Many prospective buyers ask for the difference between the two and which one they need, and, because these software suites solve complex business objectives, the answer isn’t always super obvious.
So what is the difference between CRM and ERP? On a basic level:
ERP stands for Enterprise Resource Planning. It’s heavy-duty software that touches every aspect of operations. You can purchase a single suite or build your own out of different modules from a variety of vendors. The computerized software collects information from various departments of the organization, records & integrates and interprets it to both internal and external management of the organization. ERP integrates 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.
ERP Software commonly features:
- Accounting: manage financial transactions and payroll
- Business Intelligence: analyze and report data to help companies make evidence-based decisions
- CRM: more on this below
- Human Resources: manage personnel, benefits administration, employee evaluations, and learning management
- Inventory: provides up-to-date information on product supply
- Manufacturing: at the core of ERP
- Supply Chain: tracks goods as they move from manufacturing to distribution
CRM stands for Customer Relationship Management, and it’s used by sales, marketing, and business development departments to manage interactions throughout the customer life cycle. CRM Software typically includes:
- Marketing Integration: lead management, email marketing, and campaign management
- SalesForce Automation: contact management, pipeline analysis, sales forecasting, and more
- Customer Service & Support: ticketing, knowledge management systems, self-service, and live chat
- Field Service Management: scheduling, dispatching, invoicing, and more
- Call Center Automation: call routing, monitoring, CTI, and IVR
- Help Desk Automation: ticketing, IT asset management, self-service and more
- Channel Management: contact and lead management, partner relationship management, and market development funds management.
Key Differences Between CRM and ERP
Despite the fact that the core difference has already been mentioned above, it is not a single one. Practical dissimilarities observed upon the realization of the said solutions are given below:
- Tool for guiding customer relationships enables the tracking of every activity associated with clientage. ERP, in turn, is the tool to steer versatile transactions within a corporate structure;
- CRM can be a constituent part of ERP since the latter consolidates the data from versatile sources represented by functional groups of an enterprise via CRM, SCM, HRM, and others;
- ERP can boast of a longer period of existence compared to CRM;
- Another answer to the question “what is the difference between ERP and CRM?” comprises peculiarities of achieving results using both systems. Companies utilize CRM to conduct back-office transactions while ERP is deployed to accomplish them;
- If you need to manage interaction with clients, you should choose a CRM tool because ERM is beneficial for scheming the optimized utilization of resources;
- The final difference that discloses the core of both approaches deals with the monetary aspect. CRM is a tool to increase sales while ERP aims at cost reduction.
Which System to Choose?
To answer this question, you have to realize your goals, the current state of affairs, and the difference between CRM and ERP. However, do not forget an old saying “never too much of a good thing”. It means that you can always do better even if it seems that the threshold of perfectionism is achieved. The best option is to implement all possible technological innovations to make your pipeline transparent, optimized, and performant. Any of the said technologies have numerous benefits: