What's the Difference Between ERP and CRM

What's the Difference Between ERP and CRM
Ekaterina Ryzhikova
October 18, 2021
Last updated: October 23, 2021

The use of modern technologies in the business industry has long become a necessity to maintain the competitiveness and economic potential of companies. This is a new way for small, medium and large businesses to scale and thrive. Automated systems carry out the full range of work that employees used to do. This is an incredible saving of time and effort, which is very valuable for a business, because the fewer losses, the higher the potential.

 

In today's world, the process of doing business has reached a whole new level of development. Today, people have begun to actively implement various methods that help to automate, optimize, modernize and simplify the processes of working with enterprise resources, clientele and finances and logistics. To do this, systems are created that meet the stated needs and make the business more organized. Today we will talk about the difference between ERP and CRM and learn about the features of each. It is important to note that ERP and CRM systems are designed to establish a more efficient operation of companies, they both serve to optimize certain processes and are aimed at solving problems of different specifics.

 

These software samples have become a real salvation for companies, because they reduce the risk of serious errors made as a result of inattention or incompetence of a person. They take on a huge burden of responsibility and work on themselves, while giving the staff the opportunity to channel strength and energy in a different direction, which together will give just an excellent result.

 

Quite often the question arises, what is better, ERP or CRM? But this is a bit incorrect, because we are talking about different directions and optimization of different processes. You need to start with what your company is primarily focused on, whether it is related to sales and active work with clients or something different.


Data processing.jpg

What is ERP

ERP (Enterprise Resource Planning) is a number of systems that are aimed at working with the resources of the company, that is, its personnel component, production, the logistical aspect and finances. That is, the second system has a broader range of operations, it affects several aspects of the company and is responsible for many results at once. ERP is aimed at the internal activities of the company, in particular at the organization of work processes.

 

This software is more complex and multi-level in its organization, so it is mainly used for companies aiming at large profits and doing business on a large scale. The expansion of the company's needs necessitates the use of this program. ERP is an ultra-flexible and highly confidential system that creates favorable conditions for competent analytics and optimization of the company's internal processes.

 

ERP system is a unique way to eliminate production and management problems of a company. It coordinates and optimizes production, administration, trade and financial operations. On the finance side, ERP aims to maximize business profits by providing financial summaries and in-depth analyses. It carefully enforces all requirements and regulations and simplifies your work by automating data entry. This system has become a reliable assistant to a person in the matter of coordination and effective business management, since it significantly reduces the impact of negative factors arising as a result of employee errors. It builds relationships between the internal departments of the company and optimizes their functions.

 

ERP has literally become a well-designed strategy that touches many aspects of the company and helps it grow financially and productively. Despite the fact that ERP and CRM are very important for the operation of a business, the first one still has a positive impact on deeper questions and tasks, although ERP and CRM solutions are both very significant for the company's potential. Tax and accounting make ERP an indispensable software for companies with a large financial turnover. It helps you plan your budget and allocate funds in accordance with the primary needs of the company. This is a great chance to save employees from routine activities that take up a lot of time and resources.

 

The system itself automates all processes and makes them as fast and efficient as possible, so that in case of unforeseen situations, urgent issues are resolved without wasting time. If the company uses a lot of programs in its work that are difficult to control, ERP will help to combine the results and analyze them qualitatively.

 

You will receive only the most up-to-date information on the movement of finances, goods and more. The system does not restrict you at all in the use of the device, you no longer have to return to the workplace to a specific computer every time, as you can view all the data from any device. In large companies with a huge number of employees and a variety of tasks, there is chaos, a lack of a single system of coordination and order. ERP solves these problems in an instant, because it instantly creates all the conditions for the comfortable work of different departments, helps to effectively manage finances and not to miss any data on monetary transactions.

 

In general, an ERP system is convenient, modern and efficient, since it works for the good of the company and establishes a very clear order and structure in every aspect, allowing the manager to always stay informed of the situation.


Sales data, metrics, methods.jpg

What is CRM

In short, CRM (Customer Relationship Management) is focused on working with the client base of the company. This system focuses on building a clear structure of relationships with customers to simplify subsequent processes. This system organizes information about customers who apply for the company's services. Its main purpose is to simplify the search of contacts and interaction between the manager and the potential consumer of goods or services.

 

The system stores the history of correspondence with each client, records of telephone conversations and consultations, as well as the history of orders. All this data allows you to create a portrait of the customer and understand their desires, needs and requirements. Sales psychology is built on this foundation, because demand generates supply, and for this, you need to know what your customers are primarily interested in. When the company receives a written or telephone request from a client, the manager immediately sees their data in the system, if it is a regular customer.

 

Based on the available information, the employee can make a more specific offer. If it is a new customer, their data is also entered into a single database. In addition to external interaction, CRM is aimed at the internal work of the company. With its help, you can analyze the productivity of employees, identify the most successful and hardworking ones and reward them. The system also identifies those managers who did not perform well enough and their results were insufficient for the high level of the company.

Having found out superficially what ERP and CRM are, we can delve deeper into the peculiarity of CRM systems and understand what makes them so attractive for sales companies. First of all, this software serves as a repository of information about the company's customers, which is very important for understanding the ways of generating and increasing demand for the company's services. Knowing the categories of the target audience helps to orientate in their interests and primary needs. CRM allows not only to collect a single database, but also to divide clients into groups according to certain criteria, based on which it is possible to form profitable advantages.

