The Difference Between a CRM System and an ERP System
Quick Links: What Is An ERP? | Benefits Of ERP Systems | Difference Between CRM and ERP | Why Your Organization Needs Both CRM And ERP | Benefits Of CRM Systems | Benefits Of Choosing An ERP With Integrated CRM | Implement An Integrated ERP To Solve Problems | What Is A CRM?
Business processes today all involve strategizing, planning, managing resources and producing goods or services for profit. The way those business processes are executed, though, has evolved.
Software and hardware systems have graduated business owners from regular spreadsheets and endless paper filings to digital-first systems. Programs now exist that unlock end-to-end enterprise resource planning and administration. With a few clicks, business processes are at your fingertips, from inventory management and order forecasting to freight calculations and human resource payroll. In short, these pieces of software mean you can manage your business from one program, on one screen, from anywhere.
CRM and ERP software systems make running a business like this a reality. But which do your operations need, and why? This article compares today’s ERP and CRM software systems — what they are, how they work, and which makes sense to simplify running your business.
Enterprise resource planning (ERP) systems are programs that streamline all the back-office operations necessary to run a successful business.
From one portal, you can access and analyze:
- Custom project workflows
- Forecasting and procurement
- Inventory management
- Order processing and turnover
- Supply chain oversight
- Freight and transportation calculations
- And much more
In other words, ERP systems simplify and then optimize the daily tasks you already undertake to run your business. Programmed for breadth and depth, your operations now have one platform to review company assets and activities, then plan accordingly.
Along with the peace of mind that your business is running like a well-oiled machine, modern ERP software solutions generate the following advantages:
- Reduced silos: Integrate initiatives from strategic planning, marketing, accounting, sales, supply chain management, distribution and more. What previously took half a dozen specialty computer platforms — with half a dozen logins, passwords, individual department managers and access-only securities systems — is now housed in one spot for all to use.
- Data synchronization: ERP systems generate cohesive data accessible to all team members and departments. ERP systems can also be programmed to automatically rekey data from other software programs you’re still using. This means you won’t have to waste time copying, pasting or manually re-entering information from one file or program to another — the ERP system’s custom rules and specs automatically do this for you.
- Cost and time savings: Time and money are premiums in today’s competitive business landscape. ERP software eliminates redundant manual back-office computer tasks. You program workflows, inventory orders, payments, notices and more to initiate automatically from the digital system, then tweak and tailor these activities as you go.
In short, ERPs take rote back-office task-management off your shoulders so you can focus on value-adding business goals, not robotic, outdated administrative work.
Download the complete guide to ERP Selection And Implementation For The Apparel IndustryGet Your Guide Today
Customer relationship management (CRM) systems streamline the range of initiatives businesses take to connect with current and potential customers. It’s a specialized digital-marketing tool that helps businesses create, launch and then manage marketing efforts more strategically.
CRM portals are often compared to address books on steroids. CRM software, indeed, houses the personal details of current and prospective customers, such as names, phone numbers and addresses. But CRM systems take marketing efforts up a notch by giving businesses more consumer insights — and offering more ways — to identify target audiences and remain relevant in their minds.
CRM software manages much of the following customer information:
- Personal data, primarily full names, addresses, email accounts and phone numbers
- Social data, or what they choose to share via social media, such as user location, languages spoken, interests noted, pages liked and even links shared
- Transaction history, namely the products or service purchase histories within your company’s industry
- Engagement metrics, including website interaction, social media page interaction, subscriptions and more
There are a few different types of CRM software available. Depending on your company’s current marketing gaps or concentrations, one CRM portal may provide the niche sales capabilities you’re looking for, while another can deliver end-to-end, lead-to-loyalty custom marketing pipelines.
Customer-relationship management software allows you to:
- Access 360-degree views of current and target customers
- Build customer groups or lists based on marketing profiles
- Create more targeted, more informed digital campaigns
- Launch campaigns on strategic platforms such as websites, social media and email to capture leads where they are
- Review campaign metrics using a cohesive, department-agnostic platform
- Manage multiple campaigns at once, such as serialized email campaigns, landing page redirects, social media ads, special sales, promotions and more sent to customers based on their exact spot in the sales funnel
In general, CRM allows your business to up its marketing game with more information, more customization and more command of campaigns, placed in front of the right eyes at the right time.
Difference Between Enterprise Resource Planning Software and Customer Relationship Management Software
The main difference between ERP and CRM systems are their focuses:
- CRM software is dedicated to customers. Its very name suggests this emphasis on customer touchpoints, customer interactions and customer management, all funneled into improved marketing presence.
- ERP software covers the entire business. ERPs contain functions that automate and manage nearly all major activities behind running a business. Rather than just focusing solely on better marketing initiatives, ERP software streamlines and improves cross-department, back-office functionality.
It’s important to note, however, that CRM processes can be integrated into most ERP software — but ERP cannot be integrated into CRM. The broader scope of ERP software allows its platform to manage many of the marketing functions CRM programs do. However, CRMs are too focused to tackle the cross-department responsibilities of traditional ERPs.
Other differences between CRM systems and ERP systems include:
- Success metrics: CRM success metrics revolve around customer acquisition and retention, which leads to higher profits. Your business sets clear, quantifiable goals — such as closing 15 percent more sales, reducing sales cart abandonment rates by 20 percent or increasing e-newsletter subscriptions — then allows CRM to assist in tracking and analyzing these goals. By contrast, ERP’s success metrics span across business departments, including accounting, invoicing, order procurement, vendor management, distribution timelines and more.
- Methods to increase profit: ERP systems produce higher profit margins through cutting operational and overhead costs. CRM systems drive greater profits by increasing customer pools and therefore sales and service volumes. The former trims costs, while the latter maximizes current dollars spent.
