CRMs and ERPs are both vital management tools. Although they offer different functions, they can also overlap to some extent. If you are asking what the difference is between CRM and ERP, the answer is simple but complex at the same time.
Putting it simply, CRMs are used to manage customers’ experiences. They are designed to increase profitability for companies. Meanwhile, the ERP handles all aspects of a company’s business.
These include production, distribution, human resources, budgeting, and more. The objective is to boost productivity. Overall, ERP manages the back office. On the other hand, CRM deals with the front office, which communicates with customers.
If you are searching for the best CRM and ERP solutions, keep reading to find out more about each platform’s features and advantages.
What Are ERP And CRM?
The ERP system is an enterprise resource planning tool, whereas a CRM system refers to customer relationship management. CRMs primarily handle marketing, sales, and customer service. An ERP handles the backend of the business. CRMs are aimed at boosting sales and getting more customers. ERPs are intended to increase operational efficiency.
CRM Or ERP: Which Is Better?
CRMs are better for smaller companies that are just starting. They are great for growing your customer base and spreading brand awareness. CRM software is also less expensive and easier to install compared to ERP software. ERPs are typically more suitable for large, well-established businesses, in particular for handling complex supply chains.
Difference Between ERP And CRM Systems
Customer relationship management (CRM) and enterprise resource planning (ERP) software differ in the way that CRM is tailored to customer needs and front-line activities. An ERP system helps organizations manage supply chains, production and personnel more effectively. ERPs focus mainly on streamlining productivity, whereas CRMs are more focused on growing revenues.
ERP Vs. CRM System Comparison
The comparison of CRM software with ERP solutions is relatively simple, although some features may overlap between the two.
In terms of core functionality, there is one big difference: CRM tools are primarily concerned with customers and front-office tasks. The goal of CRM is to increase profitability. In general, ERP tools manage every aspect of a company’s back end, from warehousing to manufacturing.
In most cases, both software solutions are necessary for larger organizations. On the other hand, small businesses and startups can benefit from a light CRM implementation. However, ERP systems are essential to large businesses and organizations.
What Are CRM Features?
CRMs are built with many features. Here are some of them:
CRMs enable you to see your contacts in a 360-degree view. It is crucial for improving customer satisfaction. CRMs provide you with a comprehensive history of customer interactions and transactions. You can also track issues and complaints.
CRMs provide an easy way for customer service representatives and sales representatives to exchange customer information. The system also facilitates real-time updates to customer profiles. Such as when a customer updates their social media information. Additionally, you can get notifications regarding user activity.
CRM software helps streamline marketing strategies. You can plan your posts and publish them at the right times with it. This software can be used to coordinate marketing campaigns across multiple channels, including social media.
CRMs can also carry out email marketing campaigns. Email marketing campaigns segment customer data into target audiences. It discovers potential customers by gathering information from content engagement.
Sales process management is made easier with CRMs. Through sales force automation, marketing leads are automatically incorporated into sales funnels. Sales pipelines help keep track of leads as they progress toward conversion.
The pipelines provide guidance on when and how to follow up with prospects. Representatives can see where prospects drop out and what they are experiencing. It helps them plan campaigns and prices more effectively in the future. Revenue forecasting and profitability are enhanced as a result.
A CRM has many tools for providing customer service and support. It provides a multichannel communication platform so customers can contact you. It integrates a call center, email, messages, and live chat.
CRMs allow you to create and track support tickets. Reps can access customer information using CRMs. Support CRMs offer tools for self-help helpdesks, such as knowledge bases and FAQs.
Workflows And Automation
A CRM system that uses machine learning is the best. You can train the platform to automate simple and repetitive processes with such a system. Data entry and cleaning are two of the task areas. It can also send an automated response and reminder via text message.
Workflows can also be configured for e-commerce to handle quotes and invoicing. When it comes to customer service, it can help triage complaints and refer customers to the most qualified agent.
Analytics And Reporting
Data collected by CRMs for marketing, sales, and support can be very helpful. Marketing, for example, can track which ads are most effective. Times, places, or devices can also group the data. Information on sales pipelines is also available.
Additionally, you get data on customer service tickets. Performance analytics give you an overview of your team’s performance. A real-time report can be generated and updated.
What Are ERP Features?
ERPs are built with many features. Here are some of them:
Supply Chain Management
ERP systems can be beneficial to many companies. It provides a comprehensive range of business management functions. The manufacturing industry cannot function without ERP. ERP systems can facilitate material procurement. This software also manages inventory and organizes warehouses.
Your ERP can inform you when certain items need to be restocked or when there is no more space available. Furthermore, you can use the database to manage suppliers and other outside partners.
The ERP maintains visibility over a large number of moving parts. CRMs, for instance, help get sales, while ERPs ensure that orders get processed. The software can also help make sure items are available.
For instance, it can track the fulfillment process of an order from the warehouse to delivery. It can provide customers with tracking information about deliveries as well as companies.
CRMs and ERPs are both data-generating machines. ERPs are capable of tracking entire supply chains. Real-time ERP dashboards enable teams to identify problems like bottlenecks as they occur.
In addition to this, ERP data analysis can assist different departments in knowing what each other is doing. So if one department has a problem, the other department will be prepared.
ERP systems help businesses manage their financial aspects. Employee payrolls are of particular importance. ERP is used to track payables and receivables, among the other accounting tools.
Additionally, an ERP can help keep track of purchases, budgets, and other cash-flow analyses. These may be useful to companies looking to expand their R&D efforts or invest in other expansion strategies.
CRMs are good at managing contact details; however, ERPs go beyond that. An ERP system is necessary for human resource departments. It can help with onboarding new employees as well as hiring new employees.
A number of tools are available for insurance and liability. The service is especially useful for large companies with many employees dispersed across multiple locations.
ERP And CRM Integration
A company can integrate more data with CRM and ERP when they combine the two. CRM sales data can be used to plan production in ERP. Understanding customer support issues allows for improved product development.
ERP systems can notify CRM systems when there are shortages or delivery problems, and these notifications can then be sent to customers.
CRM Vs. ERP Software: The final Takeaway
CRMs and ERPs provide specialized services to business management.
A CRM system is the main tool for salespeople. CRMs are designed to increase leads, boost sales, and develop better relationships with customers. CRMs are an ideal independent tool for startups and small companies. It is used by marketers and customer service representatives alike.
The ERP system handles everything that goes on behind the scenes: the stuff that is not visible to customers. It is used to manage inventories and supply chains and assists in planning production or research and development of new products.
An ERP oversees the fulfillment process, shipping, and delivery of products. It also handles maintenance and other administrative duties. It is also used extensively by human resources departments.
How do you decide between CRM and ERP? You might need an ERP if you run a large company with many employees across multiple sites. The same applies if you own a lot of fixed capital or are in the manufacturing industry. ERP is your solution.
Small businesses, solo entrepreneurs, and startup companies may want to begin by implementing a CRM. In addition, if you are a business that provides customized services, such as a private instructor or consultant, a CRM might be more useful.
There is no doubt that many ERPs include standard customer management features. As well, you will find CRMs that include features such as accounting and inventory. In conclusion, if your current goal is to increase sales, invest in a CRM. If you want to cut costs and streamline operations, an ERP is for you.
Finally, as your company grows, you may want both ERP and CRM, or you might find a solution that combines both.
Would you like to know the best free CRM software in 2022? Read our blog to find out.