The Differences Between ERP and CRM Software Explained

ERP and CRM. Two initialisms, but what distinguishes them? In our experience, a lot of people misunderstand these two business management systems, and risk missing out on their unique benefits and functions as a result.

With a view to steer you towards the right solution for your business, we’re taking a closer look at the key differences between ERP and CRM systems – from their uses and benefits, to the essential considerations you should bear in mind when it comes time to deciding between them.

Use the links below to find the information you need fast, or read on below for our full guide to ERP and CRM software.

Quick Links

• What is an ERP System?
• What is a CRM System?
• What Are the Main Differences Between ERP and CRM Systems?
• Should I Invest in ERP or CRM Software?

What is an ERP System?

An enterprise resource planning (ERP) system streamlines business operations, providing standardised management across all business functions and processes. It’s designed to interconnect applications and data from every department, so you can monitor issues, track activity, and manage workflows in real-time.

What Can You Use an ERP System For?

Why might you need an ERP system? With modular integration, the software allows you to leverage management applications across a range of day-to-day processes, improving efficiency and freeing up resource.

Typically, modular ERP features are used to support the following business functions:

• Track and oversee manufacturing and supply chains
• Monitor issues across all business departments, workflows and functions
• Store and manage employee information, including payroll and benefits
• Develop business-wide strategies
• Manage administrative tasks, like order processing and account information

 

What Are the Benefits of ERP Systems?

ERP software offers a range of benefits to businesses in all sectors, including:

• Standardised workflows – with a singular workflow interface across all departments, ERP facilitates enhanced collaboration, improved inter-departmental communication, and centralised help, support and HR functionality.
• Improved reporting ­– with complete transparency over workflows and processes, ERP provides enhanced reporting capabilities – giving you granular-level insights on which to implement change.
• Enhanced supply chain management – helping you manage your supply chain in a real-time setting, ERP systems allow for streamlined processes which bolster efficiency and support cost-saving initiatives.
• Software spend control – with one system for managing all business workflows and processes, an ERP eliminates unnecessary software expenditure – helping to streamline and cost-save your IT resource.
• Flexible modules for complete control – ERP systems feature customisable modules designed to meet your business requirements, for total control and scalability.

What is a CRM System?

Customer relationship management (CRM) software records interactions with your customers, providing a standardised system for tracking, monitoring and leveraging customer information. It’s designed to help you organise and share customer data across all departments, so it can be used to support other business functions, like sales and marketing.

What Can You Use a CRM System For?

From gleaning behavioural insights to supporting full-scale marketing campaigns, the data collated by CRM software can be used in a variety of ways to support the functions of your business.

Here are some of the common business functions which can be augmented with the use of a CRM system:

• Leverage customer behaviour to identify new leads
• Provide enhanced customer support
• Manage targeted marketing campaigns
• Glean insights from purchasing trends
• Update and enhance your sales processes

 

What Are the Benefits of CRM Systems?

Adopting CRM software can bring a range of benefits, including:

• A better understanding of your customers – one of the key attributes of CRM software is the deep insights you can discover about your customers – insights which can be used to make improvements across the business.
• Segmentation – the data and functions offered by an integrated CRM system allow for full customer segmentation, allowing you to customise and target your marketing efforts for improved ROI.
• Customer retention – discovering your customers likes, dislikes, habits and behaviour means you can deliver a better experience, which can help you retain them for longer.
• Enhanced communication – from email templates to marketing newsletters, you can use your CRM system to augment the conversations you have with your customers – improving retention rates and driving sales.
• Safe data storage – CRM software offers enhanced customer data protection, safeguarding both their privacy and your data management credentials. Inbuilt GDPR-related functionality is now seen as a must for any CRM system.

What Are the Main Differences Between ERP and CRM Systems?

Now that we’ve looked at ERP and CRM systems in detail, you should have a general idea of how they differ. But, for the sake of clarity, here are the main differences between ERP and CRM you need to know:

• ERP software is designed to streamline all business operations; CRM is focused purely on sales and marketing functions.
• While ERP systems do feature some CRM functionality, dedicated CRM software offers more extensive customer discovery.
• CRM can’t be used to manage different workflows beyond sales and marketing functions; for this, you’ll need ERP.

So, to conclude, the biggest difference between CRM and ERP software is scope and functionality. An ERP is more of a one-size-fits-all solution which can help make light work of managing and streamlining multiple business functions; CRM is a more tailored system that is exclusively used for customer discovery.

 

Should I Invest in ERP or CRM Software?

This all depends on your requirements, and your overall business strategy. If it’s a matter of ERP or CRM, as opposed to both systems, consider the following when weighing up which to opt for:

• Are you looking for a multi-channel system to streamline many different workflows?
• Do you need to manage multiple areas of your business, from supply chain to HR?
• Are you looking for in-depth discovery of customer behaviour to support marketing and sales?
• Will you need to scale your operational software in the future, to cover other departments, workflows and processes?
• Do you want optional modulation to enhance and streamline different areas of your business at any one time?

By carefully weighing up your requirements and desired functionality, only then will you be in a position to select either ERP or CRM software as the right investment for your business.

Have you enjoyed this article? Be sure to visit the JS3 Global blog for more expert help and advice in getting the most from ERP software. For impartial help and advice in selecting the appropriate ERP solution for your business, our experienced team are here to help. With years of combined experience in helping organisations leverage the power of ERP technology, our expert team can partner you with the appropriate solution for your needs. For more information, visit the homepage or call us on +44(0)161 503 0866.