ERP, CRM, enterprise resource planning, customer relationship management, ERP vs CRM

Manufacturers and suppliers today are challenged constantly to become more accurate, efficient, and profitable to survive the constant change and disruption in the world around them. While spreadsheets and manually tracked processes can help organize internal processes in the early days of any business, manufacturers and suppliers often turn to enterprise software like ERP or CRM to help scale their business.

But when do you need ERP and CRM? This article will help identify the differences between ERP and CRM, when your business may need them, the benefits of each system, and if your business may benefit from having one or both systems.

What is ERP?

ERP stands for Enterprise Resource Planning. The term refers to software systems used to plan and manage an organization’s processes, including those related to core supply chain management, manufacturing, services and finances. Businesses can opt to use ERP SaaS (Software as a Service) applications to address individual processes, or enlist an entire system, which includes a complete suite of ERP applications that communicate across one another to help businesses more effectively manage their operations. 

An ERP system covers all operational needs, commonly providing:

  • Integration with other native systems
  • A common database
  • Real-time operation
  • Support for applications and components
  • A common user interface across all applications
  • On-premise, cloud-hosted or SaaS deployment

ERP systems are offered in many options but there are two common varieties: Enterprise ERP and Small Business ERP. The variance is meant to better address the needs of a large business versus a small or medium-sized business. It’s important for organizations to select the ERP system that will eliminate the need for costly customizations, adapt to the rapid pace of business change, address future technologies and meet other identified requirements.

A variety of industries can benefit from manufacturing ERP software, including:

Common functional areas for organizations are grouped into ERP modules. Standard modules include:

  • Customer and Service Management
  • Manufacturing
  • Quality Management
  • Asset Management
  • Financials
  • Supply Chain Management
  • Global Trade & Transportation Execution
  • Analytics and Reporting

What are the Benefits of ERP?

ERP software simplifies and automates common business activities. An ERP software system allows for better performance and project management that helps plan, budget, predict and accurately report on an organization’s financial health and processes. ERP systems also enable businesses to connect and streamline every aspect of their enterprise.

An ERP system, which includes a complete suite of applications, gives businesses the advantage of cross-application communication. Because applications are able to “talk to” one another via common databases, data can be shared to give businesses an accurate big-picture view of how their operations are performing. ERP software provides users with detailed reports on performance and how resources are being spent, allowing for more informed, strategic decision-making.

Further business values of ERP systems include:

  • Cost savings due to automation and integration that leads to increased efficiency and productivity
  • Better management and monitoring of compliance with regulatory standards
  • A reduction in human errors and improperly spent time and resources
  • Enhanced communication and collaboration between roles and departments
  • Scalable business growth
  • Improved partner and supplier management

What is CRM?

A CRM (Customer Relationship Management) system is a tool that helps businesses improve their relationships with current and potential customers, service users, colleagues and suppliers. This technology is fast-growing and critical to the success of businesses moving forward. CRM software helps businesses better manage contacts, sales, agent productivity and more. Today, CRM software can be used to manage a business’s customer relationships throughout the entire customer lifecycle, from marketing to sales to digital commerce and customer service. 

CRM tools are helpful for a variety of departments within a company, including recruiting, marketing, sales, business development and customer service. This technology helps prevent blanketed treatment of contacts or customer outreach from falling through the cracks. By using CRM software, businesses can organize customer and prospect information to build stronger, more personalized relationships with them and better organize their interactions during the consideration process. This improves customer and prospect satisfaction and helps the business grow. 

Generally, CRM software collects customers’ relevant contact information, including telephone numbers, email, websites and social media data. It can store details about each contact, such as communication preferences, helping businesses not cross a contact’s outreach boundaries. In addition to what these tools can store, they also log customer interactions to better monitor the relationship. 

What are the Benefits of CRM?

As with ERP, there are many valuable business benefits of CRM. Primarily, it enables your business to become more customer-focused, which in turn enables you to be more profitable. CRM technology gives you a clear, bird’s eye view of your customers while also helping you drill down into their individual preferences, needs, requests, issues, dislikes, how they’re responding to marketing campaigns, what they’ve purchased and more — all in one easy-to-navigate database. With this information stored under a unified dashboard, all users across your company can participate and stay informed. Not only does this optimize functions for the business, it also provides a more personalized and consistent experience for the customer.

Ultimately, enlisting a CRM system cuts unnecessary costs while increasing profits. Customer information funnels into a business through a variety of different sources, including sales phone calls, marketing forms, emails, social media networks, customer support calls, website chats and external sales meetings. Without a system to house and make sense of all that information about your customers as a whole and individually, you risk providing your customers an inconsistent, even poor experience with your company. The result can be the loss of business. 

For sales and marketing departments, CRM tools allow users to have a better understanding of incoming prospects and optimize marketing campaigns using clear data. CRM systems provide advantages for customer support roles as well. Because customer interactions can happen across a variety of channels, a unified CRM system pulls all of a customer’s questions, feedback, complaints, requests, and more together to help customer support representatives provide help that is better customized to the customer and takes into account a more holistic view of the relationship between the customer and the business.

