Businesses that are unfamiliar with both Enterprise Resource Planning and Customer Relationship Management software may not realize that differences between the two aside from their names. While the two systems may have some overlap in what they do, they have different core functionalities. These valuable systems help to improve revenue, productivity and daily business operations, but their differences are quite drastic.
Let’s cover the differences between both ERP and CRM software.
What is ERP ?
Enterprise Resource Planning is a business management software designed to improve company performance, productivity and the profitability of a business through streamlining business operations. ERP software can be integrated and implemented across multiple departments.
Main features include:
- Automation – performing procedures, such as sending mass emails, with little to no human assistance.
- Streamlining – increasing efficiency by simplifying tasks and passing by unnecessary steps through using modern modeling techniques.
- Analytics – access to graphs and data to ensure accurate data is reported.
- Reporting – ERP develops much needed accurate reports for business usage.
- Accounting – manage and monitor company financial performance with accounting features.
- Improved supply chain management – see a great improvement of the flow of goods and services, turning materials into final products.
- Better collaboration and workflow – having information in one central space for business information improves communication and collaboration when able to share information.
- Stronger data security – ERP provides stronger security to ensure company information remains confidential.
- Improved reporting and planning – accurate reporting improves company credibility and avoids costly mistakes.
- Standardized business processes – simplify operations in order to receive your desire outcome.
What is CRM?
Customer Relationship Management software is designed to capture and manage a company’s interactions and relationships with current and potential customers. CRM enhances relationships through tracking leads and streamlining processes. The overall goal is to increase sales through these interactions.
Main features include:
- Contact management – a complete view of customer contacts, vendors and suppliers.
- Social media tracking – track customers social media activities to help with marketing efforts.
- Lead management – capture, track and nurture leads as they move throughout the sales pipeline.
- Mobile CRM – access to customer information and review opportunities through software mobile app.
- Sales forecasting – estimate future sales to help manage company cash flow and resources.
- Better client relationships – CRM stores information, helping businesses create a better understanding of their clients.
- Increased collaboration – sharing information in one central place (CRM) makes completing work easier and more collaborative.
- Revenue increase – utilizing features including lead tracking can improve sales, bringing in more money for your business.
- Stronger customer retention rates – with customer service functionalities, software users have the potential to retain customers versus losing them.
- Greater marketing – with campaign management, users can manage their marketing campaigns to learn which are most effective in terms of converting into clicks or sales.
- Customer satisfaction – use what you know about your customers to help solve problem quickly and with ease.
Key Differences Between ERP and CRM
- CRM gives users the ability to trace all customer communications and improve upon relationships with those customers. ERP helps a company manage their business processes across a company. The main difference here is what faction of a company each software serves.
- CRM was designed to create campaigns and develop plans to better relationships whereas ERP is meant to execute business operations.
- Marketing and sales departments utilizes CRM more than other departments since those departments interact with customers on a daily basis. ERP focuses more on manufacturers.
- CRM focuses on increase sales while ERP gives an emphasis on reducing overall costs.
How to Decide Between ERP and CRM?
Now that we know the differences between ERP and CRM, it is time to decide which software you need. When making this decision, it is important to think about the areas in which your business is lacking and could use help.
If your business deals with large amounts of inventory, struggles with managing financials and needing to keep up with shop floor changes, ERP will be of great service to your business. Especially helpful to manufacturers, ERP software assists with making sure that business operations run smoothly and on schedule.
On the flip side, if you need assistance with customer service, marketing, lead management and sales automation, CRM is essential for your business. It breaks down the silos between sales and marketing departments, so they can share information meant to bring in customers that can convert into sales. CRM software works for a wide range of industries, especially those dealing with constant customer communication.