Last Updated: December 27, 2023

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Mrunali Gaikwad

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While trying to drive profits, efficiency, and growth for your business, you’ll likely come across many resources. The actual catch here is to employ the most appropriate ones. We often meet clients who are unaware of how choosing ERP vs CRM and vice versa impacts their businesses. The two tools are likely to confuse many being similar. However, there are significant differences that you must note before implementing a solution for your organization. Therefore, we decided to tell you everything you should know in this blog. 

ERP vs CRM -  Understanding Key Differences 

Both ERP and CRM automate core business processes to improve productivity. However, there are some major differences between the two. While Enterprise Resource Planning (ERP) systems are a central data hub to manage back-of-the-house operations, Customer Relationship Management (CMS) software deals with customer-facing elements like marketing and sales.  

Let’s understand each of them in detail to know what’s the most appropriate solution for your business. 

Enterprise Resource Planning (ERP) System 

ERPs act as the nerve center of your business operations. It helps coordinate diverse workflows, financial structures, and best practices across various departments. 

ERP software consists of multiple modules that efficiently manage various facets of business functions. From financial transactions to inventory and human resources management, each module collaborates seamlessly, offering an integral view of your organization's operations. This ensures streamlined data sharing and robust communication among departments, optimizing overall efficiency. 

Enterprise Resource Planning (ERP) software market
ERP Software Usage Across Major Countries

These systems can be deployed on-premises or on the cloud. Thus they can be accessed through the company’s servers or on the internet. SAP, Microsoft Dynamics, and Oracle are some of the most popular ERP examples. As per Statista, the Enterprise Resource Planning (ERP) software market is expected to reach USD 187.79 billion by 2030; growing at a CAGR of 14.8%. 

Key Features & Functionalities Of ERP Systems 

The concept behind ERPs is similar to that of a human body. Here internal data vitalizes streamlined workflows across departments to ensure healthy and flawless accounting and financial decisions. Some of the key features and functionalities of enterprise resource planning systems include:  

Features and Functionalities of ERP

Financial Management 

ERPs help you manage your business’s financial resources and transactions like your financial advisor. It tracks all business expenses, from office rent and raw material procurement to employee benefits and salaries. Consolidating this financial data offers accuracy and optimizes spending, cuts unnecessary costs effectively, and ensures seamless management of financial accounts and the general ledger.  

Human Resource Management  

With the help of ERPs human resource teams can automate various time-consuming tasks. They efficiently handle employee data, monitor benefits, design training programs, post job listings, and assess performance. They perfectly align workforces with your pre-decided goals. 

Supply Chain Management  

Supply chain management plays a major role in navigating goods and services. With ERP systems you can streamline supply-side activities to offer the highest value to customers and remain competent in the market. These systems automate and support inventory management, product planning, and data analytics so you can refine resources and make your supply chain more responsive.  

Project Management 

Enterprise resource planning software also extends support for excellent project management. It proves to be a great aid in planning, organizing, and managing resources. You can effortlessly assign and manage tasks, allocate resources, and track the progress. 

E-commerce Integrations  

ERPs can be integrated with your e-commerce software and sales platforms to synchronize various operations, manage orders and inventories, and collect and analyze data for better performance. This is like having a well-planned dashboard with analytical abilities that saves your time and supports reliable decision-making for efficient service and product delivery. 

How Do ERPs Benefit Your Business 

Businesses across various industries including healthcare, retail & e-commerce, manufacturing, finance, etc actively use enterprise resource planning systems for the significant benefits they offer. 

Benefits of ERP Software

Efficiency & Low Costs 

ERPs implement automation across various operational workflows, eliminating the need for multiple independent systems. This not only helps in reducing costs but integrates resources, promoting an environment of efficiency and collaborative functionality within your organization.

Increased Flexibility  

You can turn to ERPs as the ultimate strategic assets due to their exceptional adaptability. They help your businesses to swiftly align with changing market demands and respond to shifting business requirements. This flexibility ensures that companies can seamlessly customize their operations within the ERP framework, enabling agility and resilience.  

Smart Decision-making 

You get up-to-the-minute data and precise analysis based on accurate insights. This capability to access real-time information catalyzes making smarter decisions in different situations. By leveraging ERP solutions, businesses attain the necessary intelligence to steer operations with accuracy and confidence.

