ERP Vs. CRM: What Is The Difference?

27.12.21 04:05 PM By Shakeel

Enterprise Resource Planning Systems (ERP) and Customer Relationship Management Systems (CRM) services are similar to each other but there are significant differences as well. Both of these software systems are the main solutions that businesses use to automate their basic business processes. ERP helps companies connect both financial and operational systems to a central database, while CRM helps manage how customers interact with their business. With the right knowledge, you will be able to identify the key characteristics of ERP and CRM services as well as which software services you need in your own business. 

What Is CRM?

CRM is software that manages how customers interact with a business. In the beginning, CRM services were developed in order to improve sales departments and were sometimes known as sales force automation (SFA). Other services were eventually developed to manage customer service interactions and marketing, particularly in call centers once phones became just another avenue for customer service. After years of development and implementation, software providers began to combine all of these services under one basic package. This is when CRM services as we know them truly came to be. 

The promise at the core of every CRM system is to give the business a central location for all customer data, including all customer interactions. With access to this information along with valuable analytics, businesses can make more informed decisions on which customers to focus on. This can increase revenue, conversion rates, customer satisfaction, and more. With one centralized CRM system, sales representatives will know whether customers they’re speaking with have any outstanding customer service tickets or complaints and can respond accordingly. Cloud based CRM services can also quickly see whether a caller is a high-priority or a high-value customer, so they can either adjust accordingly or transfer them to the correct place. Employee performance evaluations and sales incentives are also included in a few CRM services, but they’re often sold as optional additional features.

What Is ERP?

ERP software evolved out of an older system called material requirements planning (MRP), which was a way for manufacturers to manage the resources needed to operate a successful business. ERP acts as a shared database for every aspect of a company. At its core, that means finances, accounts payable, accounts receivable, payroll, and financial reporting. But ERP services have evolved to be so much more than that. ERP also extends to inventory management, supply chain management, order management, and any data related to service organizations. ERP services address procurement, production, distribution, and fulfillment as well. Some ERP systems also offer Human Resources Management Systems (HRMS), CRM services, and eCommerce.

One of the main benefits of implementing an ERP system comes from having one single, shared database for all of your important data. This positively impacts reporting significantly. A single location for financial and operational data also means employees can dig deeper into reports in order to uncover financial insights without needing IT or finance teams to conduct any analysis or reporting. This allows businesses to make faster, data-backed decisions that can impact everything from profitability to opportunities for growth. Another benefit of moving to an ERP system that companies frequently cite is a fast return on their investment. Finance teams typically account for all income and expenses and calculate the results, either at the end of each month or quarter. With a centralized ERP system automating many of these tasks, companies have reported reductions in the amount of time it takes to complete employee tasks as well. 

How Do ERP And CRM Services Compare?

While the entire business will come to rely on both cloud-based ERP and CRM software, the fundamental difference between ERP and CRM services is that ERP is primarily for financial data, while CRM focuses on customer data used by the sales and customer service departments. The departments that most commonly use ERP services are referred to as the back office, while the departments that utilize CRM services are referred to as the front office. Some ERP systems have few CRM services integrated, while others don't. However, no CRM software includes any ERP services. 

Nearly all growing companies, whether they’re small to midsize businesses or large enterprises, will eventually need both an ERP and CRM services or an ERP system that offers CRM services. Companies who handle their financial information on entry-level accounting tools like QuickBooks or even in spreadsheets often turn to an ERP system when they find that those tools are holding them back. The same can be said for businesses managing their customer relationships through individual sales representatives’ email accounts, or spreadsheets. Whether a company first invests in CRM services or ERP services will depend on a lot of factors, such as size, industry, or style of business. A company with a select few high-value customers and complicated financials might be more likely to invest in an ERP system first. On other hand, a company with relatively straightforward financials and a large customer base that requires frequent contact might go for a CRM system first instead.

If ERP Services Are For You…

If you are looking for robust ERP services that will cater to the needs of your unique business, look no further than Erphub. We offer you absolutely all of the services that you will need to run a successful business, including CRM services. Visit https://www.erphub.com/ to learn more.