What is the difference between an ERP and a CRM?

Companies must implement tools and processes to eliminate redundancy and maximize growth in sales in today's sales activity. They do so with the help of two major business software systems: customer relationship management systems (CRM) and enterprise resource planning systems (ERP). While both share similarities like integration into a single platform, allowing for seamless coordination of business processes, they serve different purposes. So what is the difference between an ERP and a CRM?

If you're wondering which system is the best tool for sales, let us demystify by comparing and contrasting both solutions.

What is a customer relationship management system (CRM)?

A CRM is designed to manage and track how a client interact with your brand. Seeing as customers and sales are one of the most essential variables for a business's success, a CRM is a critical tool for companies of all sizes. It stores information regarding each customer interaction and makes this data available throughout multiple departments.

CRM software is the core software that allows sales and marketing to work in tandem to offer a customized and superior customer experience. CRM systems allow businesses to manage their supply chain management, identify potential customers, track customer interactions, and analyze customer data to improve customer satisfaction. It is also a time saver for companies and facilitates the supply of data.

What is an enterprise resource planning system (ERP)?

An enterprise resource planning (ERP) system is a software solution that allows businesses to manage and coordinate various business functions, such as accounting, inventory management, and human resources. An ERP system provides a single source for all business data, enabling sales teams to access customer information, track sales, and manage inventory. Its capabilities allow it to link actions from all company departments onto one central platform.

This removes the dreaded silos of systems and provides managers with cross-department visibility and standardized real-time information. This allows businesses to make informed decisions and improve their overall performance by streamlining their operations and improving efficiency.

Similarities between ERPs and CRMs

The integration of CRM and ERP systems within a central database enables users to access and analyze business data, thereby streamlining operations and maximizing revenue. The latest technology advancements have made it possible for businesses to utilize these systems through an on-premise model or cloud-based SaaS solution.

One of the key differences between CRM and ERP systems is that CRM is focused on managing customer relationships and marketing campaigns, while ERP is focused on managing various business functions and features. Now, let's explore the main difference between an ERP and a CRM.

Difference between an ERP and a CRM

ERP and CRM are two different types of business software that serve different purposes and have distinct functionality :

1. A CRM is the core business tool used by sales reps, marketing teams, service teams and customer service to analyze customer data.
2. ERP is a system that helps manage various business functions such as accounting, inventory, and human resources.

While ERP systems are more geared towards back-end operations, CRM systems are more focused on front-end sales and customer interactions. While both a CRM and an ERP can be useful tools for effectively managing business operations, they have different limitations in terms of what constitutes an essential component in the overall functionality of each system.

Does my company need a CRM or an ERP?

Choosing which software to implement can be difficult because each brings its benefits according to the company's projects. Whereas CRMs are essential in playing a role in a company's growth and finance, an ERP can streamline operations, which will end up cutting costs. So which should your company choose?

Implementing both product technologies should be a part of your operational processes to improve efficiency and gain a competitive advantage.

Streamline your operations and manage your business with Microsoft Dynamics 365

The integration of CRM and ERP technologies within Microsoft Dynamics 365 enhances the functionality and features of business operations throughout your company by eliminating silos, reducing reliance on spreadsheet-based data, and access all your data in one database. To ensure that your business decisions are aligned with your goals, contact XRM Vision to discuss.