CRM (customer relationship management) and ERP (enterprise resource planning) are two of the most common software applications used in the business world today. But what is the difference between CRM and ERP, and why is each important?
In this post, we will explore the features of each application, as well as how they can benefit your business.
An Overview of CRM and ERP
CRMs and ERPs are designed to help organizations manage their customer relationships and, more broadly, their operations but what is CRM and ERP? Let’s find out.
Customer Relationship Management System
A CRM (customer relationship management) system is a software application that helps businesses manage and track customer relationships. It allows companies to easily collect, organize, and analyze customer data to make better decisions about marketing, product development, and other business operations.
CRMs can be divided into two main categories: contact centre-based systems and sales force automation (SFAS) systems.
- Contact centre-based CRMs are designed for use by call centres or front-end support teams. They include features such as online forms processing, automated routing of calls to the right agent, automatic recordkeeping of interactions with customers, and notification emails sent when important updates or changes are made to a customer's account.
- Sales force automation (SFAS) systems allow companies to automate tasks related to sales processes such as lead generation, follow-up calls after leads have been contacted, and pricing analysis.
Entity Resource Planning System
An ERP (enterprise resource planning) system is a software application that helps businesses manage their resources and operations. It enables companies to track expenditures, inventory, and sales data; create reports and dashboards; optimize processes, and automate business tasks.
By streamlining these vital functions, an ERP system can help businesses run more efficiently and effectively.
There are several different types of ERP systems available on the market today, each with its unique features and benefits. Some popular examples are as follows.
- SAP AC Milan is an Enterprise Resource Planning system used by organisations such as PepsiCo.
- Microsoft Enterprise Resource Planning is used by big companies such as Walmart.
- NetSuite Enterprise Resource Planning is used by Workable.
The Difference between ERP and CRM
Now that we know that ERP and CRM are used by successful companies to run their businesses successfully, it is essential to understand the difference between the two. Here’s a quick ERP vs CRM comparison to enhance your understanding of each system.
ERP systems were originally designed as a way for companies to manage their entire operation from one centralized location. Today, ERP systems have evolved into much more than just enterprise resource planning software - they can also include features for marketing, finance, human resources, and information technology departments.
CRM systems are still primarily focused on customer interactions though. They help businesses track customer data such as contact information, billing history, and product inventory levels. With this information at hand, businesses can better understand customer needs and build relationships that will last long-term.
In general, ERPs are more complex than CRMs because they offer more features and flexibility in terms of how businesses can use them. However, CRMs can be more efficient when it comes to managing customer information since all correspondence with customers is automatically captured within the system.
Additionally, CRM systems often provide deeper insight into past interactions between consumers and businesses to enable improved decision-making in the future.
Final Thoughts
ERP vs CRM, which is better for your business? That depends on several factors including the size and complexity of the organization, the type of industry you're in, and your current IT capabilities.
However, whichever system you choose should be integrated with other essential business functions such as accounting and shipping/purchasing
