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Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) are two sides of the same profitability coin. ERP and CRM are similar in many ways, as they are both used to increase the overall profitability of a business.
These systems overlap in some areas, and can be completely integrated in others. However, as their core functionalities are completely different, it’s best for a business to first look at them as separate, stand-alone systems. When viewed separately, it’s easier to see how ERP and CRM each play a role in improving efficiency and increasing sales.
Difference
Though similar in effect, ERP and CRM systems use different approaches to increase profits. ERP focuses on reducing overhead and cutting costs. By making business processes more efficient, ERP reduces the amount of capital spent on those processes. CRM works to increase profits by producing greater sales volume. With a standardized repository of customer data, it’s easier for everyone, from executives to sales reps, to improve customer relations. In turn, those improved relations translate into increased brand loyalty and profits.
Deciding which system is more important is like deciding between having an engine or having a steering wheel in a car. CRM is the engine that drives a business. It improves sales and increases profits. ERP is the steering wheel—it allows a business to be guided with precision, and to steer around obstacles well in advance. ERP and CRM working together make it much easier for a business to increase profits while reducing costs.
Increased capital comes about in two ways: more sales or fewer expenses. Using ERP and CRM systems allows a business to pursue both of these avenues. The CRM system brings in more revenue through better sales figures, while the ERP system reduces overall operating expenses. Together, these systems can help a business pursue growth through efficiency and expansion simultaneously. Used separately, ERP and CRM can still be very helpful, but could potentially limit the business to a narrower avenue of growth.
CRM and ERP are often used together, though have different purposes. CRM combines Marketing, Sales, Contact Management, and Customer Support. ERP stands for Enterprise Resource Planning. ERP systems help standardize and streamline numerous business processes across manufacturing, procurement, services, sales, finance, HR management, etc. ERP software is mostly used by larger, established companies.
Although some CRM solutions are used as separate applications, they can be integrated with ERP, wherein data can be shared between the ERP and CRM systems.
ERP & CRM are two sides of a same coin
I afully agree with you Mr Ibrahim Hussein Mayale . you just got the best answer .thanks
ERP platforms are exceptional tools. However, they are rarely integrated with customer relationship management platforms (CRM).
"Enterprise Resource Planning" (ERP) is the term the industry uses to describe a wide range of activities supported by a modular software helping manufacturers and other companies to manage large areas of their activities. These areas may include planning, parts purchasing, inventory control, supplier relationships and track orders. An ERP may also include application modules for finance and human resources aspects of a business.
So it is certainly better to have in one integrated solution, as opposed to two different systems that may not always be connected or synchronised.
What Exactly is CRM?
CRM is an abbreviation for customer relationship management and is a phrase used to describe all aspects of interaction that a company has with its customer, whether it is sales or service-related. It's a business strategy that helps your business to better understand your customer, retain customers, provide excellent customer service, win new clients and increase profitably.
Many aspects of CRM relies heavily on technology. CRM software will collect, manage and link information about the customer. You can use CRM software to create marketing campaigns, view a customer's entire of history of interactions with your business and use it to streamline daily business and sales tasks.
What is ERP?
ERP is an abbreviation for enterprise resource planning. ERP software is used to manage the business. It integrates all facets of an operation, including product planning, development, manufacturing processes, human resources, financials and sales and marketing.
Today's ERP solutions are designed to help you to improve the operational efficiency of business resources. Businesses use ERP systems to integrate all its business processes into a single system to efficiently and effectively manage business goals.
The Differences Between CRM and ERP
While specific features and capabilities differ between platforms and vendors, here's a quick list of some of the many activities each type of business software can help you improve:
Use CRM Software to manage any of the following front-office activities:
Organize marketing efforts, manage the sales pipeline, calculate time spent on converting leads to closing deals, streamline your sales processes, automates customer service, track a customer's interactions with your business, share marketing and sales collateral, create data reports, learn which products sell best and when, prioritize leads, manage inventory based on historical sales data, collaborate to sell as a team, manage your business contacts, manage your business leads, share customer profiles with co-workers and See where leads come from.
Use ERP Software to manage back-office activities and tasks including the following:
Distribution process management, supply chain management, services knowledge base, configure, prices, improve accuracy of financial data, facilitate better project planning, automate employee life-cycle, Standardize critical business procedures, reduce redundant tasks, assess business needs, accounting and financial applications, lower purchasing costs, manage human resources and payroll.
