ERP vs CRM: The suitable business applications can help your company improve customer service, sales, and marketing.
This results in having a competitive advantage because you can do more than your competition.
An ERP is an enterprise resource planning system. It’s an all-encompassing business management software package that handles everything from accounting to inventory management.
CRM stands for customer relationship management. It focuses on managing relationships with customers, and it has strong ties to sales and marketing departments.
In this post, we cover ERP vs CRM so read the article till the end.
Table of Contents
What is ERP?
ERP (Enterprise Resource Planning) is an acronym for Enterprise Resource Planning.
They are a set of applications that manage, manage, and maintain all your customer and inventory information.
In short, it provides the customer with a view into the company.
It can include budgets, orders, purchasing, inventory, or anything that your business manages. Businesses that implement ERP also focus on compliance.
It’s a great way to show your customers what you are doing to keep them happy, safe, and secure. Not all ERP solutions are created equal, however.
Some ERP systems charge a hefty fee just for the software. What’s more, no system is 100% secure, not even with the best IT security products.
What is CRM?
CRM is the process of collecting data about your customers, which then makes it easier to connect with them and more cost-effective than other tactics.
For example, a company that utilizes CRM to the fullest will quickly and accurately identify opportunities and threats.
In return, this will help you plan your business to save money, boost profits, and be as efficient as possible. This way, the company can accomplish the goals it set out for itself.
When CRM is used effectively, you can save resources and ensure the best possible products reach your customers.
On the other hand, ERP is the result of processes and tools used to automate business operations. This allows you to save time, money and decrease stress in your business.
Why should I choose ERP?
Companies use ERP platforms that can provide a central location for information to help an organization perform better.
Use the “big data” for better analysis of the customer’s buying behavior.
Here are some of the top benefits of choosing an ERP platform:
A system that’s always up to date. Real-time alerts based on high volume and a “predictive” view of actions within the company.
Because of real-time alerts, companies can be proactive in the activity of their customers.
So much more data and insights into the individual’s habits. Users are provided with access to easy-to-use applications so that they can find answers to their questions.
All of this information is stored on the enterprise resource planning software.
Why should I choose CRM?
Because your customers are the ones who make your business successful, it is essential to have customer data to deliver a high-quality customer experience.
CRM is a great way to keep customer data. You get to access it every time they visit your website.
However, there are some significant benefits to choosing ERP.
The first one is that your CRM is much easier to use.
The second one is that you can access your CRM anywhere you want, so it is easy for you to keep track of all your orders and CRM data.
The third reason is that the first CRM system is so expensive, and it may not be profitable for you to buy it. You can get ERP on the cheap.
ERP VS CRM: Advantages And Disadvantages
Advantages of ERP
1. Improved Business Reporting
ERP systems allow you to implement the business and financial reporting that is required of any large company.
It will help to give you real-time insights that you would never be able to get from Excel and Google Sheets.
Better Productivity ERP allows you to be more productive and efficient.
It means you can create sales schedules faster, process orders faster, and implement cost savings in your company more quickly.
You can easily keep track of sales data, current inventory, and, most of all, sales taxes.
Reduced Overhead ERP systems are a lot less expensive to run than Microsoft Excel and Google Sheets.
It makes it easier for your team to focus on the business issues and tasks to keep your business on track.
2. Improved Efficiency
With an ERP system, you will find that you can save time because you don’t have to make tedious decisions about the types of software you will use.
Your business will be more efficient because you will have more software to automate repetitive tasks.
You won’t have to worry about inventory. To make this happen, you will need a flexible system to accommodate the most commonly used applications.
It will be a platform that will enable you to create your custom applications, and you can go with the one you like.
It means that you can do things like give customer reviews of your products.
Safe Product With a business application like ERP, you will be safer to ensure that the inventory in your warehouse is accurate.
3. Better customer service
Today’s customer is more interested in how you treat them.
By having a system in place that gives you the ability to understand their buying preferences, you are in a better position to develop a specific customer service strategy.
More efficient operations By having a comprehensive system in place, your entire business will become more efficient.
It will make it easier for you to spend your time doing what you love rather than trying to juggle several business systems at the same time.
The ability to share information with more than one company ERP system is versatile.
You can connect your employees’ computers, so they have access to the same information. It can enable an entire company to share information while keeping the data safe.
4. Scalability
One of the most significant advantages of an ERP is the scale it can offer.
The advantage of scaling up to many systems and applications is that all the systems have to be designed and developed in a certain way.
One has to be aware of all the users the system is expected to work with. It requires data structures and data flow rules.
Many companies take this shortcut of putting in place a business application, then not putting all the systems in place.
There are hundreds of requirements on the system, and the programming has to be done individually for each application.
5. Supply Chain Management
An ERP system is a great tool to track sales, inventory, suppliers, and employees, which means you can have clear and organized information on serving your customers.
When your ERP system is installed, it will take about three days to set up the system.
As soon as you log into the system, you can generate data right away and see how you are doing.
It will take your small business some time to train the employees on how to use the system. Supply Chain Management By entering ERP, you can get reliable and consistent data.
