Businesses looking to automate core business processes typically look at two main software solutions, enterprise resource planning (ERP) and customer relationship management (CRM). ERP helps companies run successful businesses by connecting their financial and operational systems to a central database, while CRM helps manage how customers interact with their businesses.

But when do you need ERP and CRM? This article will help identify the differences between ERP and CRM, when your business may need them, the benefits of each system, and if your business may benefit from having one or both systems.

What is ERP?

ERP stands for Enterprise Resource Planning. The simplest way to define ERP is to think about all the core processes needed to run a company: finance, manufacturing, HR, supply chain, services, procurement, and others.  Businesses can opt to use ERP SaaS (Software as a Service) applications to address individual processes, or enlist an entire system, which includes a complete suite of ERP applications that communicate across one another to help businesses more effectively manage their operations.

There is a plethora of ERP solutions available in the market but finding a perfect fit for your business is essential as it directly affects the growth and profitability of your business.

A variety of industries can benefit from ERP Software including:

  • Industrial Equipment and Components
  • Hospitality
  • Food and Beverage
  • Electronics and Technology
  • Healthcare, Pharmaceutical and Life Sciences
  • Construction and Home Improvement
  • Automotive
  • Aerospace and Defense
  • Agribusiness, Farming and Agriculture
  • Retail and Consumer Goods

What are the Benefits of ERP?

ERP software simplifies and automates common business activities. An ERP software system allows for better performance and project management that helps plan, budget, predict and accurately report on an organization’s financial health and processes. ERP systems also enable businesses to connect and streamline every aspect of their enterprise.

Further business values of ERP systems include:

  • Enhances efficiency in an organization by eliminating and automating repetitive processes.
  • ERP help to reduce administrative and operational costs by streamlining complex systems.
  • Cost savings due to automation and integration that leads to increased efficiency and productivity.
  • Better management and monitoring of compliance with regulatory standards.
  • A reduction in human errors and improperly spent time and resources.
  • Improved partner and supplier management.

What is CRM?

A CRM stands for (Customer Relationship Management). CRM system is a technology for managing all your company’s relationships and interactions with customers and potential customers. The goal is simple: Improve business relationships to grow your business. Today, CRM software can be used to manage a business’s customer relationships throughout the entire customer lifecycle, from marketing to sales to digital commerce and customer service.

CRM tools are helpful for a variety of departments within a company, including recruiting, marketing, sales, business development and customer service. By using CRM software, businesses can organize customer and prospect information to build stronger, more personalized relationships with them and better organize their interactions during the consideration process.

Generally, CRM software collects customers’ relevant contact information, including telephone numbers, email, websites, and social media data. It can store details about each contact, such as communication preferences, helping businesses not cross a contact’s outreach boundaries. In addition to what these tools can store, they also log customer interactions to better monitor the relationship.

What are the Benefits of CRM?

As with ERP, there are many valuable business benefits of CRM. Primarily, it enables your business to become more customer-focused, which in turn enables you to be more profitable. CRM technology gives you a clear, bird’s eye view of your customers while also helping you drill down into their individual preferences, needs, requests, issues, dislikes, how they’re responding to marketing campaigns, what they’ve purchased and more — all in one easy-to-navigate database. With this information stored under a unified dashboard, all users across your company can participate and stay informed. Not only does this optimize functions for the business, it also provides a more personalized and consistent experience for the customer.

Ultimately, enlisting a CRM system cuts unnecessary costs while increasing profits. Customer information funnels into a business through a variety of different sources, including sales phone calls, marketing forms, emails, social media networks, customer support calls, website chats and external sales meetings.

For businesses of all sizes, this level of visibility provides valuable business-enhancing insight. For small businesses, having CRM software can fill roles that would normally require hiring additional team members, which is beneficial for smaller companies that need to conserve resources.

What’s the Difference Between ERP and CRM?

The primary difference between ERP vs. CRM is that, essentially, one organizes processes, and one organizes people. The table below identifies what each system is designed to manage and help businesses improve upon.

ERP vs CRM

ERP Software

  • Project Planning
  • Standardized Business Procedures
  • Data Reporting and Accuracy
  • Task Automation
  • Supply Chain Management
  • Accounting
  • Manufacturing
  • Human Resources
  • Order Processing
  • Production Management
  • Warehouse & Inventory Management

CRM Software

  • Marketing Campaigns
  • Lead Prioritization
  • Sales Processes and Pipelines
  • Internal Collaboration
  • Customer Data Collection and Reporting
  • Customer Support

What are the Similarities Between ERP and CRM Systems?

The differences between ERP and CRM tools are easy to spot, but there are many similarities as well. Though different in their primary focuses, both system types provide businesses with:

  • Increased reporting
  • Operational efficiency
  • Improved internal and external communication and collaboration
  • Business growth and increased profitability
  • More informed decision-making
  • Better use of resources
  • Work-from-anywhere capabilities when using cloud-based systems
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