Customer relationship management (CRM) and enterprise resource planning (ERP) systems may seem interchangeable. However, there are distinctions for each and various reasons you may choose one over the other. In this post, we’ll explore CRM vs ERP systems and help you determine which would be better for your organization. But first, let’s define the two terms in a bit more detail.
What Is CRM?
CRM is a system that manages an organization’s sales leads and customer data. This data can include It is an effective way for businesses to manage and analyze relationships with prospects and customers and stay connected to them and increase sales.
CRM systems will streamline many of the processes that go into sales and marketing efforts to offer more collaboration between teams and improve conversions. Additionally, they provide an excellent source of data, allowing teams to track and optimize campaigns on the fly.
What is ERP?
An ERP system allows organizations to store and share information throughout all departments and locations through integrated business applications. It can help businesses with many aspects of managing their day-to-day business from sales to project management, to HR, and beyond.
What makes ERP systems unique is that they touch so many different parts of a business. With improved data sharing, collaboration, and analytics, ERP systems can be a very cost-effective means of improving business processes and productivity.
CRM vs ERP
Many organizations find themselves confused and overwhelmed when trying to determine whether they need a CRM or an ERP. Researching the two systems, how they apply to business, and how they can help your brand specifically can lead you down a rabbit hole you didn’t know existed.
For instance, if you start digging into finding a CRM for your organization that will help your sales team increase conversions, you’ll ultimately find that there are more extensive solutions available, such as ERP systems, that can expand these capabilities throughout your organization.
According to CRMSwitch.com,
[t]he goal of CRM is to provide a comprehensive store of customer data that can be used to increase sales, improve customer retention, and make customer relations more efficient.”
“Though similar in effect, ERP and CRM systems use different approaches to increase profits. ERP focuses on reducing overhead and cutting costs. By making business processes more efficient, ERP reduces the amount of capital spent on those processes. CRM works to increase profits by producing greater sales volume. With a standardized repository of customer data, it’s easier for everyone, from executives to sales reps, to improve customer relations. In turn, those improved relations translate into increased brand loyalty and profits.”(CRMSwitch)
Which System Is Best For Me?
Should You Implement CRM, ERP, or Both?
So, which should you implement? Well, it depends on your needs, but, if you decide to go with one or the other for the time being, you’ll want to make sure they are able to be integrated in the future, just in case. CIO.com suggests that the challenge for customers is to decide how much of each kind of system to buy and where you can get away with a lighter version instead of the best of breed version.
At first glance, the CRM vs ERP difference is negligible. Both systems improve processes and your access to data, for instance. However, while a CRM focuses more on front-end activities of an organization such as sales and marketing efforts, ERP is more focused on back-end activities such as project planning, supply chain management, and accounting-type activities.
In a nutshell, ERP helps organizations make processes more efficient to cut costs. CRM increases profits by providing tools to increase sales.
Additionally, here are several things to consider when deciding which system is best for your business:
- If you are looking for a more comprehensive solution to help out your entire organization, ERP is more all-encompassing
- If your main goal is to expand your sales and your sales team’s capabilities, CRM is more focused.
- If you are in need of improving business processes throughout the organization, ERP is the answer.
- If you only need to improve your sales and marketing processes, you only need to invest in a CRM solution.
Keep in mind that implementing an ERP system is more challenging than implementing a CRM. If you want to start with the low hanging fruit, consider trying a CRM first. Make sure that your ERP can integrate with a robust CRM and vice versa. Additionally, it’s important to understand your budget and what will fit into it.
Can I use both?
Now that we’ve explored CRM vs ERP, you should have a better understanding of where they compare and contrast. It also helps to understand how there may be some overlap between the two that you can exploit if you have the resources to invest in both. The key is integrating them to get them to work for you.
Integrating the two can help with centralizing data to help reduce the amount of data that is duplicated in separate systems and drive more collaboration. According to Solutions Review, manufacturers are starting to see the benefit of integrating their ERP systems with CRM solutions to help streamline processes and increase profitability.
However, when all is said and done, the key to integrating CRM and ERP is ensuring your CRM can integrate with any ERP or that your ERP will accept 3rd-party CRM integration. This is something to consider when decided from the thousands of possible solutions on the market.
Determining which solution is best for your organization will save you time and money in the long run. Determining which solution to implement first is a good start. As we said, there are thousands of options to choose from, and making a decision can be overwhelming.
Agile CRM is an excellent bridge between the two systems, as it offers more than your average CRM. It’s an all-in-one customer relationship management system with additional features that help you improve key performance indicators (KPIs) across the board. With both sales and marketing automation capabilities, your teams will be able to do more with less time and effort. Team productivity and accountability is unsurpassed with the Agile CRM sales enablement and task management features. Plus, as part of the 500apps Infinity Suite of workplace productivity apps, you’ll be able to add even more functionality to your business.
ERP and CRM solutions are growing at such a rate that the two systems expected to have a market value of 95.4 billion within the next year. You know your business better than anyone else. The decision between CRM vs ERP is an important one. The information outlined here will give you a good foundation to start your research.