For businesses of all sizes, this level of visibility provides valuable business-enhancing insight. For small businesses in particular, having CRM software can fill roles that would normally require hiring additional team members, which is beneficial for smaller companies that need to conserve resources.

What’s the Difference Between ERP and CRM?

The primary difference between ERP vs. CRM is that, essentially, one organizes processes and one organizes people. The table below identifies what each system is designed to manage and help businesses improve upon.

ERP vs CRM

ERP Software

  • Project Planning
  • Standardized Business Procedures
  • Data Reporting and Accuracy
  • Task Automation
  • Supply Chain Management
  • Accounting
  • Human Resources
  • Manufacturing
  • Order Processing
  • Production Management
  • Warehouse & Inventory Management

CRM Software

  • Marketing Campaigns
  • Sales Processes and Pipelines
  • Lead Prioritization
  • Customer Data Collection and Reporting
  • Internal Collaboration
  • Customer Support
  • Loyalty Management

What are the Similarities Between ERP and CRM Systems?

The differences between ERP and CRM tools are easy to spot, but there are many similarities as well. Though different in their primary focuses, both system types provide businesses with:

  • Operational efficiency
  • Business growth and increased profitability
  • Better use of resources
  • Increased reporting
  • More informed decision-making
  • Improved internal and external communication and collaboration
  • Work-from-anywhere capabilities when using cloud-based systems

How Do I Decide if I Need an ERP or a CRM?

Inefficiency, customer dissatisfaction, and loss of profitability are all basic indicators that a business can benefit from an ERP and/or CRM system. 

To decide if your business could benefit from an ERP system, consider if:

  • You’re seeing throttling/bottlenecking in your operations
  • Company growth is inhibited
  • Security and risk mitigation are vulnerable
  • You experience disorganization and too many programs/spreadsheets
  • Data management requires manual entry and monitoring
  • Current systems have poor scalability
  • IT time is spent fixing legacy systems
  • Current programs don’t support where your business is headed
  • Resources, including employees, are improperly managed and spent

To decide if your business could benefit from a CRM system, consider if:

  • You don’t have all customer information and interactions stored in one place
  • Departments are forgetting to follow up with prospects
  • Multiple people within your company are interacting with prospects and customers
  • Customers complain that requests aren’t being filled or they’re receiving repeat calls
  • You have a growing B2B company
  • You’re making best-guess business decisions
  • You lose pipeline when sales employees leave the company
  • You have a multi-point sales cycle
  • You’re running marketing campaigns without the proper staff or resources

If your business is experiencing these issues or falls into these categories and you’re seeing a dent in sales and support, it may be time to consider an ERP or CRM system.

How Integrated Should an ERP or CRM Be?

If your business is facing issues under both lists above, enlisting the help of both an ERP and CRM system can prove highly valuable, and integrating these systems within one database can be even more beneficial. Integrating ERP and CRM software into one larger system may seem intimidating, but it’s actually much easier to manage than two separate systems. Essentially, you’re combining frontend and backend operations for a more unified, 360° view of your business.

For starters, when these systems are integrated, any automatic updates are made to both systems at the same time. Having these systems be in sync is helpful when changes occur within operations or different requirements are added.

Business data also improves when these systems can “talk” to one another. Data will always be up to date, and you’ll be able to have a more well-rounded data story and reporting capabilities. The need to have someone manually enter data between systems is removed as well, allowing employees to better manage their time and reducing the opportunity for human error. 

For sales teams, forecasting product demand becomes a lot easier when both systems work in tandem. With order history data in hand from the ERP side and customer tracking data from the CRM side, sales departments are better qualified to make sales. Then, when sales members enter orders into the CRM tool, it’s automatically transferred to the ERP, further eliminating manual entry and speeding up processing times. 

With higher visibility across operations, all roles are able to better collaborate to support processes, pipelines and profits. Integrating systems provides all-around enhanced speed, clarity, automation, and better use of resources for a seamless workflow that benefits all involved, as well as your bottom line.

How to Select an ERP or CRM System

When evaluating software or a vendor, consider the following after reviewing system features and benefits:

  • Does this software meet our system requirements?
  • Does it align with our company goals?
  • Is it compatible with existing systems?
  • What are the training and support options?
  • What are other customers saying about this software/vendor?
  • Is this vendor committed to innovation and evolving with business technology trends?

These questions, along with any others appropriate to your business, can help distinguish if an ERP or CRM system will be a good fit for your company’s needs.

5 COMMENTS

  1. Greetings, Usually I never comment on blogs but your article is so convincing that I never stop myself to say something about it. You’re doing a great job, Keep it up 🙂

  2. Great Article Caleb! Personally I think, in business we are always taught the importance of CRM and how the cost of acquiring a new customer is 5 times that of influencing an existing customer to purchase. Your article has given me a proper insight. Thank you.

  3. Good thing I have read this kind of article. It was very helpful, including your graphic research, it makes me understand it better. Thanks for sharing!

  4. It is an amazing article as you have shared the important aspects of the ERP and CRM, as both the tools are an important elements to make your business more efficient and effective to the clients. With the help of CRM & ERP tools your business will be in full control over your customers and resources.

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