ERP and CRM are both business management systems that are used to increase revenue, introduce automation, and enhance productivity. But while comparing ERP vs CRM, we have to take a look at the scope and methodology that these two software take to achieve their goals.
Enterprise Resource Planning software commonly referred to as ERP software is an application bundle that helps achieve multiple business processes — such as financial management, supply-chain management, inventory management, human resource management, customer relationship management, etc. Other business processes can be added as per business needs. The goal of enterprise resource planning software is to break information silos, create a central repository of data, and streamline business processes.
If you want your business to have added functionalities, you can contact your vendor and get them installed in your existing ERP package. But here are a few basic functionalities provided by Enterprise Resource Planning software: 1. Financial Management The evergreen debate of the difference between CRM and ERP systems can never be complete without talking about financial management. ERP systems allow your business to stick to budgetary requirements and help control costs. Fixed asset management, accounts payable, accounts receivable, general ledger, financial forecasting, budget development, and tax calculations are a few important financial management tools that it provides. 2. Inventory Management Inventory management is not a stand-alone function rather an auxiliary tool that sustains other functions — such as manufacturing management, distribution, and warehousing — as well. It provides a better overview as it allows you to keep an eye on inventory along with examining the status of machines that manufacture products. 3. Supply Chain Management Supply Chain Management is a comprehensive set of tools that allow for the management of purchase orders, manufacturing, adherence to regulatory compliances, distribution, inventory management, and monitoring. Having a good and reliable vendor is the most important attribute for a healthy supply chain management. 4. Human Resource Management An efficient workforce is the most important attribute of a high-performing business. The ERP system helps you do just that. It executes various functions such as distributing wages, scheduling employee work hours, approving leaves, and conducting employee promotion objectively. It helps monitor what teams are currently working on and also designates labor resources as and when required. 5. Customer Relationship Management While comparing ERP with CRM, it's important to discuss Customer Relationship Management (CRM). Although CRM is different software, new and improved versions of ERP software contain some CRM functionalities as well. Some of them are as follows: Contact Management and Lead Management. Although these functionalities will not be as advanced as a stand-alone CRM software, having them increases the utility of the ERP. We will study them in great detail in the next section when we talk about CRM.
Customer relationship management software serves two important functions. First, finding prospects and covering them into paying customers. Second, developing long-lasting relationships with existing customers. If you want your business to have added functionalities, you can contact your vendor and get them installed in your CRM system. 1. Contact Management CRM enables you to gather, store, and analyze customer information. Apart from collecting names, contact details, email id, and addresses it also allows you to perform mathematical analysis based on their past purchases, demographics, and buying behavior. It automatically assigns customer accounts to different sales representatives and lets them store customer-centric invoices and important documents. 2. Database Management Taking the CRM vs ERP debate ahead, it's imperative to discuss database management. CRM creates a centralized repository that contains details of every customer that your business serves. It eliminates data-duplicity, thus ensuring that the repository contains fully updated data. This centralized repository is free to use and allows downloading information to support workflows. It assists a business by helping it grow prospects and by providing valuable analysis. 3. Lead Management Lead management is one such topic that is often examined while comparing CRM with ERP. This tool helps collect leads from multiple sources — such as cold calling, email, referrals, landing pages, and content. It makes use of features like hierarchy relationships, pipeline tracking, and territory management tools to check and track business leads. 4. Campaign Management While talking about the difference between CRM and ERP it's imperative to mention campaign management. The CRM software helps the business to locate potential target segments for running campaigns. It also helps to gauge the effectiveness of those campaigns. Vendors also offer the business an added functionality of integrating email applications. This helps to upload contact information easily and send marketing messages conveniently. 5. Client Interaction tracking The difference between CRM and ERP is that the CRM provides client interaction tracking, a feature that is used for tracking historical client information. It segregates customers on the basis of their interests, purchase carts, wishlists, etc. This ability permits users to track and inspect payments and form segmentation strategies accordingly.
Choosing anyone out of them — ERP or CRM — depends on many factors, the most important being the kind of business processes you require help with. If you require support in managing finances, supply chain, and human resources, and want to streamline business-critical functions, then an ERP package is your best bet. But if you are facing trouble managing campaigns, contacts, databases, leads, and are looking to establish long-lasting relationships with your customers, then CRM is your go-to software. As stated above, ERP packages come with in-built CRM software but with limited capabilities. So most businesses invest in an ERP package first. Afterward, if they feel the need for interacting with customers regularly and more systematically, they invest in stand-alone CRM software. It provides a variety of added features that allow them to communicate with their clients conveniently and attract their attention. All in all, the ERP—CRM duo is a boon for any business if used together. Both of them are excellent tools to optimize revenue, expand the client base, and organize business processes effectively.