CRM vs. ERP: What’s the Difference?
CRM exists both as a stand-alone software and as a component within ERP software. This leads to a lot of confusion. What are the differences between CRM vs. ERP? Which solution should businesses purchase?
CRM stands for Customer Relationship Management. CRM software tracks data regarding all the interactions with customers to build long-term relationships that will result in more revenue. CRM tools are best for businesses with large sales teams, extensive customers or leads, or where tracking interactions with the customer is a primary focus.
ERP stands for Enterprise Resource Planning. ERP software tracks data within the entire company to help connect the business and cut costs. ERP platforms are best for businesses with multiple departments that currently operate independently, or for companies preparing to scale.
What are the differences between CRM and ERP?
The simplest distinction between CRM and ERP software can be found in the first words of the respective acronyms. CRM is primarily concerned with data regarding the customer while ERP is concerned with data throughout the enterprise.
As a consequence, though both CRM and ERP are data tracking tools aimed at making a business more profitable, the way each achieves that is very different.
CRM increases profits by improving customer relationships in the long term. By creating a store of data, CRM assists a business in converting leads to paying customers, as well as retaining those who are already customers. If multiple employees interact with a particular client, CRM also helps information flow smoothly between each of them. This allows salespeople, marketing, etc. to understand a customer’s long-term situation and then offer more value based on that, thus increasing revenue for the company.
Meanwhile, ERP increases profits by connecting data throughout various departments in the enterprise, allowing it to optimize its business processes and cut costs. Having one store of information keeps the business connected and consistent. It eliminates issues arising from a lack of information sharing. It also helps develop insights based on that data to optimize business processes and how the company functions as a whole.
Since ERP contains data throughout the entire company, it inevitably is much broader in scope than CRM and can even include CRM as a module (other common modules include sales, human resources, accounting, and distribution). As such, companies can purchase separate CRM and ERP softwares, or integrate their CRM with their ERP platform to increase consistency in data.
Which software should my business use?
Both CRM and ERP software are valuable in their own ways. What your business should choose depends on its current situation.
CRM is a good tool for companies with many customers or leads, or companies trying to expand their customers or leads. This can be useful for any size of business.
Meanwhile, ERP is a good tool for companies with many departments trying to enhance information sharing or get a top-down view into the business. This becomes more useful as a company gets larger and more complicated.
Companies can look into integrating the CRM they already have with ERP systems or purchase one ERP that includes both.
Bista Solutions offers both ERP and CRM software and can help integrate already-existing CRM into an ERP system. If you have any questions or are interested in one of these services, contact us at firstname.lastname@example.org.