- Typical users: ERP systems are geared to cross-level production and operations logistics. ERP users are therefore typically department heads or those with executive-level decision-making roles across all business processes. On the other hand, CRM systems are used primarily by sales and sales-support staff handling consumer-facing operations.
The size, scale and complexity of your business will be the most significant determinants in ERP and CRM implementation. Both streamline invaluable business processes to make certain aspects of running your businesses easier. Yet together, an ERP system with integrated CRM capabilities provides the strongest foothold for every individual in the organization to stay up-to-date, informed and cost-effective — plus experience many other advantages.
1. Informed Resource Allocation
More informed resource allocation allows projects and personnel to get the resources they need proactively rather than reactively.
ERP-integrated CRM systems reduce costs and generate larger sales revenue. The former frees capital that was previously tied up in operational inefficiencies, while the latter increases business capital. Combined with the ERP’s data visualization and analytics capabilities, you can funnel your widened money pool exactly where it’s most needed.
2. Easier Communication and Collaboration
Fully integrated ERP and CRM systems make everyone’s jobs easier. From the accounts payable department and warehouse pickers to supply chain managers and delivery truck drivers, these systems allow you to craft comprehensive workflows that transform task routing and approval. The result is office-to-warehouse-to-road productivity increases and employees who know where to turn at every stage of the workflow.
Plus, since ERP software is department-agnostic, all key stakeholders have access to it. ERP software can be internal or cloud-hosted, whichever works for your current business scale.
3. Unlocked Automation Potential
CRM-ERP integrated systems automate previously time-consuming manual work. You program your workflows and task notices, set system rules and then let the program take care of the rest — recording customer transactions, generating reports, noting interactions, filing forms, routing tasks, refilling orders, stocking inventory and more.
4. Improved Market Intelligence
Market intelligence refers to decision-making abilities that position your business for enhanced market share. Perhaps you want to start selling products in a new geographic market, advertise services through new branding channels or explore an emerging business opportunity together with your current offerings. Because of ERP’s and CRM’s data-backed programming, you can “take the temperature” of such initiatives, determining if you have the resources and business processes in place to make the market leap.
5. Enhanced Data-Backed Decision-Making
Wielding ERP and CRM-integrated software balances two significant business goals — minimizing expenses and increasing revenue. Your business doesn’t have to choose between being leaner or being larger. CRM software can give verifiable, numbers-backed insights on how to do both simultaneously. Data-driven decisions give you confidence that you’re managing your assets as best you can — then you can find ways to do so even better.
Selecting ERP software with CRM integration capabilities unleashes the full potential of digital tools. Your business processes get handled in one place, your employees get trained on one platform and your infrastructure scales from one rather than multiple, harder-to-manage points.
In other words, ERP with integrated CRM is easier — for you, for your workers and for your organization’s future. The business benefits of streamlining operations extend even beyond this.
1. Harmonized Enterprise Data
Fully integrated ERP software solutions are your data dashboard. Think of them as a one-stop shop to gauge how critical back-office work is being conducted, then how those operations are adding or detracting from your ability to deliver on core products or services.
Synchronizing large swaths of business data is time-consuming and complex. Combining information from previously siloed platforms and business departments was only the first stage, too. Your business leaders and stakeholders must then create actionable plans and ideas from that data.
Achieving both sides of this equation — streamlining data and generating it into real-time insights — is easier when you’re working in one unified platform, as is the case with ERP-integrated CRM.
2. More Efficient Operations
Many businesses understandably struggle to unite individual department goals under the guiding help of long-term, strategic ones. With their automation rules and newly tailored workflow capabilities, fully integrated CRM software solutions unsaddle departments from yesterday’s perfunctory tasks. These same departments instead can pivot from the rudimentary into the strategic, with more time and more personnel committed to high-order directives.
Everyday work processes become more efficient as a result. Integrated ERP software lets your employees:
- Review the same standardized data
- Share the same reports, calendars and alerts
- Tag relevant personnel
- Pass along work routes, notices and information onto anyone in the entire organization
Interdepartmental work becomes organized and linear, accessible on-demand.
3. Competitive Advantage and Overall Profitability of a Business
Consider all the ways an ERP’s data and automated workflows lends your business a new edge:
- Consumer insights: Learn more about the likes, interests and motivations of your target consumers, then use those insights to fuel stronger marketing campaigns. Build target customer profiles and create savvier touchpoints at every point of the sale’s funnel.
- Branding: Leverage your business to reach and connect with ideal buyers, both past and potential, on informed emotional and logistical levels
- Product development: Comb through large swaths of new customer data to understand what products and services your market really wants — then position yourself as the leading provider.
- Inventory forecasting and procurement: Wield a tighter, faster and more agile warehouse thanks to automated supply chain workflows and order forecasting. Improve product turnover rates, strengthen accurate yet speedy pick orders and set up just-in-time inventory restocking schedules to further reduce operational costs.
- Transportation and delivery: More accurately analyze freight and mobile fleet transportation expenses, timelines and delivery schedules, then tweak operations using the new data-backed insights.
- Accounting: Automate many routine human resources, payroll, accounts payable and accounts receivable functions that previously bogged down employees whose time and talent is better spent elsewhere
Armed with all this new data and unsiloed personnel, your business can thrive as it was built to, seeing leaner, greener operations along the way.
Implement an Integrated ERP to Solve Problems and Cure Pain Points for Your Most Critical Business Processes
FDM4’s ERP system is built to be turnkey, scalable and secure, growing as your business does. Our web-based platform contains the customer-centric CRM branches necessary for complete process enhancements, without sacrificing the business-critical functions of ERP workflow and resource management.