ERP vs. CRM: Know The Difference Before Making Your Choice
Modern day businesses face a variety of challenges on a daily basis. Managing high-volume client communications, overseeing and maintaining inventory, making sure raw materials are available for production, all these tasks constitute the daily grind of running a business. Almost every company strives to make their operations more efficient, optimizing them for maximum output.
CRM and ERP software are the two most common types of software used for managing day-to-day business operations. While the two systems perform similar functions, they help tackle different challenges and work towards different goals. If you would like to learn what makes these two solutions different, this article is for you.
What Is ERP Software?
ERP (or enterprise resource planning) software is an integrated system that streamlines various business processes with the goal to improve productivity and increase output. The software can come as a pre-built solution with commonly used modules. It is also offered as a custom solution built from scratch to suit the needs of a particular business. The use of ERP software is not limited to the size of the organization. Businesses small and large can equally benefit from using the software.
Advantages of ERP Software
Before we get to reviewing the benefits, it is important to regard ERP software as a central hub from which all business processes are managed. Finances, inventory, supply chain, manufacturing - all these tasks are controlled through a single platform.
1. Remote access to information, anytime, from anywhere
Many ERP software solutions are cloud-based nowadays. This means that data stored on the cloud can be accessed anytime from any internet-enabled place. Such a feature is particularly useful for businesses with multiple branches or employing remote workers.
When we compare an ERP system vs. CRM, the latter can, too, be configured to provide remote access to information.
2. Visibility of business operations
The ability to access and oversee all business processes through a single software is a major advantage for businesses comprising multiple departments. For example, an employee from the accounting department can see how much inventory is available, and vice versa. Such open-access data availability significantly improves collaboration between the departments, further streamlining business operations.
ERP software solutions, especially custom ERP solutions, are designed to grow with the business. Integrating additional modules or adding more users is an easy process that can be done at any time. The ability to scale provides business owners with the peace of mind that their software is able to meet the changing demands of the business.
What Is CRM Software?
Unlike ERP software, which is designed to handle internal processes in the company, CRM software is geared towards managing client relationships. CRM is a technology businesses use to stay connected with potential and existing customers with the goal to grow and maintain a steady client base.
Advantages of CRM Software
Effective customer database management is one of the crucial aspects of successful business operations. When your customers’ inquiries are handled on time and with proper attention, chances of converting these customers into loyal clients increase significantly. This is where CRM software plays a vital role.
CRM software acts as a base for building and maintaining relationships with customers. Moreover, it also serves as an effective internal communication platform where employees can record their interactions with customers, allowing other team members to monitor the communication thread. Below are some other benefits CRM software has to offer.
1. Automated data entry
CRM software’s automation feature is as relevant as ever. The software automates tasks such as logging emails, meetings, calls and client interactions, allowing staff members to focus on more important tasks. Comparing ERP vs. CRM software, the former, too, has a number of automation features. However, those serve far more broader purposes than just customer relationships.
2. Comprehensive client profile
CRM software is the place where all customer data is stored securely. Information such as contact details, website, social media accounts, birthday can be accessed instantly, thus allowing employees to personalize their communications with customers.
3. Forecasting and analytics to improve sales
One of the unique features of CRM software is that it allows collecting data about prospects and campaigns, providing an eagle eye view on the campaign progress. Sales managers are able to identify the most effective marketing campaigns, making more accurate projections for the upcoming months.
What Is the Difference Between CRM & ERP?
Both ERP and CRM systems are used to streamline business processes. Both systems help improve productivity and increase the company’s bottom line. So, what is the difference between the two systems?
ERP software is used for managing back-office business operations such as finance, HR, inventory and production. CRM software is geared towards improving more of the customer service side of the business.
To give you a broader picture of the difference between ERP vs. CRM, CRM is a smaller unit taking care of customer relationship processes, whereas ERP is a broader system that supports many different departments, e.g. financial, inventory and production management.
Can CRM be integrated in ERP? Yes, a CRM module often constitutes a part of a broader ERP software system. You are not likely to find it in ready-to-use software. So, if you are looking to get an ERP system with an integrated CRM module, consider a custom-built ERP system.
If price point is a determining factor for you, consider the cost difference between CRM and ERP software. According to a source, the average cost of ERP software per user per year is $150, whereas the average cost of CRM software per user per month is between $10 to $30. Knowing the cost of each software in advance is important but should not be regarded as the key factor. Your decision should be primarily based on your company’s requirements and the goals you are trying to achieve.
ERP vs. CRM: How to Choose Between the Two?
As you can see, ERP and CRM are two different systems, although with many similar features. Choosing one or another should be guided by your particular business needs and requirements.
If your goal is to streamline customer relationships only, CRM software would be your best bet. If you aim to improve your overall state of affairs in your organization, consider a comprehensive ERP suite. And if you are looking for a broader operations management software with built-in CRM features, consider booking a consultation with a custom software development company to discuss a fully custom ERP solution.
Regardless of what you opt for, your goal should be to find a software that will help you solve the challenges hindering the development of your organization.