ERP and CRM are two business applications that can help us achieve the goal of increasing the overall profitability of a business.
- Although they are somewhat similar solutions, there are also differences, both in their purpose and objectives.
- In this post with updated content we tell you how incorporating a CRM and an ERP in your company can change your daily life.
It is true that, over time, business management programs They become more diverse and functional, which can lead to some of the specific tasks for which they were designed overlapping. However, it is important to keep in mind that both an ERP and a CRM are business management solutions with specific objectives and that they are effective when used in the tasks for which they were created.
Definition of ERP software and CRM software
But what does each software consist of?
ERP: When we talk about ERP we are referring to a solution that integrates and manages various areas of a company (such as finances, human resources, inventories, etc.). And all to improve efficiency and optimize the internal processes of a business.
CRM: Meanwhile, a CRM is a tool that focuses on customer relationship management. Thus, it allows you to collect, organize and analyze information to improve your satisfaction (in addition to boosting sales and offering personalized attention).
Let’s draw a parallel to understand it better.
Can I edit a photo with a presentation program or a text editor?
- Yes, with certain limitations, but I can modify it.
- However, for a professional finish I will have to use a specific photo editing tool.
Exactly the same thing happens with these business applications. Can I manage my clients’ contacts with both? Partly yes, but to extract all the value I will have to use a CRM.
Therefore, the ideal is for companies to have each of these systems to carry out better management of each of the processes. The approach used by these tools is different and this is how they manage to maximize business efficiency and profitability.
In this post we tell you what the differences are between ERP software and CRM.
What is the purpose of a CRM and an ERP in a company?
What are each of them for?
Broadly speaking, we can summarize an ERP as the expense manager to optimize all these costs. Meanwhile, CRM allows you to generate more sales and, therefore, increase income.
Regardless of the fact that the first will be developed before the second, the latter is mainly used to carry out activities of front office, while the other is used to carry out activities of back office.
To fully understand how both programs differ, below we have some practical cases:
- Retail store: For example, a store can implement a CRM system to manage the relationship with its customers. Through this tool, you collect information about your customers’ purchasing preferences, purchase histories, etc. So, when a customer visits the store or makes a purchase online, the sales team can access that data to offer product recommendations and personalized offers.
- Manufacturing company: Meanwhile, a company dedicated to manufacturing can have ERP software to manage its internal processes. In this tool you can integrate inventory management with production planning and logistics. For example, when you receive an order from a customer, the ERP automatically identifies supplies in inventory and plans production accordingly.
Below we will see in detail the main differences.
CRM vs ERP: Main differences
Both systems improve efficiency in business processes. But while ERP focuses on reducing costs by making business processes more efficient, CRM seeks to increase sales.
To understand well what differentiates them, we can establish some large blocks.
- Program objective
- The objective of both is completely different. While one controls business resources and offers economical management of them, CRM is focused on customers and everything around them, to improve and optimize the sales process.
- This implies that the former is a solution that practically all departments of a company can access and use, while the CRM is more designed for sales and marketing departments.
- Implementation
- As explained above, the implementation of a business management system is usually a higher priority and initial than that of a CRM. And, therefore, more complex and expensive, both in time and in customization and implementation.
- While all employees should know and become familiar with ERP, only a few will need to do the same with CRM. The learning achieved with the first also facilitates the arrival of the second.
- Target company
- The larger a company is, the more complex its management tends to be. For many SMEs, a complete accounting solution may be enough to manage their daily lives. But as long as there is a lot of stock, input and output of materials, as well as a manufacturing process, implementing an ERP may be ideal.
- The same if, in addition, we have both physical sales and through different online channels. The more unified the information is, the more competitive we will be.
- Meanwhile, CRM, having a simpler implementation and learning period, can be a very good option for almost any type of company. Furthermore, we must not forget that its main objective is to create a greater sales volume, in addition to improving the relationship with customers.
- Managed data
- An ERP manages internal company data, such as financial records and inventory data. In addition to purchases and suppliers as well as production planning.
- Meanwhile, in a CRM, the data that is managed is from the clients. From purchase history, sales and marketing activities, or everything related to customer service.
- Impact on business
- There are many benefits of using ERP software in a business, but the improvement in internal management, decision making and productivity in general stands out.
- For its part, with a CRM tool, a company will be able to increase customer retention, boost its sales and improve the loyalty of current customers.
The importance of CRM and ERP in the daily management of companies
The integration of an ERP and a CRM has clear benefits for companies, as some studies have shown.
The change is almost instantaneous, as these types of tools allow companies to build and deliver with critical capacity and based on data, not assumptions.
The day-to-day life of companies sees their business efficiency improved, making information between departments communicate and share more fluidly. Additionally, this also opens the door for all employees to have a better understanding of how the rest of the departments work and, by extension, the company as a whole.
Like almost all applications, an ERP and a CRM also save time and reduce errors, since they allow many tasks to be automated and avoid duplication. Something that also facilitates instant access to data and information to make better operational decisions.
Thus, both programs are tools that allow us to better manage our business, but each of them with a different and defined purpose. The first is for a more global management of the company, focused on cost control, while the second is specific to the relationship with customers and, therefore, will help us increase income.
The correct combination of both will allow us to maximize the benefit.