Difference between ERP and CRM

What is ERP?

Enterprise Resource Planning, short formed ERP is a system software that is designed in such a way that it integrates and manages all the processes and operations of a business in a smooth and hassle-free manner. This system software allows a business to make its business process more effective and efficient using automation. It helps not only in improving the efficiency of business operations but also gives an edge to the organisation by cost reduction of the overall business management process. 

The ERP system consists of almost all aspects of a business in its core companies. These aspects include procurement of raw materials/goods, production process, financial management, accounting management, inventory management, human resource management and management of the supply chain. All these aspects come together to provide the business with a smooth functioning of all the activities, starting from procurement of raw materials to sales distribution, accounts management to managing customers, it got you all covered. 

The ERP systems are flexible in nature and can be customized according to the change in size and needs of the business organisation. The organisation has the option to tailor the ERP software according to their needs making it easy to add or remove any new or existing feature that might be of use to the business. The vendors give the business options to both add or remove new features to the core system. Initially, the implementation of an ERP system can be time-consuming and a little complex process, because of the involvement of data migration, user training and many more. But, the benefits of an ERP system are remarkable which not only improves data accuracy but also increases business efficiency and helps in cost reduction.

ERP systems also provide real-time data analytics and reporting capabilities, allowing organizations to make data-driven decisions and improve their overall performance. With an ERP system, organizations can improve their customer service, reduce operational costs, and increase their competitive advantage in the marketplace.

Overall, ERP systems are an essential tool for modern organizations looking to streamline their operations and improve their performance across all areas of the business.

What is CRM?

Customer Relationship Management, generally known as CRM refers to a set of strategies and practices that businesses use to maintain a healthy relationship between the business and its potential customers. The businesses initiate interactions with potential as well as existing customers to build a strong and healthy business-customer relationship. The goal of CRM is to build as well as maintain a healthy relationship with customers. It helps in increasing customer loyalty and improves sales, which ultimately leads to an increase in the profits of the business.

CRM runs with the integration of three important components, i.e., people, technology and business process. 

The component with people refers to the individuals working within the business organization. These individuals work to manage a healthy relationship with the customer. These individuals include all the members of the sales team, marketing team, customer service representatives, etc. This is the reason why organizations nowadays are focusing on providing their employees with training and support. And is important as well because the training brushes up the employee’s skills so that they would know and understand the process of maintaining a healthy customer relationship. 

The component of technology in CRM includes those software systems that can automate the process of all the activities required facing customers. This takes into consideration activities such as sales, customer services, marketing, etc. These CRM software systems help the business to collect as well as analyse customer data, the interaction between the employees and customers, and make tasks automated which comes under customer management, 

Finally, the component of business process in CRM means those procedures and practices that companies refer to manage the customer-business relationship. These components include customer segmentation, customer feedback management and lead generation. These processes are used by companies to understand customer needs and behaviour so that they can develop and maintain personalized marketing strategies. This helps in increasing customer satisfaction and a feeling of customer loyalty. 

Difference between ERP and CRM

Both ERP and CRM are business management tools that are used to manage business processes and make it easier for the business to optimize the workload. However, there are some major differences between the two-management tool. They are as follows:

• The first and foremost difference between CRM and ERP is the range of their features and functions. ERP system software has a broader scope of functions and covers a wide range of business processes. Meanwhile, CRM systems have a narrower scope of functions in comparison to ERP as it typically focuses on customer management. Although both ERP and CRM systems store and process customer data, CRM software systems store data related to customer preferences, behaviour and interactions between them, while ERP systems only store data which is related to payments, invoices, sales, etc. 

• Secondly, the user base of ERP and CRM is different. CRM systems are used mainly by employees in those departments which require facing customers. These include the marketing team, sales team, customer service department, etc. whereas, the ERP system is used by employees from different departments such as human resources, finance, accounting, etc. 

In conclusion, CRM and ERP are two different business management software which serve purposes that are different from one another. While CRM systems focus on the management of customer interactions and maintaining a strong and healthy relationship with them, CRM focuses on the management of all the aspects of the organization’s business processes. A business organisation requires both these business management tools to have smooth functioning of their business processes, together with a healthy relationship with its customers. These systems when integrated can provide a business with a streamlined business and customer management process which is very essential to have a successful business in the current time. Therefore, CRM and ERP are two wheels of the same bullock called business. If one wheel isn’t present, the bullock can’t move forward.