Easy Collaboration 

ERPs implement a unified central database accessible across all departments, enhancing communication. This allows a seamless flow of information, ensuring that every user gets a reliable source for internal insights. Thus there is less probability of errors and misinformation.   

Better Security 

With ERP systems, you get built-in security features that not only ensure compliance with laws and regulations but also alleviate the burdens associated with meeting these mandates. By safeguarding sensitive data, these software solutions effectively minimize the time and effort required to fulfill regulatory demands. Thus you can focus on core operations without fretting about data security and protection.   

Read More: ERP in Manufacturing System

Successful ERP Implementation

Customer Relationship Management (CRM) Software 

A CRM system streamlines customer interactions for businesses, from current clients to potential leads. It's a tool for all companies, nurturing customer relations for a successful business. With CRMs, you save time and resources while boosting the effectiveness of sales and marketing efforts.

Even basic CRMs have multiple datasets that analyze customer interaction history. They gather contact details, purchase records, and communication logs from various touchpoints like customer service, online forms, and sales interactions. Further, you can derive insights into customer behavior and preferences, refining marketing strategies, improving service, and pinpointing sales opportunities. 

CRM software market

CRM systems manage customer interactions across multiple channels, ensuring teams promptly respond to inquiries. They also automate various processes, from lead generation to sales forecasting, driving higher productivity and profits. CRM systems have reportedly led to an 87% improvement in sales, improved customer satisfaction by 74%, and business efficiency by 73%. This isn’t limited to specific industries, people are now actively integrating CRM in real estate, healthcare, travel & hospitality, finance, etc. 

The CRM software market is expected to reach over $80 billion in revenue by 2025. Some of the most popular CRM examples are Microsoft Dynamics 365, Zoho CRM, LeadSquare, Salesforce, etc.  

Key Features & Functionalities Of CRM Software  

As your business grows there’s plenty of customer data to deal with. While this data holds core solutions and keys to success, you could miss out on a lot when handling it manually. CRM software development can give an entirely different perspective on how you manage customers and leads.  

Key Features and Functionalities of CRM

Contact Management 

CRM systems monitor every interaction and communication with clients, creating a finely segmented database. You get plenty of information that becomes the backbone for sales and marketing teams, enabling them to offer personalized conversations within the sales pipeline. This level of detailed insight empowers teams to engage with clients in a way that resonates deeply, establishing stronger relationships and boosting conversion rates. 

Lead Tracking & Management 

Effective lead and opportunity tracking is essential for monitoring potential sales prospects. By integrating lead scoring mechanisms in CRMs, sales teams can adeptly prioritize and pursue potential customers, with a strategic and efficient approach to follow-ups. This streamlined process not only enhances sales team productivity but also significantly increases the probability of successful conversions, ultimately improving revenue generation for the business. 

Marketing Automation 

It’s time that you strategically target your potential customers and CRMs let you do that in the best of ways, facilitating marketing automation. Your teams can align their efforts with a customer's specific stage in the sales process. Furthermore, the ability to analyze campaign performance allows for continuous optimization, ensuring maximum efficiency and effectiveness in reaching and converting leads. 

Sales Automation 

Using software to streamline repetitive tasks, allows sales teams to focus on strategic customer engagement and tackle intricate challenges. By automating data entry and facilitating processes like follow-up messages, lead tracking, and opportunity management, SFA (Sales Force Automation) frees executives from mundane tasks. Thus they can dedicate time to plan and implement customer-centric strategies. This not only enhances productivity but also supports deeper customer relationships, driving business growth and agility. 

Sales Forecasting 

CRM software help you determine the effectiveness of your sales strategies and approaches. You can leverage it to study past performance and plan future sales strategies for increased lead conversions and revenue generation.  

Analytics  

Customer relationship management systems offer a wide range of analytics and reporting tools that let you track and measure performance based on key metrics like customer acquisition, retention, sales, and marketing effectiveness. These features and functionalities are collaborative which means you can let multiple users access it.  

Integration  

Custom CRMs allow integration with third-party tools like accounting software, project management platforms, emails, etc. Additionally, with chat and web analytics understanding customer behavior over a period gets easier.  

