CRM Vs. ERP : what’s the difference
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.
What is CRM?
CRM at its simplest is systems and processes for managing a company’s interactions with current and potential customers. When we talk about CRM we usually are talking about CRM Software. CRM software is used to organise, automate and synchronise sales, marketing and customer service.
CRM has developed to include all areas of the customer experience, keeping the customer happy and in turn keeping them loyal and more valuable to your business. It is the process of identifying potential leads/prospects, nurturing them and guiding them through the sales process to close the business. Once they are a customer it is ensuring that you maintain that relationship and encourage repeat business – either more frequent orders or higher value.
What is ERP?
Where CRM manages the customer, ERP is used to manage the business. ERP is a system for improving the efficiency of business processes. Like CRM, ERP allows for the rapid sharing of standardised information throughout all departments. Employees all enter information into the ERP system, creating a real-time, enterprise-wide snapshot. Problems in any area will automatically create alerts in other affected areas. This allows departments to begin planning for issues before they become a problem in that department. In short, by allowing the business to focus on the data, instead of the operations, ERP provides a method for streamlining business processes across the board.
What’s the difference?
ERP and CRM systems use different approaches to increase profitability. ERP focuses on reducing overheads 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.