ERP vs. CRM: Difference, Benefits, Drawbacks, and Tips for Integration

Perceive the difference between ERP vs. CRM and the benefits of using them within an organization, along with some tips for integration.

After learning the high cost of hiring skilled professionals from the market, businesses have realized the importance of increasing productivity through existing employees, which can lead to upsurged revenue generation down the line. But the question comes, is that a viable option to implement? Well, if you listen to some industry experts out there, they will suggest choosing automation instead of pressuring your loyal workers to boost organizational productivity. Yes, CRM and ERP are two such applications that can help automate key workflows in your entity. But the query surfaces: what are they, and what is the difference between ERP and CRM? You will deeply learn about both these things in this prose today. So, let’s go further with:

What Is CRM?

CRM stands for Customer Relationship Management, which is an enterprise-oriented software, coming in handy in automating how a consumer interacts with your business. It is just a part of a massive set of customer experience applications that may feature solutions for:

  • Marketing
  • Advertising
  • eCommerce
  • Customer service

According to a top enterprise software solutions provider, a CRM system turns out to be useful for tracking and storing all collected consumer data, including:

  • Customer communications with sales executive
  • Proposals
  • Purchase history
  • Service requests

What Are the Benefits of CRM in the ERP vs. CRM Comparison?

1. Increases Productivity

The combination of CRM tools and automation simplifies common and monotonous jobs, such as data entry and customer information update. It expedites processes, minimizes errors, and frees staff to focus on more meaningful tasks.

2. Enhances Customer Service

There are instances when customers have to explain their pain points to a different representative each time during their interaction with the customer support team. That’s where CRM can be extremely helpful in creating more accurate customer profiles that can accelerate response time and ensure smoother collaboration among sales, service, and marketing executives by managing customer data in one place as per a popular CRM development services provider. Resultantly, customer satisfaction increases along with the chance of a first-time buyer turning into a repeat buyer simultaneously.

3. Extracts Insight

CRM generates and handles a considerable amount of data, including:

  • Customer demographics
  • Their preferences
  • Their buying history
  • Their interactions with your company

This data can be analyzed to improve several aspects of the customer relationship, including but not limited to managing invoices and enhancing sales forecasting. Apart from that, it can also give software developers imperative insights about consumer needs and demands so that they can create the most relevant product and service in accordance with the topmost CRM system services provider.

What Is ERP?

Also known as Enterprise Resource Planning, ERP is a unique type of business software that handles, automates, and connects day-to-day back-office business processes, such as:

  • Accounting
  • Procurement
  • Supply chain management
  • Risk management
  • Project management
  • Human resources

This type of software may also include Enterprise Performance Management, which helps in planning, budgeting, predicting, and reporting an organization’s financial results. Bringing these business processes on a single platform can simplify workflows and streamline operations, showing the superiority of ERP in ERP vs. CRM comparison.

What Are the Benefits of ERP in the ERP vs. CRM Comparison?

1. Boosts Efficiency

Advanced ERP systems that are built today tap process automation and artificial intelligence to refine manual, repetitive tasks that are likely to cause human error. For example, if finance and accounting processes get automated with ERP, entities can reduce the time it takes to close their books. Consequently, it will allow employees to focus on more important tasks, showing one solid reason to pick ERP in ERP vs. CRM comparison.

2. Saves Money

Another thing you must grasp about ERP is that it reduces operational costs by combining multiple business functions with a single system and automating processes across the entire firm. This way, many administrative and operational costs are eliminated, be it related to manual data entry tasks or redundant processes out there. In fact, an affordable health plan provider in the USA saved almost $500,000 in costs by incorporating an ERP system.

3. Improves Decision-Making

In the ERP vs. CRM comparison, an enterprise-level ERP system provides users with an all-inclusive view of financial and operational performance, along with custom reports and real-time insights. It can also mitigate the time required to complete various jobs by making processes more forthright and lowering the time spent on searching for the desired information. This, paired with automated processes and connected systems, allows teams to get precise information, helping them make decisions quickly so they can react to changing business conditions.

What Is the Main Difference Between ERP vs. CRM?

What is the Main Difference Between ERP vs. CRM

The first and foremost thing you need to understand here is that both CRM and ERP systems help businesses:

  • Upsurge productivity
  • Enhance automation
  • Increase revenue generation

But when it comes to differences in ERP vs. CRM, the former is used for financial data and operations, while the latter is used on the sales and consumer service sides of the business. In short, ERP systems support back-office work, like:

  • Accounting
  • Procurement
  • HR
  • Compliance

And CRM systems support front-office work, such as:

  • Marketing
  • Sales
  • Service

Still looking for the most important information? Well, several ERPs do have CRM functionalities, but CRMs do not have ERP functionalities. Still, one cannot replace the other, given that ERP vs. CRM are key components of a successful business IT system.

What Are Some Tips for Integrating ERP and CRM Systems?

How to Create a Successful ERP and CRM Integration Strategy

It is necessary for ERP and CRM systems to be capable of sharing data, which can be accomplished through:

  • Technical integration
  • Maintaining two sets of data separately

A case in point here is that a sales executive might show a willingness to access a patron’s order status, credit status, or outstanding payments when running an upsell or cross-sell campaign. On the other hand, the finance department might have to get access to the CRM system to calculate sales commissions of personnel when preparing payroll or offering bulk order discounts to someone.

A CRM system built in an ERP platform also comes as an advantage for business leaders who may need a combined method to check pricing structures and manage KPIs, such as:

  • Customer acquisition costs
  • Customer lifetime value

One common method that needs robust integration between ERP vs. CRM is Configure, Price, Quote, or CPQ. This tool needs data in both ERP and CRM systems and is important for a myriad of businesses. The bigger CRM and ERP merchants have prebuilt integrations for one another that they or a third-party partner provides. However, these integrations can be pricey and tough to maintain when the ERP or CRM system sifts through an update.

The Endnote

That’s all for now! If you liked this write-up, share it on your network and enlighten others about ERP vs. CRM. Apart from that, if you need any help with ERP or CRM integration right away, you can have a word with an IT system expert in the industry.

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