ERP versus CRM: What’s the Difference?

ERP versus CRM: What’s the Difference?

ERP versus CRM: while an ERP (Enterprise Resource Planning) system consists of multiple modules to help organizations plan business processes, a CRM (Customer Relationship Management) system only focuses on profiling, tracking and understanding customers better. 

An ERP contains multiple modules such as accounting, payroll, inventory, supply chain and HR, all of which work in harmony to streamline companywide business processes. CRM, on the other hand, only focuses on handling customers. In other words, CRM can be one out of many modules that make up an ERP system, thereby providing much clarity in the ERP versus CRM debate.

However, the features and benefits of ERP versus CRM are more complex than they seem; with cloud computing, workflow automation and Unified Communications blurring the lines between interdepartmental enterprise applications, overlaps are increasingly common. In fact, such overlaps are also necessary owing to an increasingly competitive business environment, which makes the understanding of ERP versus CRM also equally necessary.

For today’s business owners and line managers (especially in smaller businesses) chances are that those who work in non customer-facing roles still require direct access to customer data and insights, in order to be productive. Therefore, knowing the difference between ERP versus CRM can help an entire workforce across the business hierarchy to develop quality products, manage leads, and offer improved customer service.

ERP Versus CRM: The Definitions of Each

Knowing the difference between an ERP versus CRM can enable both you and your organization to understand how certain ERP features can tie in with customer-centric applications such as CRM or CX software. However, before understanding the differences between ERP versus CRM, it is important to know the individual definitions of each.

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What is ERP?

ERP or Enterprise Resource Planning is a modular application that streamlines business processes throughout the organization. Consisting of finance, workforce management, logistics, inventory, asset management and a multitude of other modules, ensuring every department is connected is one of the key goals of an ERP.

What is CRM?

CRM or Customer Relationship Management is an enterprise application that enables sales teams to profile, track and analyze customer data. Although CRM software is generally customer-facing, it is often homogenized with other departmental applications such as marketing automation software, since customer data offers valuable insights for the entire organization.

ERP Versus CRM: Capabilities and How They Differ

Integration

Integration is one of the biggest factors surrounding ERP versus CRM, since both applications need to work in unison in order to reap maximum business benefits. While ERP integration is a complex process that attracts much attention from businesses and vendors alike, adding a CRM to this mix further ups the ante - thereby adding much complexity into the ERP versus CRM debate.

Integrating a CRM with ERP means that customer profiles will serve as a central source of truth, with all functions pertaining to each customer directly tied into their respective profile. When trying to understand ERP versus CRM deeper, this can be a complex endeavor, no doubt. However, to better learn about ERP versus CRM, it is important to understand how ERP implementation and training can be best executed, in order to ensure a smooth ERP integration for your business.

Analytics

Reporting and analytics vastly differentiates ERP versus CRM, but also overlaps in many occasions. By integrating Business Intelligence (BI) software, both ERP and CRM applications are a valuable source of data for business leaders to identify patterns and predict trends. 

While this constitutes an overlap between ERP versus CRM, factors that differentiate the two range from the nature of results derived, to KPIs. Paving the way for all insights regarding operational efficiencies is one of the key characteristics of an ERP, while data from a CRM offers perspective on revenue trends, based on customer purchase behavior.

AI and Machine Learning

Technologies such as AI bear no differences between ERP versus CRM, since both applications can benefit in similar ways. Intelligent recommendations are a universal feature, thereby offering a commonality between ERP versus CRM. Workflow automation is another ERP versus CRM commonality. 

However, where exactly these capabilities are executed determine niche differences between ERP versus CRM; while an ERP can intelligently automate mundane administrative tasks, a CRM can automatically perform relevant email marketing that focuses on product suggestions based on customer purchase history.

ERP Versus CRM: Which One to Choose for Your Business

Deciding between an ERP versus CRM isn’t as straightforward as choosing one over the other. Owing to increased digitization, cloud computing and sales force automation, the average organization is increasingly connected between departments, thereby blurring the lines between choosing an ERP versus CRM. However, by doing a business assessment of existing problems and bottlenecks, your teams can make better sense of an ERP versus CRM, and therefore determine which application is better suited - or whether both are a requirement. 

Depending on the industry that you operate in, determining between an ERP versus CRM can be more or less complicated. For example, a logistics company will have to strike the right balance between ERP versus CRM, while decision making is bound to be much simpler for a fintech startup, with only CRM being a necessity. Business size is another point of consideration between ERP versus CRM, with smaller companies being able to manage with just one application - but only until a company scales up. Integrating other departmental software (such as a CRM with project management, for example) can also compound into the ERP versus CRM discussion, since strategic integrations need to be made in order to ensure seamless flows of data.

For companies that already have one out of two applications, deciding between an ERP versus CRM becomes much simpler. Customizing an ERP to include a CRM, for example, can provide a company with the ability to enhance its level of customer service. On the other hand, expanding an existing CRM suite with an ERP application so that sales and service teams can monitor a customer’s entire lifecycle beyond their own departments is another valuable use case, when it comes to ERP versus CRM.

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