It means that you can more efficiently manage the production process, quality control, and identify the causes of delay, among many other benefits.
Disadvantages of ERP
1. ERP is Costly
ERP has traditionally been expensive. It is no longer the case.
An open-source model has come on the scene. But, it does require you to spend thousands to get it right.
2. Cost of Implementation and Maintenance
The cost of implementation and maintenance for ERP is slightly higher than non-ERP systems.
You pay more money, and therefore, it can put more pressure on your profit margin.
3. Customization Process
If you have your preferences regarding how you want to do things, then ERP can help you out.
You can customize how it operates on your side. You can switch features, elements, or customization if it is needed.
But there will be times that you will need to switch back to your data.
In these cases, you have to go back to the manual ways. But there is a solution to that.
It is possible to copy the data you need for your customers to switch back. It is an automation process and is a challenge for most companies.
Sourcing Because of all the complexity, it can take longer to get the support you need for an ERP migration.
If your ERP is from the same provider you are used to, it will take longer to get to the results.
4. Requires training and practice
Since you will be implementing an ERP solution, you will require some training before gaining total value.
Since you will be responsible for all the functionalities, you must fulfil within your company, you will need to go through the training.
It means that you will have to keep track of the time you are wasting as well.
So if you don’t have a dedicated employee to manage this for you, this will seriously reduce the amount of time you can invest in growing your company.
5. Needs updating and maintenance
The most important thing to remember about ERP is that the solutions must be regularly updated and maintained.
When your organization is in a growth phase, you will add new products and features.
6. Complex Data Conversion
Data conversion is a crucial factor in implementing an ERP system.
The process of converting data to a form that is recognized by the software is an essential step.
When there is complex data conversion, it may slow down many activities.
Advantages of CRM
1. Better customer retention
Marketing and sales can help you improve customer retention. The best way to improve customer retention is to do more personalized marketing and sales.
If you do this, you will be able to increase customer retention. In addition, you will be able to increase sales.
2. Innovative customer service
You should make use of intelligent software for customer service. The software will improve your customer service.
One of the main reasons why you need customer retention is customer service.
Top-notch customer service will be able to win your business. Increased product innovation If your software is smart enough, it will help you to make product innovation.
In addition, it will be able to give you an edge in the market.
3. Enhances customer loyalty
When you take customer service to the next level by implementing one of the above customer relationship management (CRM) applications, you get the chance to provide an excellent customer experience.
This way, you can generate more loyalty to your brand. For example, a company named RoyPorter offers a single platform for their customers that helps them communicate and control all aspects of the service they receive.
This enables them to take full advantage of the CRM application and make it work for them.
Increase sales Having a single source of customer data makes it possible to manage your sales on a single platform.
When you have a centralized CRM data source, you have the chance to work with data across every customer touchpoint.
4. Communicate and Collaborate Across Teams
A CRM will help you: Communicate more efficiently with colleagues, create a more collaborative working environment, Link across systems and tools.
Also, Collaborate with partners and customers, Allow clients to make requests Provide a more unified view of all customer information.
Do Not Require a Chief Sales Officer If you need to have a CRM for managing sales teams, then get a system tailored to your needs.
A CRM should be structured and flexible to allow all people to work from the same place.
A CRM shouldn’t just take up too much of the time of someone already running a large sales force.
The right CRM could act as a trigger for productivity and engagement.
5. Increase Revenue
As a business owner, it’s crucial to understand CRM’s psychological impact on your business.
With your CRM system, you can learn which customers are ready to make a purchase.
And they can also be given special discounts on a specific event. Boost Your Sales When you have a sound CRM system, you can grow your business.
For example, you can determine the optimal time to reach out to a customer by having a sound system.
The best time to have a customer is right when they want to purchase something.
6. Improve Your Marketing Strategy
Analyze your customers’ buying habits and identify the best channels for your business to reach them.
The right tools can help you monitor email, social media, and web traffic. You can then identify the best channels and alter your email, social media, and web advertising strategy to make it the best it can be.
These strategies will also help increase customer loyalty and retention. It is essential to identify which channels to use and target your customers with the right message.
Track Your Business Costs To save money on business expenses. You should keep track of your business expenses.
By doing so, you will be able to track your spending and stay under budget. It will save you money and boost your profits.
Disadvantages of CRM
1. CRM is costly
Although it is getting easier and cheaper to set up CRM systems, it is also getting more expensive.
It may start as a pricey technology, but it is easy to see that it can also be costly over time.
People will always compete, so keeping track of all your customer details is very important.
It is not only the cost, but the maintenance and the worry of losing your customers to another company can be challenging.
Please don’t get in your way Consumers have always been able to shop around for their products, which usually has led to good sales, and provided you are offering excellent customer service.
If a customer is in a difficult situation, chances are they will consider buying from someone else.
2. Poor communication
As a business owner, you need to constantly be communicating with your team members to keep them updated on the progress.
If you make a change and forget to notify your team members about it, you will lose trust.
The lack of updates can cause a lack of motivation, leading to a failure in the overall business.
Insufficient customer data A data-driven approach to marketing and customer support is needed.
