While closely related, Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) are two distinct types of software systems that serve complementary purposes within your business.
If you’re considering adding one or the other to your existing digital ecosystem, you’re in the right place. It’s important to note that an ERP consultant can help you implement and connect both types of software, depending on compatibility.
In this article, we’ll discuss the key differences and similarities between ERP vs CRM systems.
CRM vs ERP: Purpose and Functions
While CRM and ERP systems overlap, their purposes are unique.
ERP systems are designed to manage and streamline core business processes and operations across all departments of your business. The goal of ERP software is to connect your entire business’ digital ecosystem, including resource planning, process automation, and data management. This affects your finance department, manufacturing IoT devices, inventory, procurement, human resources, and more.
In short, ERP systems help businesses optimize internal processes and increase efficiency for the whole of the organization.
ERP Key Functions
ERP key functions include:
- Internal processes
- Resource management
- Financial management
- Supply chain management
- Inventory control
- Production planning
- Human resources
- Payroll management
- Business analytics
- Process automation
CRM systems, on the other hand, belong primarily to your sales department. They are geared specifically toward managing interactions and relationships with customers and prospective clients.
CRM software tracks your interactions with customers, gathers customer data, manages sales and marketing cycles, and overall enhances customer engagement. CRM systems are designed to improve customer satisfaction and drive sales growth.
CRM Key Functions
CRM key functions include:
- Lead and opportunity management
- Contact and account information
- Sales forecasting
- Marketing automation
- Customer service ticketing
- Customer analytics
ERP vs CRM: Data Capture
Both ERP and CRM systems capture and analyze data crucial to your business.
ERP systems manage structured data related to your business’s internal operations. Depending on the ERP modules you select, your ERP system can handle data like financial transactions, inventory levels, employee records, production schedules, and supply chain management.
ERP systems are the central database for all departments and share that data among them for a solid bird’s eye view of the business’s operations. They can also automate processes.
CRM systems focus on customer-related data. By storing information about customer interactions, transaction history, client preferences, and contact details, CRM systems help sales teams track leads, manage sales pipelines, automate marketing campaigns, and provide customer support.
Who Uses CRM Systems vs ERP?
Another difference between CRM vs ERP is who uses them.
ERP systems are used by leadership and employees of all departments and can seamlessly integrate with other systems, including CRM software, to share relevant data.
- Finance departments use ERP systems for accounting and to ensure resources are being allocated efficiently.
- Human resources can track employee performance and evaluate new hires.
- Manufacturing can automate processes and determine when it’s time for machine maintenance.
- Even sales teams utilize the information from ERP systems to check inventory levels and provide customers with answers on the spot.
CRM systems, however, are primarily used by sales and marketing teams. While they can integrate with your ERP software, CRM software is specifically used for the purpose of gathering and tracking leads and customers. Therefore, most other departments do not need access to the CRM.
ERP vs CRM: Which Is Right for Your Business?
The truth is that most businesses need ERP and CRM systems. While they both provide vital business analytics, they serve two distinct roles and departments. ERP systems are centered around internal operations, while CRM systems help generate leads and create better relationships with clients. Together, these systems help all departments make informed decisions for your business.
Not sure where to start? Need help integrating your systems? Contact the experts at Godlan Consulting today.
