The Difference Between CRM and ERP

CRM and ERP are two important technology acronyms that businesses need to know about. Both are valuable business software solutions but they are used to manage and achieve very different business goals.

What Exactly is CRM?

CRM is an abbreviation for customer relationship management and is a phrase used to describe all aspects of interaction that a company has with its customer, whether it is sales or service-related. It’s a business strategy that helps your business to better understand your customer, retain customers, provide excellent customer service, win new clients and increase profitably.

CRM entails all aspects of interaction that a company has with its customer, whether it is sales or service-related. CRM is often thought of as a business strategy that enables businesses to:

  • Understand the customer
  • Retain customers through better customer experience
  • Attract new customer
  • Win new clients and contracts
  • Increase profitably
  • Decrease customer management costs

Many aspects of CRM relies heavily on technology. CRM software will collect, manage and link information about the customer. You can use CRM software to create marketing campaigns, view a customer’s entire of history of interactions with your business and use it to streamline daily business and sales tasks.

What is ERP?

ERP is an abbreviation for enterprise resource planning. ERP software is used to manage the business or is business process management software that allows an organization to use a system of integrated applications to manage the business and automate back office functions. It integrates all facets of an operation, including product planning, development, manufacturing processes, human resources, financials and sales and marketing.

Today’s ERP solutions are designed to help you to improve the operational efficiency of business resources. Businesses use ERP systems to integrate all its business processes into a single system to efficiently and effectively manage business goals.

ERP Software Modules

ERP software typically consists of multiple enterprise software modules that are individually purchased, based on what best meets the specific needs and technical capabilities of the organization. Each ERP module is focused on one area of business processes, such as product development or marketing. A busines scan use ERP software to manage back-office activities and tasks including the following:

Distribution process management, supply chain management, services knowledge base, configure, prices, improve accuracy of financial data, facilitate better project planning, automate employee life-cycle, standardize critical business procedures, reduce redundant tasks, assess business needs, accounting and financial applications, lower purchasing costs, manage human resources and payroll.

Some of the most common ERP modules include those for product planning, material purchasing, inventory control, distribution, accounting, marketing, finance and HR.

As the ERP methodology has become more popular, software applications have emerged to help business managers implement ERP into other business activities and may also incorporate modules for CRM and business intelligence and present them as a single unified package.

The basic goal is to provide one central repository for all information that is shared by all the various ERP facets in order to smooth the flow of data across the organization.

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The Differences Between CRM and ERP

While specific features and capabilities differ between platforms and vendors, here’s a quick list of some of the many activities each type of business software can help you improve:

Use CRM Software to manage any of the following front-office activities:
Organize marketing efforts, manage the sales pipeline, calculate time spent on converting leads to closing deals, streamline your sales processes, automates customer service, track a customer’s interactions with your business, share marketing and sales collateral, create data reports, learn which products sell best and when, prioritize leads, manage inventory based on historical sales data, collaborate to sell as a team, manage your business contacts, manage your business leads, share customer profiles with co-workers and See where leads come from.

Use ERP Software to manage back-office activities and tasks including the following:
Distribution process management, supply chain management, services knowledge base, configure, prices, improve accuracy of financial data, facilitate better project planning, automate employee life-cycle, Standardize critical business procedures, reduce redundant tasks, assess business needs, accounting and financial applications, lower purchasing costs, manage human resources and payroll.

Integrating CRM and ERP Systems

There are many solutions available today that integrate ERP and CRM solutions to combine financial, operational, customer relations and business intelligence in one management system. Typically, CRM and ERP solutions are data silos in an organization, but when you integrate the systems to share data it can further improve operations management.

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