Difference Between CRM And ERP

This article explains the key differences between CRM and ERP systems. Understanding the differences can help businesses choose the right system to meet their needs.

CRM (Customer Relationship Management) and ERP (Enterprise Resources Planning) are business management tools, but their uses and functions differ. Many people confuse both terms, using CRM when discussing ERP and vice versa. In this blog, we will cover the difference between CRM and ERP.

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Tabular Comparison – ERP vs CRM

The main difference between ERP and CRM is that CRM focuses on managing customer interactions and relationships, while ERP focuses on managing a business’s internal operations.

	CRM	ERP
What is it?	A tool that allows us to manage each interaction with the client’s “Front office”.	A tool that allows us to manage the “back office” or internal operations of the company.
Aims to	Manage the achievement of marketing/sales objectives and proposes business strategies to improve deviations in case of compliance.	Optimize the management of internal resources.
Orientation	Highly sales and marketing oriented	Can be used by multiple departments within the company
Assessment	Assess the potential of future business operations and discover business opportunities.	Helps to assess the efficiency of internal processes.

CRM and ERP represent excellent investments if we know how to leverage them. Many ERPs allow a fully compatible and integrated CRM module to be incorporated.  The real power lies in the integration of the ERP with the CRM.

Also Read – What is ERP?

Meaning of ERP

ERP full form is Enterprise Resource Planning. It is software for managing a company’s business processes. For example, accounting and supply chain management. Its goal is to unify business processes and enable better use of data for optimal decision-making.

Meaning of CRM

Customer relationship management (CRM) is a technology to manage a company’s relationships and interactions with existing and potential customers. CRM aims to improve business relationships, stay connected to customers, streamline processes, and enhance profitability.

Must Read – Key Phases of ERP Implementation and Best Practices to Follow

Key Differences Between ERP and CRM

The ERP controls many of the company’s internal processes, such as billing, accounting and finance, warehouse and stocks, supervision of sales and purchases, and administrative control. In short, it manages all the resources of my company.

CRM is essential to create marketing strategies: its objective is to identify the ideal clients for the company, attract them, manage relationships more decisively and get them to convert into sales. One of the main characteristics of CRMs is that they are dynamic and agile tools.

Once we are clear about its functions, we can establish these differences between a CRM and an ERP:

Purpose

A CRM is designed for companies of any size: from small ones with few clients to large companies with a significant volume of commercial work. The ERP is a tool much more oriented to medium and large companies, with multiple differentiated departments that require coordination. It usually involves a much higher start-up cost than CRM.

Implementation

CRMs are often easier to implement. ERPs work interdepartmentally, so their implementation is more expensive and lengthy in time and resources as it involves many more people.

Being more complex, ERPs also require training people with varying ICT proficiency degrees and learning curves.

Related – Difference Between ERP and SAP

Migration

Another aspect that should be discussed is the ease of migration of data and information from other previous software products that the company has been working with.

As it is a more specific technology, transferring customer data to a CRM is much easier than migrating all the company information, including payments, collections, shipments, delivery notes, etc., in the case of the ERP.

Users 

Normally the users who use one tool or another are different. 

ERP is usually used mainly by the administrative and finance team, although it all depends on the modules we have integrated. 

CRM is mainly used by sales and marketing teams to launch campaigns, track sales targets, and control business opportunities, among many other things.

Company and Sector

ERP facilitates the company’s management, and its benefits are evident practically from the first moment. In addition, incorporating  ERP modules (financial, traceability, e-commerce, etc.) is very useful for businesses in some sectors. On the other hand, microenterprises and SMEs can benefit from CRM, especially when it comes to controlling and growing sales.

Related – Types of ERP Systems: Which One is Right for Your Business?

Conclusion

CRM and ERP are business tools that allow us to manage our business better, but each comes with a different and defined purpose. The CRM is for a more global management of the company, focused on cost control; ERP is specific to the relationship with customers and, therefore, will help us increase revenue.