 

It is known that ERP and CRM software are both aimed at improving the state of companies, however, the CRM system is more focused on external interaction, that is, to optimize customer service. Storing communication channels helps managers respond faster to calls and inquiries from potential buyers, making it possible to serve more people, take more orders and provide the company with a stable increase in profits over a certain period of time.

 

Such a system allows you to increase the scale of sales and improve the quality of service. Thanks to this, customers quickly receive advice on their issues, the order is formed in the shortest possible time, respectively, the delivery speed increases. A very important aspect of establishing a relationship between a company representative and a client is the quality of service and dignified treatment of the client. This can be achieved precisely thanks to CRM. Customers will not have to wait long for a manager to contact them by phone or a convenient messenger. All this takes a few minutes, thanks to which the company demonstrates maximum respect for the client.

 

Moreover, data on the regional position of customers allows us to form proposals for options for delivery methods. Knowing the age and gender of the clients also has certain benefits.

For example, information about a client's birthday is necessary in order to make them a profitable offer on time. The person is pleased that the company has not forgotten about them and this makes them want to use its services again. CRM also focuses on improving employee productivity by identifying the most active managers who have completed the most successful deals.

 

Also, with its help, you can get rid of unreliable and non-executive employees. This is the most accurate way to track the dynamics of personnel performance and make a wise decision in accordance with the data obtained.


banner_1-04.jpg

Who uses ERP

Since the ERP system is a difficult and complex software, it is logical to assume that it is primarily used by large companies that strive for constant growth and increased profits. In the case of such a large-scale business, there will be no question about ERP vs CRM, since ERP will be a priority variant. ERP is also used by companies that have branches at their disposal.

 

The system establishes coordination between all departments and monitors the overall level of production. This helps to conduct thorough and high-quality analytics, and based on the results, develop marketing strategies. This is the creation of a whole network in which everything is interconnected, including business partners, customers, employees and suppliers.

 

The introduction of this system is mainly due to the complexity of the record-keeping. This program can increase the competitiveness of your company and boost its activities. Before using ERP, you need to analyze whether you really need it, because it is expensive software that works well in the case of large enterprises. If your company has not yet reached a high level of profit, then this system will only entail financial losses. It is able to increase the percentage of profits of large and strong companies that can afford its possession.


Who uses CRM

With CRM, everything is much easier, since this system is more accessible and simpler. It can be used even by small companies that have made the sale of goods and services their main focus. It is a very effective tool that can transform a small business into a larger and more developed one. If you are focused on sales of products, then in the CRM versus ERP question you choose CRM.

 

Today CRM/ERP software is very popular and shows really great results. However, it is important to take into account the specifics of the business. CRM is actively used by online stores that have a huge number of customers and need to create a common database to store information about their target audience. Also, this software is useful for company leaders, because it helps to assess the productivity of employees.

 

Using CRM, you can find lazy and irresponsible managers and fire them. The system also has an important role in the security of the company, since single data storage is able to secure valuable information and in the event of the dismissal of one of the employees, they will not be able to transfer or sell this data to competitors.

 

Of course, both CRM and ERP systems are very reliable and safe, but if you work more with clients, then you should pay attention to the first option, because the second is more suitable for automating and regulating internal business processes.


b24_march_3-11.jpg

Which is better for my business

If you are faced with a choice of which is better, CRM or ERP, then you should know that there is nothing better or worse, there is only a degree of individual need for a particular system. This is why you first have to decide what your company is focusing on in order to decide exactly what will benefit you the most. Today ERP and CRM systems are widespread in world business and very often companies use both options at once, but this requires a need. If you are an aspiring entrepreneur looking to build a successful sales business, then you better opt for CRM. The active use of ERP/CRM software has slightly erased the differences between them, so many people still do not understand what features each system has.

 

These are not the same, it is important to know, as you may find yourself in a difficult situation, deciding to use something that does not actually meet the needs of your activity. To make the right decision regarding the choice of ERP and CRM, you need to find out which processes require more attention and automation. If your employees do not cope with accounting, logistics and finance, of course, you should immediately resort to ERP help, but if your managers are literally choking on the endless stream of client requests, you urgently need CRM. Knowing your company's personal needs will help you make the wisest choice. Do not hope that both systems will improve your situation for the better, this is just a tool that can improve your results.

 

Do everything possible so that things in your company go well without the participation of various systems, and then ERP or CRM will be guaranteed to increase the chances of your business success. Also, a very important point is the analysis of staff productivity. If your company is at the beginning of its business journey, and the number of customers is growing at a slow rate, you can cope without the help of support systems. In order to decide for sure what is best for your business, you can turn to deep analysis to assess the potential of your company and decide whether the ERP or CRM system will be just an additional waste or a profitable investment.

 

Very often, in the pursuit of profit, many entrepreneurs make fatal mistakes, spending large sums of money on something that is completely unnecessary. That is why it is important to be able to adequately assess the current state of your business and weigh all the factors. CRM and ERP can work together effectively and demonstrate high results. These two systems are capable of reinforcing each other and simplifying many processes, so if you see such a need, you can use them in a complex. Be responsible and critically evaluate every detail, because your main task is to bring your company to a new level of prosperity, and not cause its financial collapse and stagnation.

 

Free. Unlimited. Online.
Bitrix24 is a place where everyone can communicate, collaborate on tasks and projects, manage clients and do much more.
You may also like
Kids, COVID-19, and Working From Home: How to Manage It All
The Top 9 Website Blockers For Productivity and Focus
How to Create a Customer Journey Map
5 Tips For More Effective HR Work In Your Company