ERP and CRM systems are two of the most common types of software. Businesses look at them when they want to automate their basic business tasks (CRM). Enterprise resource planning (ERP) helps companies run smoothly by putting all their financial and operational data in one place.
Both are important places to store data. Both have many different departments and their software is often bought separately and then put together when needed. However, they may both use the same platform.
I will compare ERP and customer relationship management (CRM) in this article to help you decide if your business needs ERP, CRM, or both.
What Is a CRM?
CRM systems help businesses keep track of how they interact with their customers. Specialists made the first CRM tools for use in the sales department. Here they were sometimes called sales force automation (SFA).
As soon as the phone became another way to help customers, new technologies quickly emerged. The technologies in the data center came to be known as the contact center. Software companies started to strengthen all of these facets into a single department.
They dubbed it customer relation management. Software companies did so via a combo of acquisition and enhancement. When CRM software is combined with call center infrastructure, the resulting setup is far more effective in the call center.
For example, this enables the agent to load their CRM screen instantly whenever they get a call. In addition to enhancing productivity, this frees the agent to spend more time resolving the customer’s problem and less time inputting data.
Integration also involves the automated addition of contact records to the CRM for call centers. Moreover, the creation of tiebacks to call recordings is also included so they may be listened to from inside the call center CRM application.
What Is an ERP?
ERP grew out of material requirements planning (MRP). It helped manufacturers keep track of all the resources needed to run a successful business and plan how to use them. ERP is a database that all parts of an organization can use.
This implies finances, such as the payables, accounts receivable, general ledger (GL), payroll, and financial reporting. ERP also includes managing orders, inventory, the supply chain, and data related to the service organizations. Moreso, ERP is used for buying, making, distributing, and fulfilling orders.
Beneficiaries of CRM
Organizations of all sizes and types use CRM solutions to manage client relationships. Following is the list of a few businesses where CRM has become a necessity:
- Operations performed by a single, independent contractor
- Localized online shopping
- Startups & SMEs
- Middle-sized companies
- Institutionalized businesses
Localized online shopping is one of the fastest-growing segments of the e-commerce market, and CRM systems are essential for businesses in this sector. By using CRM to manage your customer data, you can increase your sales. Additionally, by tracking customer behavior across different channels (online, offline, social media), you can identify opportunities for cross-selling and upselling leads.
Startups and SMEs also benefit from CRM because it helps them build trust with their customers. By providing excellent customer service, startups can retain more loyal customers and boost revenue growth. In addition, by using CRM to monitor social media posts and gather feedback from users, SMEs can improve their product quality and churn rates.
Middle-sized companies also stand to gain a lot from CRM systems because they often find it difficult to keep track of all the different channels through which their customers interact with them. By using CRM software to manage all these channels in one place, companies can streamline their operations and focus on what matters most: serving their customers effectively.
No matter your position, a customer relationship management system may help your business maintain reliable connections with its clientele.
Beneficiaries of ERP
An enterprise resource planning (ERP) system is helpful for businesses or organizations that need to manage repetitive daily tasks in one central location. Among them are necessities for running a business, such as:
- Human Resource
- Accounting
- Management and creation of projects
- Income and Receipts
- Supply chains or supply networks
Human resources management is a critical part of any organization, and an ERP system can help streamline the process by providing employee record management (ERM), including tracking employee progression and performance, payroll processing, and benefits enrollment. It can also automate employee communications and tracking tools such as email notifications, chatbots, or workflows.
Accounting is another area where an ERP system can be extremely helpful. By automating financial reports and invoicing software, ERP systems can help organizations manage their finances more efficiently. They can also improve accuracy by tracking expenses across departments or suppliers to ensure that funds are being spent properly.
Supply chain management is another area where an ERP system can be beneficial. By automating order entry processes and managing stock inventory, an ERP system can reduce waste and errors in the supply chain. Additionally, it can help identify problems early on so that they don’t become bigger issues down the line.
Which System Is Suitable for Your Business?
ERP and CRM systems can provide invaluable data-driven insights for many businesses. Yet, it is essential to cautiously analyze each option’s harms and benefits before finalizing your decision. The primary distinction between these two applications lies in the data used to make business inferences.
Customer relationship management (CRM) software processes data from the outside world about existing and potential customers to better direct salespeople’s activities. Knowledge gained through CRM is client-centric and context-aware at every level of analysis and decision-making.
In contrast, enterprise resource planning (ERP) software draws heavily on an organization’s internal data. Most of this data comes directly from its financial resources. The information standardizes processes, enhances corporate operations, and combines previously separate divisions.
While integrating external data into ERP systems is similar to CRM systems, it is simply one component of the latter. If your business requires this analysis, you should utilize CRM software components rather than an ERP system due to the former’s superior functionality in this area.
Indicators that Your Company Needs a CRM
You may feel downtrodden because you believe the business might expand faster or it might increase that you need more time to chart a course forward. Still, despite this, the following are ten compelling arguments in favor of using CRM:
- Information about your customers is dispersed
- There needs to be more insight into the sales department
- You’ve got much too many people to keep track of
- Dissatisfied clients often voice their opinions regarding service and assistance
- Inaccurate and time-consuming manual data collection is a significant problem
- Furthermore, manual reporting is time-consuming
- You need to work on zeroing in on the best potential clients
- Dealing with the influx of leads is getting more challenging
- Your methods of interaction need to be streamlined
- It is your goal to reduce costs associated with expanding your current activities
Indicators that Your Company Needs an ERP
It’s reasonable for SMBs and MSBs to wonder whether they require a complex ERP system. The answer is conditional on the state of affairs in your store. It also depends on your knowledge of the subsequent best investments you can make to maximize profits.
Here are ten general indications of why an enterprise resource planning system may be beneficial:
- Inaccurate product pricing
- Systems that need to be integrated cause delays
- Inventory that isn’t right
- Problems with production scheduling all the time
- Dissatisfied customers
- Separated channels of communication
- Future expansion
- Using humans in business processes
- Challenges in obtaining useful information
- Data quality management and reporting to regulatory bodies
Conclusion
For salespeople, CRM is an indispensable resource. The use of customer relationship management systems (CRMs) has expanded in recent years to include marketing and customer service agents.
ERPs manage everything happening in the background or what the customer is not privy to. The system handles inventory and distribution. It helps you figure out how to make something or research and develop something new.
Thus, the crucial query is whether or not an ERP or CRM is more appropriate. You might need an enterprise resource planning system if your company has a large workforce across multiple locations.
Startups, SMBs, and even one-person operations may all benefit from using a CRM system. Furthermore, if your business offers customized services, such as private tuition or consultation, CRMs will provide quicker results. Many ERPs come equipped with customer-facing features, some CRMs even have tools to aid financial management and stock-taking. To summarize, a customer relationship management system is essential if increasing revenue is a current prio
Also read: 10 CRM Software Features That Will Help You Increase Sales
