CRM vs ERP: Is the Difference Important?

By Thomas Glare December 25, 2020
CRM vs ERP

This is a complete guide to CRM vs ERP.

So if you want to get a comprehensive ERP software combined with CRM that can make running your business smoother and easier to manage, you’ll love today’s guide.

Ready?

Let’s get started.

When it comes to finding great tools to streamline your business, ERP and CRM software programs are certainly worth considering.

While ERP solutions often include some aspects of CRM, many people still feel confused about the differences between these two management systems.

Without understanding the differences, and what each service provides, it’s difficult to make an informed decision about which software to invest in.

Whether you’re running a B2B firm or managing a gaming company or a game app like a gold strike slot, it’s crucial to understand how software programs could support your ventures.

We’ll explore the key functions of ERP and CRM and why the differences between their functions matter.

Why Opt for Software Solutions?

Before we delve into the nitty-gritty of ERP and CRM, you might be wondering why online management suites are important at all?

One of the key reasons for the increasing popularity of ERP and CRM software solutions is the capacity for increased automation across various departments.

This allows companies to save time and money on manually performing tasks that can be generated automatically by smart tech.

The connectivity provided across different workflows also allows for greater communication and standardization across large companies.

This allows all departments and teams to operate within the same online database and supports seamless integration across separate workstreams.

ERP software also offers benefits such as analytics tools so you can track your business’s growth and generate financial projections.

What Are the Basics?

ERP (Enterprise Resource Planning) software tends to be more expensive to incorporate a wide range of features and applications.

ERP and CRM are often loosely distinguished by their general function.

For example, ERP primarily offers software that streamlines ‘back-office’ systems. This tends to refer to financial, manufacturing, and distributive matters, rather than sales or customer-facing roles.

CRM (Customer Relationship Management), on the other hand, tends to feature more heavily in marketing and brand/customer relations.

ERP, therefore, is a handy general tool for most large companies that want to streamline their financial and administrative processes.

CRM, in contrast, is tailored more specifically to industries and companies that rely heavily on customer engagement.

Usually, this refers to industries like retail, catering, or personal services, which have a high degree of customer-facing activities to manage.

Many ERP software programs, such as Oracle’s NetSuite, have an in-built CRM element that incorporates a customer-focused product into ERP.

However, smaller companies that specifically want to benefit from CRM services can choose a separate CRM option.

Some ERP programs also have the capacity to integrate CRM from another source, allowing the company to tailor the choice of both software elements to suit their needs.

What Is ERP Used For?

ERP is highly sophisticated and can provide a number of functions for businesses.

To get a better idea of what you need, and how ERP differs from CRM, here are some of the major functions you might find in an ERP package:

1. Finance

Financial management and planning are central to ERP capabilities. This is because financial sustainability is vital to the profitable functioning of your business.

Many ERP suites include features that will help you develop a budget or comprehensive financial forecast for the upcoming year or quarter.

The software can then help you adhere to this plan by providing consistent budget updates and helping with the management of active accounts and relevant assets.

Many ERP software units can also help you with billing and invoicing to streamline these processes across a large network of premises and clients.

This can be as simple as automating the generation of invoices to much more complex and sophisticated tasks.

For instance, ERP systems like Microsoft Dynamics 365 keep you updated with changes to legal procedures surrounding financial practices and global transfers.

2. Workforce Administration

ERP software is often favored by companies that manage a large workforce or whose enterprise spans multiple locations.

ERP systems can help ensure that teams working across different parts of the company receive standardized information regarding things like training, company practice, and changes to legal employment requirements.

Many ERPs highlight these types of functions as Human Capital Management tools.

These can be helpful in terms of automating, checking, and keeping track of employees’ pay, especially when you have a large team on the books.

Similarly, this software can be used to track employee hours or to manage workforce rotas and schedules, as well as workplace calendars.

Even tasks like automating sick leave notices or timetabling yearly holidays can make a huge difference and save you time and money as an employer.

3. Distribution and Manufacturing

Distribution and manufacturing processes can often be made easier with the implementation of company-wide ERP software.

ERP distribution services often include elements such as Supply Chain Management and Inventory Management, as well as a host of other possible functions.

As with the other functions of ERP, there is usually a lot of room for customization and personalization within these types of software.

For example, Inventory Management can encompass things like automatically registering and reordering when stock runs low.

It could also help with automating delivery processes or overseeing product quality.

Sales automation for online purchases is also a common function of both ERP and CRM software.

What Is CRM Used For?

As previously mentioned, most ERP systems allow you the opportunity to incorporate CRM into the package, either built-in or as a separate purchase.

