What’s the difference between CRM and ERP

Every business handles a large amount of customer data daily. As businesses are dealing with more complex customer data management processes. Using CRM and ERP software, the data distributed across multiple channels, and there are no chances of losing important information. The way businesses interact with their customers decide how long they are going to sustain in this competitive world. They are similar in many ways as both used to increase the overall profitability of a business.

Satisfied customers are the most valuable virtue of any business. Moreover, when you fail to manage your customers, all your customer relationship processes like predictions, decision making, sales, and purchase become inefficient. To deal with such situations, businesses are still using CRM and ERP software systems separately. Nowadays, ERP and CRM integration keep the customer, manufacturing, and inventory data in one place, making it more powerful and easier management for the users.

CRM is a unified software that manages the connections with customers or clients of the organization. ERP is a software program that manages the business processes of the entire organization. It emphasizes the planning of the resources to increase the efficiency, effectiveness, and economy of the enterprise. CRM and ERP are software that is implemented by companies in their organizations to increase their profitability.

What is ERP?

ERP software improves the efficiency of business processes. ERP allows the rapid sharing of standardized information throughout all departments. It provides departments to plan for issues before they become a problem in that department. In short, the business has to focus on the data, instead of the operations. ERP provides a method for streamlining business processes across the board.

What is CRM?

CRM is a system for storing and recording all information related to customer interactions. CRM software like Centra Hub CRM provides a standardized approach for collecting and sharing customer data and classifying customer interactions.

Since all your data is regulated through CRM, it’s easily shared throughout the business.

CRM can be used by sales reps to maintain contact, track the shipping to verified addresses, and the billing department to create invoices. The main goal of CRM software is to provide ample storage of customer data that can be used to increase sales. It improves customer retention and makes customer relationships more efficient.

The main objective of implementing CRM software in any business as it builds trust in the customers and maintains a healthy long-term relationship with customers. It uses to serve the customers in such a way that their satisfaction level is maximized.

CRM stores the information like name, phone number, address, email, etc. about the existing customers, along with their history of customer interactions in a single platform. And it handovers the information to the employees, handling the client so that their expectations are fulfilled.

It may include information about potential customers like their needs and preferences to create a relationship and provide them better products and services. The software consists of strategies like employee training, relationship building, advertising, etc. that develop the requirements of the clients. ERP integrates the key areas of the business like purchases, sales, manufacturing, human resources, services, inventory, etc. to smoothen the business processes and flow of information across the organization.

Benefits of using CRM and ERP software:

1. Unification of Accounts and Contacts

Both CRM and ERP software store detailed information of customers (includes contact information, order history, and billing details). By integrating the two software, you can see all the details for one account at one location, then having look at the same account with the two different solutions. It will save time on data entry. Instead of updating accounts/contacts in both systems, you will only have to do so in one centralized location.

2. Rebate of Data Duplication

If you’ve used an automated solution such as ERP or CRM software before, you know that duplicate data is the major problem for software users. While ERP software focuses on billing-related and shipping data, CRM software holds customer-centric information and sales metrics. With an integration approach, duplicate data is a thing of the past and the present situation both systems work through the same rules and structure.

3. More robust Visibility and Forecasting

In the B2B enterprise, sales reps need to be able to access data within the enterprise resource planning software. Sales reps often need to check in the status of an order, make changes, and progress of orders and account at any time and more.

In terms of forecasting, the integrated ERP and CRM system will naturally provide better data. Since it’s real-time and always as accurate as possible.

4. Cross-Departmental Collaboration

A significant benefit of both enterprise resource planning and customer relationship management software is the ability to work cross-departmentally, without department siloes.

In these business approaches, departments are entirely distinct from one another, discouraging collaboration, making data accessibility a challenge, and data duplication common. A cross-departmental approach ensures real-time data always utilized, and departments are working together to accomplish the same goals.

5. Easy Quoting and Ordering

A sales rep will be able to take a proposal from CRM and turn directly into an order in the ERP system without any changes and re-enter the data in multiple locations. It will save time and improve company efficiency. The sales reps would also have improved visibility into the status/progress of an order for customer updates as well as easy access to make changes if needed.

6. Managing of Inventory

A sales rep with the integration can look at the ERP to view the company’s inventory to get the most accurate quote. They can factor in things like promotional and discount pricing from the CRM. From there, they use the information to make a far more accurate quote and ultimately, a faster timeline from quote to the finished product.

Differences Between CRM and ERP

Even though the core benefits have already been mentioned above. Here are a few functional dissimilarities observed upon the realization of the said solutions are given below:

• CRM is a tool for guiding customer relationships and enables them to track every activity associated with the client. Whereas ERP is the tool to steer versatile transactions within a corporate structure.
• CRM can be a constituent part of ERP since the latter consolidates the data from versatile sources represented by functional groups of an enterprise via CRM, HRM, and others. CRM can boast for a longer period of existence compared to ERP.
• Businesses comprise peculiarities of achieving results using both systems. Companies utilize CRM to conduct back-office transactions, while ERP is deployed to accomplish them.
• For managing interaction with clients, you should choose a CRM tool. ERP is beneficial for the optimized utilization of the resource.
• The final difference which discloses the core of both approaches deals with the financial aspect. CRM is a tool to increase sales, while ERP aims at cost reduction.

Which System do I need to Choose CRM or ERP or both?

If you are looking to improve your sales and marketing processes, and happy with the software. You’re using like accounting and human resources, then you probably need a new CRM software.

On the other hand, if you’re looking to overhaul all your business software or in a period of growth. Then you should consider investing in a new ERP tool.

Choosing between these software depends on how robust your lead management and sales tracking requirements are. An ERP helps streamline a diverse list of processes, with specific capabilities varying from the vendor to the vendor.

On the other hand, CRM typically contains a stronger set of customer-related features than an ERP. And CRM software is the best to bet. If you are going to implement a solution to facilitate workflows aside from CRM in the future. Then you might consider an ERP as it contains a centralized data source and connected business processes.

CRM software focuses on the customer and increases sales as they are the key to a successful business.

ERP software focuses on the business process and the sharing of data between departments. ERP software helps a company lower the costs of production and squeeze efficiency out of a business. Therefore, ERP is a much larger solution that must be integrated across the different divisions. For example, the sales data feeds into the production goals, which then feed into the financial projections, and so on. ERP software may contain a CRM component, but it will be less complex than a dedicated CRM solution. Integrating your CRM into an ERP ensures that the right information is synced to the right customer. It prevents uncomfortable mistakes that hurt the customer experience.

Conclusion

ERP and CRM software solutions are usually compatible with one another. Small businesses with few divisions may be the best CRM software that helps to grow sales. Whereas a larger business may go with an ERP, or both to handle sprawling operations and sales outlets.

Put simply, ERP and CRM software both try to improve a business. CRM focuses on the customer and increasing sales, and ERP focuses on processes and reducing costs.