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While ERP and CRM software have some overlapping features and characteristics, their core functions are vastly different. It’s important to understand these key differences to know what might be best for your company.

What is ERP?

ERP is an acronym for enterprise resource planning. ERP software is all about the back office. The goal of ERP software is to make business processes more efficient and decrease money spent on managing those processes. ERP software is designed to manage key components of your business, from accounting, to human resources to inventory and supply chain. ERP software is also highly data-driven. Because it provides an integrated approach to company systems, ERP software can provide updated information like reports and track issues and trends. This allows you to head off potential problems and focus on business management and planning.

What is CRM?

CRM software is all about the front office. It stands for customer relationship management. While ERP software focuses on the business, CRM software focuses on the customer. CRM software tracks customer information across departments. It also houses information on potential new customers as well and can be a valuable tool in tracking leads or creating marketing campaigns. CRM also allows for the synchronization of sales, marketing and customer service data. The best CRM software tracks multiple customer interactions between departments. This can foster better customer relationships via easy access to pertinent client information.

Which should I choose for my business?

The answer for most companies is that both. CRM and ERP are often both needed to maximize efficiencies and automate manual processes.

Both systems are about increasing efficiency and hopefully profitability for your company. They just approach this from different angles. There are several factors to consider when choosing the software that is best for your company. It’s important to have both an ERP system for business management and a CRM system for customer data management. However, you can achieve this a few different ways.

Many ERP systems have a CRM component. This option allows you to have one system that handles everything. Keep in mind that the CRM component may not be as advanced as a standalone CRM system, so it is important to assess what is needed for your business. In many cases it may prove sufficient for your needs. The most popular stand-alone CRM systems typically come at a high price. You may not need the Cadillac of systems when the Chevy will perform just fine. 

If you choose to pursue a standalone CRM system alongside your ERP system, integration is key. Without proper integration, your company may find communication between departments lost in translation. This is never a good option. The good news is that integration between the two has become easier because standalone CRM systems are often built/designed to be integrated. 

4. Both CRM and ERP Have Value

ERP and CRM software are both valuable assets that allow you to make better decisions, generate reports and manage business success in today’s competitive market. While there is certainly overlap between ERP and CRM systems, understanding the differences is key to making good business decisions. Soliciting the help of an independent ERP consultant can help you make smart strategic decisions since they are well-versed in both types of software.  For more information, be sure to download our Clash of the Titans Report, which breaks down some of the biggest names in ERP.

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