Difference Between ERP and CRM
What is ERP?
Enterprise Resource Planning (ERP) is a complete suite of business modules that provides a centralized platform for information management and sharing, depicts a 360-degree view of organizational activities, and enables decision-makers to retain complete control over business operations.
ERP software is a comprehensive software used across different industries of varying sizes. According to the ERP Software Global Market Report 2023, the global ERP software market will grow to $294.34 Billion in 2027. With the growing complexity of globally interconnected economies, and increasing consumer expectations, businesses are adopting the ERP to take advantage of modern technology and become agile & competitive.
The key benefits of using an ERP are outlined below:
Streamline and standardize the business processes
Plan and forecast customer demands
Reduce inventory costs and out-of-stock situations
Automate the procurement of raw materials
Improve operational efficiency while reducing costs
Leverage project planning and management tools
Improve profit margin with lower manufacturing costs
Effectively allocate organizational resources for optimum performance
Streamline financial processes
Effectively manage human resources
What is CRM?
Customer Relationship Management (CRM) is a system that enables businesses to track, and nurture relationships between business clients, consolidates sales data & communications into one single platform, and provides a multitude of other features for effective sales tracking, shortening the sales cycle, and building effective marketing strategies.
The purpose of using a CRM system is to simplify lead management and improve the performance of sales and marketing campaigns. It is often used in conjunction with other systems such as VoIP telephone calling service for real-time tracking and collaboration.
Here are the potential benefits of using a CRM:
Build a comprehensive database of customers, their contact history, and order history
Track and review the performance of marketing campaigns
Capture new markets by leveraging access to real-time market trends
Sales pipeline management
Lead management and prioritization
Eliminate manual work and benefit from automation
Enhance customer satisfaction with timely & speedy resolutions
Get insights through polished & intuitive charts, reports, and real-time analytics
Simplified teamwork and collaboration
Eliminate data silos, data entry and maintain data integrity
Difference Between ERP and CRM
ERP | CRM |
|---|---|
ERP allows businesses to standardize, streamline, and manage company-wide processes. | CRM allows businesses to engage, nurture leads, and manage potential customers. |
The scope of ERP is company-wide and extensive, encompassing a wider range of business operations. | The scope of CRM is limited to only Lead Management, Sales & Marketing, and Customer Support. |
Most ERPs include the CRM module. | CRM is a sub-set that does not include ERP or any of its other functionalities. |
The aim of ERP deployment is to reduce costs, foster growth, enhance operational efficiency, and maximize profits. | The aim of CRM is to turn potential customers into customers and assist with lead management. |
ERP aids in the back office operations. | ERP aids in the back office operations. |
Deployment of ERP is a complex process that requires integration with legacy systems and extensive process reengineering. | Deployment of CRM is relatively simple with fewer complexities. |
Examples include Sage X3, NetSuite, AcTouch, Scoro, etc. | Examples include Sage CRM, Zoho, HubSpot, Salesforce, etc. |
What are the Similarities Between ERP and CRM?
Now that we have discussed the difference between ERP and CRM, let us go through their similarities.
ERP and CRM are more secure than the traditional method of storing and sharing confidential business data in plain text.
Both of these applications provide powerful strategic tools to empower modern businesses with real-time and near-real-time data, and leverage automation.
Both of them are available for deployment through Software-as-a-Service (SaaS).
Both of them are cost-efficient. Their ability to collect and report data in real-time results makes the business agile.
Both of them are used by millions of businesses in India and around the world.
Both of them bring accuracy to the respective business operations.
Integration of ERP and CRM Systems
As a company grows, so do its interactions with customers and potential customers. In order to provide a modern, consistent experience across all levels, companies need to integrate their ERP and CRM. This will enable real-time or near-real-time data sharing and collaboration, rather than creating two separate data sets for the same business transactions.
Without integration between the ERP and CRM, there will be no collaboration between the front office and the back office. Order mismatching can occur, and will result in customer orders going unnoticed. A close integration between ERP and CRM will allow companies to actively track and monitor buying patterns, and consumer expectations, anticipate demands, and grab new marketing opportunities.
How to Decide If You Need an ERP or a CRM?
If you’re looking to streamline various aspects of your business operations such as production, finance, inventory, and supply chain, among others, an ERP should be your ideal choice. Due to a host of modules of ERP, it is commonly preferred by companies operating in a host of industries such as automotive, chemical, financial, furniture, manufacturing, packaging, pharma, and plastic.
If you have a large customer base and you often find yourself in a difficult position to track and manage potential and existing customers, you should opt for a CRM. Using a CRM, you will be in a better position to automate key tasks in the leads and marketing management and maintain consistency throughout communication with your existing and potential customers.
Frequently Asked Questions (FAQs)
Is CRM included with the ERP?
The CRM module is included with most ERPs. However, it may be unavailable if your company has chosen not to opt for it during the billing and payment terms.
Can I Use Both ERP and CRM Simultaneously?
ou may use both the ERP and CRM simultaneously. However, it is not a recommended practice as it can lead to two separate datasets, confusion, and other productivity issues. For optimum productivity, consider integrating your ERP with the CRM.
Can an ERP Replace a CRM?
No. While the ERP and CRM share common features and similarities, they are not interchangeable. The primary difference between ERP and CRM is that they are both made up for different purposes. The ERP primarily focuses on managing the business, and reducing costs, whereas the CRM helps with marketing, customer care, and building & retaining a positive brand image.
Who Should Use a CRM?
The CRM software enables businesses to benefit from improved efficiency in the sales, marketing, and customer support operations. Use the CRM if you want to enhance marketing efficiency, track the performance of your marketing campaigns, automatically generate Invoices and quotations, and optimize the sales lifecycle.
Another reason to use CRM software is to save costs. The ERP implementation is often costly, due to higher upfront costs. The CRM software, on the other hand, is priced cheaper due to the absence of various features such as production, inventory, warehouse, supply chain, and financial management.
Who Should Use an ERP?
There are different advantages of ERP. Consider using an ERP if you want to make use of cutting-edge technology and benefit from centralization and standardization of the data, eliminate labor work, improve organizational productivity & regulatory compliance, and lower operational and administrative costs. Even though the upfront ERP cost may appear to be higher, investing in ERP is a long-term investment that pays off in the near future. The use of ERP brings visibility into business operations and allows decision-makers to make timely, informed, and strongly data-driven decisions with the help of intuitive charts, reports, and customized dashboards. Moreover, your company can leverage the cloud technology with Cloud ERP to store data online and access it remotely.
How Much Do ERP and CRM Cost?
ERPs are costlier than CRMs because of the large feature set they offer. ERPs cost between $100,000 to $700,000 for medium-sized businesses, whereas CRM costs between $10 to $300 per user charged monthly. The actual product prices may vary from product to product, and modules selected.
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