Difference between ERP and CRM

Every digital company or sector needs a system to speed up the flow of information and manage the overall process with employees and consumers. The main objective was to design a software solution that integrates customer support with the organization's services. ERP and CRM are both business process management systems. The key distinction between these systems is that ERP systems do not directly engage with customers. In contrast, CRM systems demand direct communication with users. These systems' operations may be similar, but they operate in separate domains. The ERP has a large amount of organized data that may be easily handled. In contrast, CRM systems may store unstructured data.

In this article, you will learn about the difference between ERP and CRM. But before discussing the differences, you must know about ERP and CRM with their advantages and disadvantages.

What is ERP?

ERP is an abbreviation for "Enterprise Resource Planning". It is a software system that assists organizations in automating and managing fundamental business operations to achieve high performance. In other words, it is pre-packaged business management software that is utilized to enhance the enterprise's profitability, performance, and productivity. ERP software manages the data flow between a company's business processes, creating a single source of truth and expediting operations across the organization. It can integrate a company's financials, logistics, processes, commerce, reporting, production, and human resources functions onto a single platform.

Advantages and Disadvantages of the ERP

There are various advantages and disadvantages of ERP. Some advantages and disadvantages of the ERP are as follows:

Advantages

1. It is utilized to combine all of the services that are necessitate to run the business.
2. These applications are utilized to handle the resources of an organization.
3. These programs are web-based and may be accessible via any interface.
4. ERP software is responsible for tracking the organization's growth.
5. It reduces overall costs and risks while allowing for organizational growth.

Disadvantages

1. The ERP system installation is expensive. These are quite costly and are approximately 60% of the expenditure.
2. The ERP system's effectiveness may suffer if there is resistance to exchanging information between business divisions or departments.
3. Implementing a new ERP system is a difficult and time-consuming procedure that might take up to two years.
4. ERP software systems offer a wide range of functions, which can make the program complex and difficult to use.
5. The advantages of having this system do not become clear immediately after the software is installed. Instead, they become apparent after the system has been operational for some time.

What is CRM?

CRM is an abbreviation for "Customer Relationship Management". It is a technology that manages all of your company's interactions and relationships with consumers and potential clients. The main goal of CRM is to create customer service relationships, which will assist with sales growth and client retention. CRM includes gathering intelligence to give better services to customers. CRM systems gather client data from various points of communication between the customer and the organization, including the company's website, marketing materials, phone, direct mail, live chat, and social media networks. CRM systems may also provide detailed information on consumers' personal information, purchasing preferences, purchase history, and problems to customer-facing staff members. It is also considered as front office work.

Advantages and Disadvantages of the CRM

There are various advantages and disadvantages of CRM. Some advantages and disadvantages of CRM are as follows:

Advantages

1. It helps in enhancing sales performance.
2. Clients are served immediately, which increases customer and staff satisfaction.
3. It allows organizations to segment market audiences in an organized manner. It collects and provides all necessary information on potential clients, allowing them to be classified based on their interests and criteria.
4. It is used to consolidate all client services in one location.
5. It is primarily focused on the client.

Disadvantages

1. The cost of implementing a CRM system is too high for organizations. It is highly expensive because it comes in several price packages based on the requirements of organizations. It enhances the overall business expenses and may not be useful for small companies.
2. CRM data may be accessed and misused by other parties. There have been several articles and reports of web hosting organizations stealing and selling data to third parties. Various sensitive client data may fall into the wrong hands and cause people to suffer.
3. Another disadvantage of CRM is the insecurity of data acquired and retained. All of the gathered data is stored in a single centralized location, which is vulnerable to being lost or hacked by someone. Employees can include incorrect data and manipulate figures leading to wrongful planning.
4. It requires skilled and qualified employees to perform properly. It is very costly and time-consuming to provide CRM system training to employees. They must learn and gather knowledge of CRM software to understand it completely. All of this needs significant financial and time investments on the portion of the organization.
5. CRM has reduced the need for humans because it operates on a completely automated system. It automatically gathers and processes all data. A company's relationship with its clients may be properly managed via direct communication between users and its employee. Loss of human contact may encourage customers to shop elsewhere, lowering sales and revenue.

Key Differences between ERP and CRM

Here, you will learn about the key differences between ERP and CRM. Some of the main differences between ERP and CRM are as follows:

1. ERP is a software solution that assists organizations in managing their business processes. In contrast, CRM is software that automates customer connection with the organization.
2. ERP is mainly focused on arranging the organization's resources to ensure the greatest possible usage. In contrast, CRM is mainly focused on the management of the enterprise's customer relationships.
3. ERP is utilized in a large business organization. In contrast, CRM is utilized in small businesses with fewer divisions.
4. ERP is a centralized system that automates all processes. In contrast, CRM is a unified platform for converting customers into new clients.
5. The data migration in ERP is very complex because of the large amount of data. In contrast, CRM is quick and easy.
6. ERP is a web-based program. In contrast, CRM is a web-based system.
7. SAP is an example of an ERP system. In contrast, CRM examples include Microsoft Dynamics CRM and Salesforce.

Head-to-head comparison between ERP and CRM

Here, you will learn the head-to-head comparisons between ERP and CRM. The main differences between ERP and CRM are as follows:

Conclusion

ERP and CRM software systems are primarily utilized as integrated management systems for all of the company's departments and operations. The ERP software system mainly focuses on logistics and processes, distinguishing these software systems. In contrast, CRM handles sales and customer queries.