Companies need to know who their customers are and what they want.
CRM software can provide the correct information that can help you to achieve this.
Weak accountability Your company is your baby, and you need to be held accountable to your standards.
3. Lack of Leadership
According to KPMG and KRC Research, 54% of sales professionals struggle to improve marketing and sales activities.
They don’t have the right CRM tools, strategy, and solution set that’s helpful for their operations.
You might ask what the leading causes of this problem are. It all boils down to leadership and lack of discipline.
It shows that a lack of leadership can stop your entire sales and marketing operations.
When salespeople can’t track how many contacts are in the pipeline, how many leads they have on file, or how many conversations have gone wrong, they can’t do anything about it.
Instead, they spend their time handling small details that are not related to business growth.
4. Security Issues
Let’s face it; customers are becoming increasingly more tech-savvy these days. And cyber security is becoming one of the biggest concerns when it comes to working with CRM.
With more and more applications popping up on the market, it becomes harder to stay current with each application and security requirement.
It becomes even more problematic when you need to integrate multiple applications into your CRM system.
Difficulty in Analytics As a CRM professional, you may or may not be aware that analytics is still one of the most critical aspects of the CRM equation.
With the number of customer data points increasing, more opportunities to capture customer behavior and understand it.
5. Third-Party Access
Not everyone on your team uses Salesforce or Workday. So you have to provide access for them to get the work done.
The problem is, not everyone has the right skills to use these applications.
You have to balance the use of CRM with your employees’ skill sets.
Not Free Workday and Salesforce are the main competitors in the CRM market.
Which is better, CRM or ERP?
The answer, like many such questions, depends on the person asking.
The CRM vs ERP debate will be decided on both sides of the fence. On the one hand, CRM software provides an excellent, neat solution.
An ERP, on the other hand, can become complex, overwhelming, and a complete nightmare.
Yes, an ERP package can grow to be gigantic. It’s typically used to support a variety of businesses, from restaurants to legal firms.
An ERP is meant to streamline processes and keep the wheels on the company moving productively.
The CRM system does a great job of working for sales but is too focused on managing relationships with customers.
ERP vs CRM are helpful, but that’s the beauty of the CRM vs ERP debate.
ERP VS CRM: FAQ
Is CRM part of an ERP?
No. The two technologies are distinct, and there is no need to pair them.
CRM functions best within a standalone system, making it ideal for companies that don’t use CRM-specific components from other products.
Why Is CRM So Popular?
Because it can address many everyday customer needs, including Customers, need to know where to find information.
They need to know how to reach the contact to respond and how long it will take to receive support.
They need to know when to contact support, how often to expect a response, how to get help, and how frequently they should respond.
Is Salesforce an ERP or CRM?
Depending on whom you ask, either of these terms makes sense. The truth is, it depends on how you define those terms.
With Salesforce, your sales team uses CRM software to monitor customer accounts, prospects and leads and manage sales processes.
This system helps your team to track leads, send emails to prospects, and close sales.
An ERP’s primary purpose is to store and analyze critical information in a shared database.
An ERP typically requires a lot of upfront work and customization from your IT department, but it saves you time and money in the long run.
ERP systems integrate with other parts of your company and can help you optimize operations and increase profits.
Is SAP an ERP or CRM?
SAP is a CRM tool that was initially developed for manufacturing and logistics.
Its rapid growth as an ERP system led to it being called the “CRM” of the ERP world.
Over the years, both the ERP and CRM fields have experienced rapid growth.
If we are to believe Gartner’s magic quadrant, both sectors had a massive surge, with SAP being the only product in Gartner’s top ten worldwide ERP leaders to achieve its spot since its first quadrant.
One of the main reasons for this growth is the changing preferences of both CMOS and CIOs.
What is the ERP life cycle?
An ERP cycle encompasses all of the project’s implementation, execution, and ongoing management.
It begins as soon as a business decides to buy an ERP system. Assess your business needs and goals.
How does ERP help in CRM?
ERP offers the CRM functionalities you may already have in mind.
From booking to shipping, eCommerce to accounting, this suite of tools can handle every aspect of your business on the back-end.
It can also track and manage various company parts, like customer details, products, and inventory.
Although CRM doesn’t involve all of the same functions as ERP, it does help the process in a few ways.
It’s easy to maintain relationships with customers. It can be hard to remember who your customers are, their family members are, and even which children need diapers the most.
CRM can help you with this. CRM also makes it easier for your team to get in touch with customers, schedule appointments, and share shipping information with your team.
ERP VS CRM: Conclusion
CRM vs ERP: Both are used to manage various aspects of a business.
ERP helps companies manage inventory, field service, HR, etc. But it’s worth noting that CRM and ERP are two very different things.
CRM involves the systems and processes required to handle customer relationships.
ERP deals with the business processes of the company. Suppose you need help deciding which one is the right solution for your business.
In that case, it’s worth giving a simple A/B comparison to understand their differences better.
When you compare the two software systems using a CRM vs ERP comparison, you’ll learn more about what CRM and ERP do.
That way, you can compare the two business software (CRM vs ERP) packages based on their capabilities.