How CRM Benefits Your Business 

From facilitating the right approach to customer interaction to boosting your team’s productivity, CRM software does a lot for your business. Irrespective of your business size and customer base, there are many benefits it offers. 

Benefits of CRM for business

Improves Customer Relations 

CRMs help interact with customers on a deeper level by facilitating a better understanding of their behavior. By ensuring a seamless customer journey, backed by real-time insights you can improve customer loyalty and satisfaction.  

Boost Sales & Revenue 

By offering a centralized management point for all customer data, CRM helps identify opportunities and successfully convert leads. Your team can get proficient at sharing the right information at the right time to subsequently boost sales and revenue. 

Enhanced Efficiency 

CRM software guarantees an exceptional customer journey. It optimizes customer interactions by automating significant tasks such as welcome messages, post-purchase follow-ups, and order status updates. By seamlessly managing these tasks, it frees your team to concentrate on improving customer retention and driving new sales opportunities.  

Data-driven Decision-making 

With CRM systems, you get access to invaluable, insightful data on consumer behavior and preferences. Leveraging this treasure your teams can make highly informed decisions regarding marketing, sales, and overall business strategies. 

Smooth Collaboration 

Ensuring consistent and effective communication is crucial in converting potential leads into successful deals. Without effective follow-ups, potential sales opportunities might lose momentum and cool off. CRM software serves as a centralized platform, supporting team collaboration and enabling more streamlined and impactful communication strategies. 

Customer Retention 

CRM allows you to offer highly personalized and seamless customer experiences, presenting better opportunities for sales. Its implementation ensures minimal customer turnover, facilitating higher retention rates, and ultimately boosts business growth. 

Read More: CRM for Manufacturing Industry

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ERP vs CRM: What You Need? 

Both ERP and CRM offer data-driven valuable insights that can be leveraged to drive more sales, revenue, and better customer relations. But there’s a lot that makes them different. Understanding which one meets most of your organizational goals and needs is the key to making the right choice. 

The table below may help you summarize the differences between ERP and CRM. 

erp vs crm - Key Difference and benefits

Looking for a clearer answer to what’s most suitable for your business? 

You Should Opt for an ERP Software When: 

  • Your operational expenses exceed expected limits.
  • Data silos and misinformation is making it difficult to meet customer needs and handle market shifts.
  • Your company requires support in risk management or compliance with industry regulations.
  • There's a strategic intent to expand into new regions or industries.
  • You want to save time and resources with streamlined processes and discover cost-effective workflows and industry best practices.  

You Should Opt for CRM Software When: 

  • Customer retention seems difficult. 
  • You have a low sales baseline and need accurate data about potential and current customers to form and work on strategies.  
  • You are facing difficulties in planning effective strategies for specific regions or areas.  
  • There is a serious need to grow and boost your revenue.   

Integrating ERP and CRM 

CRM and ERP systems are both powerful tools that facilitate business operations and revenue growth. Integrating these solutions into one would be a perfectly acceptable decision. While this doesn’t mean that all your problems will be solved at once, there are still considerable benefits of merging the two. Custom implementations let you integrate various business departments as one functional unit allowing better decision making. It’s a clutter-free and easy thing to do. 

Ask yourself the following questions to understand whether you should integrate ERP and CRM systems: 

  • Is your company large enough to integrate accounting and sales departments? 
  • Is it crucial to address customers' needs when creating products and services? 
  • Are you dependent on numerous tools for management within your organization? Is there a need to reduce your tech stack? 

Once you have the answers to all of these questions, the choice becomes easier. 

Build The Best ERP and CRM Solutions With Us  

To keep your business updated while ensuring growth, you need flawless and highly competent solutions. Whether you choose ERP vs CRM or vice versa, you must make sure that you pick your development partner wisely. Look for someone who understands ERP and CRM systems thoroughly and can help you with the same knowledge along the way.  

At Narola Infotech, our 350+ enthusiastic experts excel in meeting your custom requirements with impeccable services and solutions. We leverage our industry knowledge and 18+ years of experience developing successful solutions for national and international companies. 

Take a look at our previous work. View Case Studies → 

If you are looking for guidance or development services for reliable CRM and ERP systems, feel free to reach out. 

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