather limited, and getting a full-fledged customer relationship management service is more reasonable in some cases.
Thus, our recommendation would be the following: if you have a small business and you want all the processes to be in one place, an ERP is perhaps the best choice for you; in case you have a big company, and you want a sophisticated CRM system, separate CRM and ERP solutions are the way to go for you.
Conclusion
Both CRM and ERP systems are of high importance for businesses of various types and sizes, so neglecting these services is just not an option. Whether an ERP will be enough for your business or you need both CRM and ERP is up to you to decide. The most important thing here is to select the very service that will help you boost your sales and increase your revenue.
