How ERP and CRM differ: 5 main differences

How ERP and CRM differ: 5 main differences

Both systems will help your business, each in a different way. Read about the differences between them. Then you will better understand what each one will bring you and consider whether you need them - both or just one of them.

What is ERP and CRM?

First, a brief clarification of terms. Information systems are hidden under both abbreviations:

  • ERP (Enterprise Resource Planning) is a central business system for managing processes in a company. In it, you deal with, among other things, finance, accounting, production, logistics and distribution or HR.
  • CRM (Customer Relationship Management) is a business and customer relationship management system in which you store information about clients and business cases in one place.

ERP controls virtually all processes in a company, while CRM focuses on business and customers. Both complement each other and thus make the operation of the company and the entire business more efficient.

Differences between ERP and CRM

When considering which of the systems you need and will use, it helps to understand the differences between them. Let's look at those now:

1) System size

ERP is a comprehensive business software, it automates processes and helps with company management. It combines various systems into one - you have the company's accounting, financial management, all HR agenda and personnel information about employees, payroll documents, but also warehouse management and logistics.

ERP can also include a CRM module focused on sales and client relations. It is used to record information about customers, business cases and record the history you have with clients.

A stand-alone CRM tool is a much simpler system that doesn't overwhelm you with a lot of features. It is therefore also suitable for small and medium-sized companies for which the ERP system is too robust, but it is no longer enough for them to register clients and orders in Excel.

2) Focus of the system

While ERP is focused within the company, CRM works outward towards customers.

Using ERP, you control and automate the processes of the entire company. Thanks to it, you connect individual departments that share data and communicate with each other. This will streamline all processes and increase employee productivity. ERP thus helps to streamline internal processes and administration, thereby reducing operating costs.

Also, CRM facilitates the sharing of information across teams, especially salespeople, marketers or customer support, as they can find all information about clients and jobs in it. Unlike ERP, it does not affect the internal functioning of the company, but it simplifies building and maintaining business relationships with clients. This makes the business more efficient, increases performance and profits.

For example, thanks to the recorded history of communication with the client, everyone knows what was dealt with with the client. He feels cared for, which increases his satisfaction and loyalty. Improving the quality of business relations also means improving the quality of business and thus higher profits.

3) Data used by ERP and CRM

You work with different data in each of the systems. Back to size again – ERP is a robust system that works with complex and diverse data. You have practically all company data in it. From accounting to production plans and product information to employee data.

In CRM, you only record information related to clients and business cases. It can also be data from marketing campaigns and the history of communication with clients. Compared to ERP, this is only a fraction of the data.

4) Who uses ERP and CRM

ERP is important for the smooth running of the entire company, which is why it is used by everyone across teams and departments - from managers to accountants, HR to warehouse workers, production and sales and more.

CRM is especially important for sales teams and customer support, it also helps the marketing department. People who are in contact with customers and care for relationships with them rely on it. Management then sees business results and predictions in it.

5) Who needs ERP and CRM

While CRM is worthwhile even for a small company with dozens of clients, a more extensive ERP system will be used by companies with more than a dozen employees and multiple departments.

CRM can be used in both B2B and B2C business and wherever you need to know your customers, improve your relationship with them and provide them with the best possible service. Therefore, CRM is a must for companies with a sales team, it is also used by financial advisors, real estate agencies or service companies.

Larger production, distribution and logistics companies cannot do without ERP. Plus all companies that are growing and need to streamline operations as much as possible so that they don't have to hire more and more employees for routine administration.

When to choose ERP and when is CRM enough?

It always depends on what you need. If you want to get to know your customers and improve your relationship with them, or have a better overview of the business, CRM will help you. If you need to automate company processes and get rid of administration, consider using ERP.

ERP also helps you when you use many tools and lose track of them. You can integrate other software into the ERP system, including CRM, if you already have it in place.

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