ERP VS CRM
By: Chinmay Shah
Tags: Customer Engagement, Crm Software, Erp Software, Supply Chain, Cloud Services

ERP VS CRM

Customer Relationship Management (CRM) software and Enterprise Resource Planning (ERP) software are similar in many ways. Both can be used to increase the overall profitability of a business.

These systems overlap in some areas and can fully integrate into others. However, as their core functionalities are different, It is best for a business to first look at them as separate systems. So, now it is easier to see how both are playing a role in improving efficiency and increasing sales.

What is CRM?

In simple, CRM is a system and process to manage business interactions with current and potential customers. We usually are talking about CRM Software. Which is used to organize data, automate and synchronize sales, marketing, and customer service.

CRM developed to include all areas of the customer life cycle. It is the process of identifying prospects, nurturing them, and guiding them through the sales process to close the business. Once they are a customer, make sure that you maintain that relationship and encourage repeat business – either upsell or cross-sell.

What is ERP?

ERP is used to manage the business. ERP is a system to improve the efficiency of business operations. ERP synchronized all the departments, Which allows for the rapid sharing of information throughout all departments. ERP system, collect all the real-time, department-wise information. It helps while issues in any area will automatically create alerts in other affected areas. It allows departments to begin planning before they become a problem. In short, ERP streamlines the business's operations across the workflow, Which allows the company to focus on the data instead of the process.

Key Differences

When deciding between CRM or ERP, you should know that both systems use different approaches to increase profitability. Now it is necessary to consider the differences between the two systems.

ERP can help business processes across many different workflows, meaning that if you are looking to invest in systems that will benefit finances, warehouse, HR, and other operations, an ERP might be a good option. On the other hand, CRM is a more customized solution. Agree, many ERP solutions include basic CRM functionality, but the number of customer-related features included in a CRM is much better than those featured in an ERP. Ultimately, the main difference between them is scope. In the battle of ERP VS CRM, it is essential to focus on your business needs comprehensively and to determine what specific functionality you need from your solution.

Basic Functions of CRM

● Design marketing efforts.

● Manage the sales pipeline.

● Calculate time spent from prospect to customer.

● Streamline sales processes.

● Automate customer service.

● Track customer interactions within your business.

● Create data reports.

● Learn about the best selling products, when and why.

● Prioritize leads.

● Manage inventory based on historical sales data.

● Collaborate with a team to sell.

● Manage your business contacts.

● Manage your business leads.

● Share customer profiles with co-workers.

Basic Functions of ERP

● Human Resource Management

● Customer Relationship Management (CRM)

● Inventory Management

● Supply Chain Management

● Distribution process management

● Services knowledge base

● Improve the accuracy of financial data

● Facilitate better project planning

● Standardize critical business procedures

● Reduce redundant tasks

● Assess business needs

● Accounting and financial applications

● Lower purchasing costs

● Payroll

Explaining a CRM system (why do we need CRM?)

CRM develops to record and store information regarding customer interactions. The data is standardized and easily shareable within the organization. e.g., If a company sales rep has a call with a prospect, they might enter new information such as contact details and notes about the conversation.

Then, a marketing person might use the same information to tailor a new, personalized newsletter. All they have to do is pull up all the records in the CRM. With the right system, businesses can organize and segment every single aspect of the customer experience.

Moreover, CRM systems can create sales forecasts, can nurture the leads through the sales funnel, can manage communication, and more. A CRM increases efficiency, grows sales, and offers more accuracy with customer data. As a result, customer relations enhance.

Explaining an ERP system (why do we need ERP?)

ERP software creates to streamline business operations. An ERP system is connected and performed across multiple departments.

At its core, an ERP system offers interconnected control of specific business processes. So, you can get regulated information from every department in real-time. Every issue is sent alerts to assigned recipients.

The business can focus more on data and less on processes. That is how a company resolves fewer errors and can make better decisions.

ASSIGNING IMPORTANCE

Deciding which system is more important is like choosing between having an engine or having a steering wheel in a car. CRM is the engine that drives business, which improves sales and increases profits. ERP is the steering wheel. It allows a company to be guided with proper direction and to steer around obstacles well in advance. ERP and CRM working together make it much easier for a company to increase revenue while reducing costs.

Standalone CRM vs. Integrated ERP (WHICH COMES FIRST?)

Sometimes it is hard to choose between both because we know that ERP contains CRM than why go with standalone CRM? Choosing between these depends on how robust your lead management and sales tracking requirements are. An ERP is a helpful solution because it streamlines a diverse list of processes, with specific capacities varying from a vendor to a vendor. On the other hand, a standalone CRM typically contains a set of customer-centric features than a CRM included in an ERP solution.

Therefore, if you only require CRM functionality and don’t need streamlined operations in other business areas such as finance, Supply Chain Management, and distribution, CRM software may be best for you. However, if you wish to scale your business shortly, better consider an ERP because it contains a centralized data source and connected business processes.

And, if you have complex CRM needs, it is better to consider a standalone solution due to the variety of features associated with these programs.

Conclusion

CRM and ERP are both exceptional tools for optimizing revenue.CRM mainly deals with sales & marketing helps the organization to know about the preferences of the clients and develop trust. ERP is a comprehensive solution that centralizes front- and back-office processes so that they can freely share information and communicate with each other on a real-time basis through a single computerized system.

The software which is best for your business depends on the scope of your needs and the amount of investment that you’re willing to make.