Often, we receive leads asking about ERP and CRM, doubting the functionalities of each one, without knowing their differences very well and, consequently, having doubts about which software interests them most for their business. As we have seen that this doubt is common in Spanish SMEs, we are going to try to explain the differences between both management software, marking distances and, we hope, clarifying concepts:
ERP or CRM are those that respond to different concepts but are included in the term business management: ERP makes mention of business resource planning (Enterprise Resources Planning) and CRM refers to the management of customer relationships (Customer Relationship Management). But what is this? We tell you:
In relation to all this and before delving into the differences between ERP and CRM, we recommend this extensive article on what CRM is as a software and business model. Now, let’s see what these two concepts refer to, how they coexist within the company and who they involve.
What functions do ERP and CRM have in an SME?
To tell the truth, both the implementation of an ERP and a CRM seeks to adapt the company or SME to the digital transformation, improving productivity, control and efficiency, but their fields of action are different:
The ERP or Back Office of a company
An ERP is a software “back office”, that is, internal use and procedures that do not directly impact the relationship with customers. An ERP works on the exchange of information between departments and their control, helping to reduce production costs, control stock and storage, supervise sales (not in their management, but for example in viewing which products are the best sellers), invoice control and accounting or payroll administration. That is to say, an ERP controls a large part of a company’s internal processes, for example, giving input to the production department about the best-selling products and at the same time sharing information with the financial department about costs, benefits, etc.
In short, an ERP, which is usually a modular tool, acts on the following dimensions of a company:
- Production
- Names
- Sales control
- Stock control
- Accounting and finance
- Supply and suppliers
The final objective of an ERP is to centralize the comprehensive management of a company in one tool, seeking better interdepartmental communication and better access to data.
Now, an ERP is a complex software that requires complex actions and decisions. By combining so many departments, hiring them is usually expensive; As it is often custom-made, maintenance is also custom-made; By bringing together so much information, learning and training is usually long and complex. By bringing together so many parties, the same happens with the implementation of the software, requiring time, effort and money.
Therefore, an ERP is usually a software that is installed in medium and large-sized companies since we are talking about a significant investment both in economic aspects, as well as in time and personnel. At the same time, not all companies manage stock or manufacture products (such as agencies, consultancies and other professional services companies, essential modules when taking advantage of an ERP. There are many questions that a company must ask itself before to undertake an implementation of this magnitude and in the same way, think that not all companies, either by size or nature, need it.
But we do not create misunderstandings, both an ERP and CRM are tools that usually have a positive impact on a company and an ERP, given its great breadth, can contribute great things to the balance sheet of a company.
The CRM, “front office” of a company and software to create objectives and propose strategy
Once the ERP has been reviewed, it is the turn of the CRM. A software that is also considered a “front office” because it is a tool that does affect the relationship with clients and external processes. The purpose of CRM is to organize customer information, put it at the center of the company, help in management or commercial monitoring and be able to draw up both sales and marketing strategies.
Unlike an ERP, CRM contains customer information, making it a more dynamic and agile tool both in use, implementation, learning, functionalities and price.
CRM is not a new concept, what can be is the technology behind one tool or another and its democratization to the SME, but it has been inscribed in all manuals and management examples for some time. CRM refers to a business model that seeks to identify the most valuable leads for the company and manage their relationships in an efficient and decisive way in order to achieve not only sales but also loyalty.
The main functions of a CRM and what can be expected from it are:
- The automation of sales processes, from lead registration, follow-up, alert system or task management.
- Store and activate customer information such as emails, positions, interactions with the company, meetings, source attribution, etc.
- Creation of segments for different objectives in marketing or sales, such as strategy planning, communication segmentation, sales forecast, construction of buyer personas…
The implementation of aCRM is essential to carry out refined and accurate marketingSince, in a context like the current one, promotional or communication actions must be segmented as much as possible to increase conversion ratios and minimize costs both per lead and per customer.
Needless to say, CRM is also key to the correct performance of the commercial departmentof any company. Especially in SMEs, accustomed to working with Excel, since it helps to professionalize the sales cycle and carry out accurate and personal follow-up of each lead to end up offering better sales results.
In short, CRM is customer-focused software whose purpose is to improve your relationship with the company (both before the sale and after) and increase sales. And in this case and unlike ERP, CRM is useful in all types of companies because what company can afford to do without sales?
Can companies work with ERP and CRM at the same time?
It will depend on the nature of each company and the suitability of implementing two tools with such deep impact on it. In fact, traditional ERP implementations used to incorporate a CRM module. However, the ERP developers themselves usually have an external and independent CRM since it is advisable to have software dedicated especially to the commercial task.
That said, ERP and CRM are fully compatible. They are different and have to be measured by different standards, but their work in the company is complementary. Both tools are designed to make the most of the company’s resources, so the question will be more about needs, and especially the economic capabilities of the company or SME that wishes to implement it.
ERP or CRM? The answer may be Teamleader
Knowing that not all SMEs do not need or can afford the implementation of an ERP, and also knowing that there were many CRM applications for SMEs, we wanted to do something different:
Create a CRM that is as powerful as it is useful and affordable for SMEs, but give it more packaging and functionalities, creating modules around it like billing. project planning or the incident system at the same time that we have implemented an integration policy with other tools used by SMEs such as VoIP calls, accounting, emailing tools, etc. that have taken shape in our Marketplace.
The objective was to create a scalable and modular tool, designed for the current needs of the SME, but also a tool capable of adapting to its growth or decrease in the past, without obligations and without paying for what is not used.
The result of this idea is a company that has gone from 3 to 150 employees in less than 5 years, present in more than 6 countries and with more than 6,000 clients. The result is having become one of the favorite CRMs for Spanish SMEs in just one year on the market. But this is just the beginning, because when a client asks us if ERP or CRM, we tell them: #WorkSmarter