CRM Vs ERP: What’s the difference?

Data has become an unbeatable factor in today’s digital landscape. If utilized strategically, it can transform a business and help it reach the zenith. Whether it’s customer information or internal process data, apt usage of this entity has become imperative for every organization or enterprise, regardless of the size or industry. This has further led to the great dependency on two software powerhouses, namely CRM and ERP.

While both are often regarded in tandem and can be built as a united platform, CRM and ERP have significant differences in their architectures, internal functions, prospects, and impacts. Recognition of their distinct areas is imminent for every business so that the software programs can be leveraged to the fullest without any hassle. That being said, let’s take a quick glance at the factors that set CRM and ERP apart from one another.

CRM and ERP: Breaking down the terms

Before delving deep into the key differences of these two systems, having a brief overview of them will be more beneficial for you. This way you can grasp the idea with ease and won’t struggle to pinpoint their utilities as per your organizational needs.

What is CRM?

CRM stands for customer relationship management and comprises of a full-stack of technologies, practices, and strategies that allows enterprises to automate business interaction with the customers. It usually covers multiple domains simultaneously, like marketing, ecommerce, advertisements, sales, and customer service. The tool acts as a primary data reservoir for storing purchase histories, customer interaction records with sales services, historic actions, and service requests.

What is ERP?

ERP, on the other hand, stands for enterprise resource planning software used for management, automation, and integration of day-to-day core business activities and processes. It allows enterprises to establish a central operational platform for streamlining various processes, like billing, transaction management, resource planning, supply chain, procurement cycle, and many more. Furthermore, the ERP software collects valuable data from multifarious resources, consolidates the information, and streamlines the data flow cycles across the integrated departments.

CRM VS ERP: Unveiling the business benefits

Before you go all the way to implement either of these two software platforms or both, knowing about their advantages will help in the decision-making process. After all, you should choose the tool that will add more value to your business given the current landscape and make it future-ready. So, below we have briefly mentioned the benefits of CRM and ERP tools individually for your understanding.

Advantages of CRM in the business landscape

·         CRM offers a centralized platform to record business interactions with the customers and store various related information sets, like actions, purchase histories, and service requests. This enables professionals to gather ideas about the customers and enhance the deliverables to cater to their requirements.

·         With CRM implemented at the core, several sales operations can be automated like opportunity tracking and lead management. As a result, the sales cycles will be shortened and the productivity of the sales team can be enhanced.

·         The tool also helps marketers to segmentalize customers based on demographic data, purchase histories, and behavioral analysis. Therefore, curating tailored marketing campaigns and advertisements becomes easier for the professionals and it further boosts the conversion rates and ROIs.

·         With CRM integrated with other enterprise tools, businesses can improve customer service by offering personalized support, reducing problem-solving time, and enhancing overall customer satisfaction rate.

·         One of the significant benefits of implement the CRM tool is the access to advanced analytical reports and dashboarding modules. This will help the stakeholders make data-driven decisions for the business and optimization of action strategies.

Benefits of implementing ERP software

·         With Odoo ERP software, enterprises can automate and streamline the day-to-day back office operations and processes, like human resource management, supply chain management, manufacturing, and sales. As a result, manual efforts can be reduced with improved efficiency and increased team productivity.

·         ERP offers an integrated data repository to store information from various sources at a single place. Therefore, different teams can access the data at par their convenience, thereby fostering better collaboration, reduction in communication siloes, and increased information visibility.

·         Several ERP tools come with inventory management modules to help businesses track and monitor the inventory movements, prevent overstocking or understocking, and increase the inventory turnover. This further improves the cash flow and enhances the relationship with the customers.

·         With automated tasks and streamlined operational workflows, enterprises can mitigate production leaks, reduce labor exhaustion, and manage budget utilization in a better manner. It further paves the way for achieving operational excellence and agile business practices.

·         ERP allows businesses to streamline order processing workflows, acquire real-time information on orders, and manage customer information swiftly. That’s why ERP is often considered as a savior for improving customer satisfaction and enhancing the business relation.

CRM VS ERP: Areas where the differences lie

Below we have presented the major differences between the ERP and CRM tools that you must consider before their implementation.

Areas of distinction	CRM	ERP
Scope/ functionality	CRM is responsible for managing business relationships with its customers and potential leads. The major applicability areas are customer support, lead management, and sales automation.	ERP offers a broader scope by allowing businesses to automate and manage day-to-day operations. It focuses on multiple workflows and processes simultaneously, including finance, supply chain, inventory, and human resource.
Data source	It collects information on prospective leads, customer behaviors, past purchases, service requests, and other forms of user-related information.	The tool focuses more on process-related data, like financial transactions, production timelines, inventory stocks, and employee information.
Automation	CRM allows enterprises to automate sales processes, routing of customer calls, lead scoring, and many other such workflows.	ERP, on the other hand, automates report generation, invoicing, product launches, and other internal operations.
Data analysis	Since CRM tool is entirely depending on the customers, it can generate accurate reports and analytical results on sales, marketing, and customer service domains.	ERP helps businesses unveil market trends, company conditions, performance metrics, and other such data-based areas for overall improvement.

Conclusion

Through this parallel study, it’s crystal clear that both ERP and CRM serve different intents. While one tool is focused on business-customer relationships, the other one handles internal or back-office operations. Despite having different scopes and functions, they can be integrated with one another to unlock the true potential of the enterprise software suite. You can rest assured that with a custom CRM and ERP development plan, you can stay ahead of the curve and evolve rapidly in the current fast-paced market landscape.