ERP Vs CRM: Which Is Better For Your Business?


We are now living in a digital ERA where everything is getting digitized and so is the way of our work culture. ERP and CRM are the two leading software solutions you will need to automate your business process to the core. Both CRM and ERP play a vital role in the growth of your business. Here in this article, we will tell you about the difference between ERP and CRM also whether your business needs ERP, CRM, or both. Let’s dive into:

What is ERP Software?

If we tell you in short, Enterprise resource planning (ERP) helps companies run their business successfully by connecting their financial and operational systems to a central database.

Now let’s understand this in detail Enterprise resource planning (ERP) developed from material needs planning (MRP), which enabled manufacturers to comprehend and manage all the resources needed to run a successful business (ERP).

ERP software acts as a common database for all divisions of a corporation. The general ledger (GL), accounts payable, accounts receivable, payroll, and financial reporting are all considered part of finances.

ERP business software, however, includes data pertaining to service organizations as well as inventory management, order management, supply chain management, and data management.

Distribution, production, fulfillment, and acquisition are all included in ERP. Some ERP systems provide e-commerce, CRM, and human resources management systems (HRMS).

Why is ERP Software essential for business?

Enterprise Resource Planning (ERP) enables an organization to take advantage of a number of connected applications. ERP systems automate and streamline operations, resulting in an effective, more precise, and more productive company. Complete visibility into fundamental company processes is provided by ERP.

What are the 3 common types of ERP?

The three most popular forms of ERP systems are hybrid, on-premise, and cloud-based.

How much is ERP software going to cost?

Typically, the ERP software price ranges between 60,000 and 20 lakhs, depending on features, number of users, functions, and other factors.

What is CRM?

Customer relationship management, or CRM, is a type of software that tracks all of a customer’s interactions with a company. It is Initially created for sales departments, CRM functions were also known as sales force automation (SFA).

As soon as the phone stopped being a unique medium for customer care, alternative technologies were quickly created to handle customer service interactions and marketing, especially in the call center, or as it came to be known, the contact center.

Is salesforce a CRM or ERP?

People often seen asked this question that is salesforce a CRM or ERP? They always get confused between CRM, ERP, and SFA so, let us clear this for you SFA is a part of CRM it organizes the collection, analysis, and distribution of data in a sales pipeline.

SFA software seeks to simplify administrative work for sales representatives and their managers by delivering the appropriate information to the right individuals at the appropriate time.

CRM Vs ERP: Benefits

The main goal of CRM is to provide businesses with a single location to store all client information and keep track of all customer interactions. With this knowledge and the aid of analytics, organizations can make better choices regarding which consumers to target for increased revenue, the effectiveness of their sales teams, the most effective ways to provide customer service and more.

On the other hand, An ERP system’s advantages come from having a single, common database for all operational and financial data. This significantly impacts reporting, including significant impact on reporting, including both routine monthly reports and special reports that leadership requests.

Thanks to a single source of operational information, staff members can go deeper into reports to discover financial insights; and financial data eliminates the requirement for IT or finance teams to perform the research and reporting.

This enables companies to take quicker, data-supported decisions that can have an impact on everything from profitability to new growth prospects to increasing organizational efficiency.

A faster financial close is another advantage that businesses commonly list when switching to an ERP system. At the end of each month or quarter, finance teams typically summarise the results after accounting for all revenue and expenses, a process known as closing the books.

When using spreadsheets or basic accounting software, closing the books often involves a lot of human labor, data entry, and contacting several departments for financial data.

Companies have claimed shorter monthly close times thanks to centralized ERP software that automates many of those procedures; this task could now only take a week or a few days.

What is the Difference Between CRM and ERP?

Although the entire organization will eventually rely on both ERP and CRM systems, the main distinction between the two is that while CRM is utilized by the sales and customer care departments, ERP is largely for financial data and the finance department. The front office is the latter, whereas the former is frequently referred to as the back office.

CRM software systems do not contain ERP components, however, some ERP systems do, while others do not. SFA for instance does not manage transactional data, hence it is not an ERP system. It may have access to invoices or order history, but such information is obtained through integrating with the ERP software.

How can ERP and CRM systems be Integrated?

There is a requirement for data sharing between ERP and CRM systems. It is preferable to achieve this through technical integration rather than by maintaining two sets of data.

A sales rep, for example, might want to access a customer’s order history, credit status, or outstanding payments when attempting an upsell or cross-sell campaign. The finance department might need access to the CRM system to calculate sales commissions when they run payroll or bulk order discounts.

A CRM system built on top of an ERP platform also creates advantages for business leaders who may need a consolidated way to examine pricing structures and manage KPIs like customer acquisition costs and customer lifetime value.

Configure, price, quote (CPQ) is a typical process that requires close CRM and ERP interaction (CPQ). Many firms depend on CPQ technologies, which need data from CRM and ERP systems.

Most of the biggest CRM and ERP systems offer prebuilt connectors for one another, either directly or through a third-party partner. However, when the CRM or ERP system is upgraded, these integrations can be costly and challenging to maintain.

What are the similarities between ERP and CRM Systems?

Business software like CRM and ERP both use relational databases to keep and analyze data. Software as a service (SaaS), in which the provider administers the software in its own data center and clients access it over the cloud, or the conventional on-premises model is used to supply both.

Although the two SaaS, ERP, and CRM, respectively, started out around the same time, CRM systems moved to the cloud more quickly because they were easier to construct and because businesses were first hesitant to store financial data there.

So, What do you need a CRM or ERP System for your Business?

Both software systems are required by almost all manufacturing organizations, whether they are big businesses or small ones. In the end, both CRMs and ERPs can help you increase the profitability of your company, but they each have unique capabilities and are crucial to your operation.

Your primary company operations are simplified and automated by both types of software: While an ERP system is interconnected and used across different departments, a CRM is concentrated on the sales side of the business. Each one will assist you in enhancing productivity, reducing expenses, and boosting profitability.

Final Conclusion! ERP Vs CRM

With the help of customer relationship management, a firm can keep close contact with its clients. Additionally, building trust with customers and understanding their preferences is essential.

ERP unifies different organizational functional units so they can easily share information and communicate with one another in real-time via a single computerized system.

A CRM that can enhance customer communications is the logical next step for businesses adopting ERP. Still, they frequently concentrate on the finance module that automates fundamental accounting activities and enables stakeholders to examine available cash and the flow of money.

There are many advantages to CRM systems that are connected with ERP systems. Since all data is updated in real-time, there is no need to wait for batch uploads Unified ERP and CRM systems are often less expensive than purchasing point solutions separately, whether through middleware links, etc.

Systems created specifically for ERP are better equipped to manage transactional procedures, which results in easier programming, adaptations, and usage of third-party tools.

Frequently Asked Questions:

Q1 What are CRM and ERP in full form?

The ERP stands for “Enterprise Resource Planning” and the CRM stands for “Customer Relationship Management”.

Q2 ERP or CRM: Who is the data master?

ERP solution provides multiple data management capabilities (collection, monitoring, analysis, archiving, corrective actions, etc.). This is one of the most prominent reasons ERP is considered the data master within companies.


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