The Main Difference Between ERP and CRM - XB Software

Different Approaches to the Same Goal. CRM vs. ERP

| |Reading time: 6 minutes

The world of enterprise software can be tricky sometimes. Especially for those companies that have zero experience in adopting custom-made software solutions intended to improve and automate business processes. It may be a hard task not to get lost in all these ERPs, HRM, CRM, SCM, and other types of systems and choose the one that will become the right solution to your business issues. To make things more transparent, today, we’ll tell you about the differences between CRM (Customer Relationship Management) and ERP (Enterprise Resource Planning) systems. 

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What is ERP

ERP apps focus on the business itself instead of the company’s clients like CRMs do. ERP helps organizations to improve internal business processes, increase their efficiency, and maintain continuous growth. Adding new ERP modules, you can create a comprehensive system that can handle accounting, HR management, supply chain management, and other tasks. ERP enables viewing and sharing business-related info among multiple departments. Employees of different specializations can get access to the system to enter data and create a real-time snapshot of the current state of affairs. 

To avoid any possible issues and delays in the workflow, ERP can automatically send notifications in case of emergencies. For example, if there is a shortage of products in stock, all responsible employees will receive a mobile notification. ERPs help to manage the company itself and improve the efficiency of business processes. ERP systems enable the workflow on business information between different departments and can provide reliable communication channels for better teamwork.

Any organization, small or large, has a lot of moving parts and employees of different specializations. To meet the requirements of various companies, almost every custom ERP  has a modular architecture. Such an approach allows creating a system with unique functionality that suits a particular business organization. For example, software development companies can implement an inventory management module for handling product at their storage locations. Another example is a production management module that can help to manage and control production sites. 

Generally speaking, an ERP solution can work on two levels. ERP as a system or single solution made from scratch can be a good option if your organization doesn’t use any apps of such kind and you plan to apply for the services of a software development firm. ERP as integrated modules for the existing system helps to improve the used business processes without spending resources on development and deployment of a new software solution. In this case, you can add new modules to the application that is already in use.

Here are the main features of such software that can help companies to save money:

  • Automating certain parts of an employee’s work
  • Troubleshooting single-purpose software
  • Ensuring the security of data gathered in one place
  • Creating a single solution for analysis and reporting
  • Simplifying inventory tracking and sales
  • Improving cooperation between employees in different departments.

What is CRM

Dealing with customers is a pretty complicated task due to the enormous amount of involved information. Each new customer generates tons of new records that your business should track continuously. To work efficiently, such data as contact information, lists of purchases, correspondence, and other info should be easily accessed.

The primary purpose of a custom CRM system is to help employees to record, store, sort, and analyze all data related to interactions with customers. The standardized format of data stored in CRM  simplifies its sharing between the different departments. Executives, sales reps, billing department employees, and other staff members can use CRM for adding chunks of information into an enterprise-wide customer database. CRM systems provide easy access to this data and help to increase sales and improve customer satisfaction. CRM systems can be integrated into existing corporate software or any third-party system. Another advantage of a CRM system is the use of analytics tools, intuitive dashboards, tasks tracking solutions, customer relationships mapping, and case studies history. 

Better communication with clients can be ensured by the use of centralized access to documentation, efficient data visualization tools, and reporting modules provided by CRM. As a result, companies can reach better customer information management. Almost any CRM system contains such essential features as contact management, opportunity management, lead management, and prospect management

For What Areas Are ERP and CRM Best Suited 

An excellent choice will be to adopt both ERP and CRM systems since it’ll allow maximizing the efficiency and automate multiple business processes. Both ERP and CRM will help you to reach your goals, but the way to do it will vary. The good news is that in some cases, the question of choice may not even stand before you. Many modern ERP systems include a CRM (and many other subsystems) as an integrated component. The use of such a multi-functional system will allow your business to handle every business issue via a centralized solution. 

It’s always good to have multiple choices, and custom software development companies provide you with them. You can assess your needs and capabilities, check how much does an ERP system cost, and decide whether a comprehensive all-in-one system or a stand-alone CRM/ERP system will work for you better. Here are some tips that you may find helpful. 

ERP systems work great for high-growth companies with a lot of departments or branches. Aggressive acquisition strategies are also considered a good indicator of the need for ERP adoption. If your business uses multiple software solutions, each for a specific task, ERP can provide some benefits as well thanks to a single access point to the enterprise-wide info and functions for its processing. Manufacturers can benefit from adopting an ERP system because of its ability to track suppliers info, bill of materials information, and info on the product life cycle. Inventory monitoring and order management features can be pretty helpful for those companies that sell products

Now, let’s define how CRM development can help your business. CRM solutions are irreplaceable for companies that practice relationship-based selling. It can be any industry, from real estate to car rental. Data analysis and visualization features of CRM allow company management to make data-driven decisions based on sales revenue forecasts and characteristics of deals made. Sales department of an organization can use CRM to access info on recent customers activities and build better relationships. Observing current and predicted trends with CRM, marketers can develop more relevant campaigns. The customer service department can use CRM to receive a full picture of recent purchases and interactions between the customer and your organization. This info can be pretty useful if you want to resolve customer issues on time.

Conclusions

Both ERP and CRM are intended to increase the profits of your business, but to reach this goal, these systems use different approaches. ERP makes business processes more efficient and allows automating most of them. As a result, you can decrease the number of spent resources and efforts. CRM, in its turn, helps to build solid relationships between your company and its clients and produce higher sales volume. CRM solutions provide centralized access to the customer data and functions that allow manipulating it with a couple of clicks. Using these features of CRM, you can achieve better brand loyalty and increase your profits.

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Victoria Stanishevskaya

Victoria Stanishevskaya

XB Software content marketing manager and video editor. Every bit of content she produces on this site oozes with passion, intelligence, and resourcefulness. These key traits are sewn into the fabric of Victoria’s success.