While ERP is primarily for ‘back-office’ functions, CRM is tailored for ‘front-office’ procedures, which generally require customer interface.

This can involve several things in practice:

4. Managing Contacts

Most CRM tools, like Salesforce or HubSpot, feature substantial Contact Management centers.

This aids with compiling customer data and tracking customer behavior so that appropriate representatives and promotions can be targeted towards them.

This allows companies to gain valuable insights into customer preferences and buying behaviors.

Contact Management tools can make it easier to store this information so that when any team member interacts with this client, they can pull up a database with these details.

5. Lead Development

Generating leads is one of the most important aspects of many B2B firms, even in the most basic sense of drawing customers into a store or retail establishment.

There must be an element of tracking customer behavior and planned engagement to get people to interact with your business above others.

CRM tools can be vital for helping with this and can offer a variety of ways to enhance the quality of leads and keep track of those you find.

Incorporating tools, such as pipeline tracking to follow leads from their point of identification to interaction with the company, can make this process smoother to manage.

CRM allows you to identify drop-off points, where leads suddenly lose interest or back out, and can rectify problems that exist in the sales journey with this info.

CRM can often scan for leads elsewhere, automating the process, and making the need for lengthy manual searches less necessary.

6. Marketing Tools

By selecting the right CRM software, you can also enhance your marketing campaigns and make the most of targeted ads.

Say you run a gambling company and want to bring a slot machine mobile app, like a big chef, to the market. Or you have a new gaming promotion that you’d like to advertise to customers.

CRM tools will help you analyze the potential market size for an offer like this and run a marketing campaign that reaches people who will likely be interested.

CRM can also identify spam and duplicate activity on pages so that these instances aren’t mistaken for active customers.

(This could result in misleading data and could make targeted content difficult to produce without a clear idea of what your customer base enjoys and interacts with.)

Storing personal insights about customers on your database, such as birthdays or length of interaction with your brand, can give you the opportunity to share personalized rewards.

For example, many catering businesses will send regular customers a voucher on their birthday.

This encourages their customers to return with family and friends for a special occasion.

Having this information easily available on a database (and knowing that it’s secure and reliable) can really enhance a company’s marketing power.

7. Email Marketing Applications

Email marketing is a great way to target specific customer demographics while reaching a wide audience.

CRM will help you organize emails stored within your system so that email campaigns, newsletters, promotions, etc. can be forwarded out on mass to the right people.

Many CRM suites come with email campaign applications designed specifically to streamline this process.

CRMs can also help link sales teams and employees up with customers by aligning customer information with an employee’s expertise.

Increased personalization and efficiency are some of the best indicators for sales in the modern market in which customers expect premium and personalized care.

How to Decide If You Need CRM or ERP Software

Essentially, the difference between CRM and ERP software comes down to customer interface.

ERP is tailored towards the mass organization of your company, making things run more efficiently behind the scenes, and fine-tuning the financial and growth projection side of your business.

CRM, in contrast, is a good fit if you want help boosting your customer interactions and directing your customer traffic in a more efficient and targeted way.

Scale of company also plays a role. As mentioned previously, ERPs tend to be a bit pricier.

You should think about investing in ERPs when you want to perform an entire company wide overhaul.

It’s ideal when you’re planning to bring disparate departments together or branch out to running multiple teams across several locations.

The scope and flexibility provided by an ERP will make this integration much easier and allow for more centralized company handling.

CRMs have more specific usages and can be tailored to suit smaller businesses, like restaurants that don’t operate within a chain, or hair and beauty salons.

However, CRMs and ERPs also make excellent pairings when the two are used in tandem across larger ventures.

By selecting the right ERP software, you could effectively control both your ‘back’ and ‘front’ office through the same intelligent technological database.

This means increased awareness of financial or market fluctuations, better projection tools for budgeting and planning, and more efficient customer communication.

It’s pretty much the whole package in terms of upping your game as a business.

Key Takeaway

So, what should you keep in mind when choosing between the two?

Price, scale, business needs, and long-term planning.

We recommend shopping around and taking a close look at both types of software to get the optimal suite for your business.

This will help you develop a strong idea of what’s right for you and your business.

Over To You

Do you use CRM or ERP software to run your business?

How does this make day-to-day handling easier?

Which package did you go for?

Tell us in the comments!

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Thomas Glare

Thomas is an accountant with more than five years of experience working with small and mid-sized businesses. As a hobby, he loves writing and offers advice to anyone who is new to this crazy world that changes extremely fast.

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