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10th June 2021 | in Blog

CRM and ERP: What’s the Difference?


CRM and ERP – the same or different? We know that distinguishing business management software can be confusing, with a raft of terminology to describe different platforms and capabilities.

That’s why we’ve put together this essential guide to CRM and ERP software. Covering what these systems are, what they do and the benefits they offer, our resource can help you determine the key differences between the technology – so you can determine which one is the right fit for your business needs.

Use the links below to navigate or read on below for the complete guide.

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What is ERP Software?

Enterprise resource planning (ERP) software is a business management solution that improves the efficiency of operational functions by automating processes and unifying data across an organisation. Through a shared database, it combines the key functions of a business, including finance, inventory management, procurement, accounts and logistics, facilitating enhanced reporting and data-backed decision-making.

Emerging from material requirements planning (MRP), modern ERP software seeks to unify all areas of an organisation. By leveraging a central data source, such systems better connect teams and departments across a business, simplifying day-to-day processes, freeing up resources and improving efficiency.

warehouse

What Are the Benefits of ERP?

Modern ERP software offers a wealth of benefits to businesses in all sectors, and particularly those that rely on a complex supply chain and efficient inventory management. In unifying business functions through a single shared database, ERP offers the following advantages:

  • Standardised workflows – a centralised database and intuitive interfaces mean businesses can standardise workflows and processes across their organisation, for greater efficiency and control. This also allows for enhanced collaboration and inter-departmental cooperation, driving new leads and growth.
  • Efficient supply chain management – with a huge range of inventory tracking and stock management functions and applications, an ERP system makes light work of supply chain management. Take control of your inventory with real-time monitoring and enhanced tracking capabilities from the point of order to the point of delivery.
  • Enhanced reporting – improved reporting is one of the main plus points of ERP technology. Supported by a shared, unified database, individuals from multiple business functions can access data with ease, while the system also offers a range of automation features to make the process simpler and less time-consuming.
  • Business intelligence and analytics – with reporting comes analysis, and the nature of a unified ERP software database means that employees can investigate data on a granular level, extracting powerful insights which support data-backed decision-making.
  • Reduced financial close times – the primary goal of finance personnel is to ‘close’ the books with minimal delay, a task that typically requires extensive data entry. ERP software automates much of the work involved, freeing up resources and supporting faster more efficient financial closing.
  • Improved auditing – businesses that deploy ERP software can choose which employees have access to the software. This supports improved system auditing and enhances the security of internal systems and data.
  • Controlled software budgeting – with two or more business functions sharing the same database, interfaces and controls, this enables greater control over software spend – making day-to-day budgeting simpler.
  • Customisation and add-ons – modern ERP systems are highly customisable and are designed to enable unique ways of working to be accommodated in the software. They also offer additional functionality in the form of optional modules and integration with 3rd party ‘best of breed’ application add-ons to extend the functionality of the software as and when needed. This ensures complete scalability and future-proofing.

warehouse managers talking

How is ERP Software Used?

So, when might you use an ERP system as opposed to other business management platforms? Suffice to say, the software can be leveraged for a variety of day-to-day applications, automating time-consuming tasks, removing bottlenecks and streamlining operational workflows.

Here are some of the typical applications for ERP software:

  • Track, monitor and manage a supply chain infrastructure
  • Customer and Supplier Relationship Management
  • Enable greater fiscal control in financing and accounts
  • Order and returns management and processing
  • Day-to-day warehousing tasks – including fulfilment, inventory sorting and maintenance
  • Procurement, credit control and administrative tasks
  • Integration with online store or marketplaces

This is just a handful of the applications which ERP software can support. With modular customisation and regular updates, modern ERP systems can handle a huge variety of tasks, so organisations are assured of strong ROI and all-around performance.

What is CRM Software?

Customer relationship management (CRM) is a type of software solution that records customer interactions with a business. It allows firms to leverage customer data and information to drive sales and marketing efforts, as well as being an effective tool in improving service standards.

CRM software was originally conceived to aid telesales, allowing operators seamless access to customer information in an on-call setting, improving service and boosting the possibility of logging a sale. Over time, it has been extended to become a multi-platform customer management solution, offering businesses a centralised platform on which to gather and control customer information and interactions.

customer service worker

What Are the Benefits of CRM?

CRM software is essential for any customer-facing brand, providing a range of benefits, including:

  • Data segmentation – a CRM system supports full customer segmentation. Not only does this aid sales and marketing efforts, but it also supports customer retention and targeting, for long-term ROI.
  • Deeper customer insights – gain deep insights into customer behaviour, with interactions, communication and feedback enabling you to make improvements across the business.
  • Enhanced communication – a CRM product allows for seamless communication between your people and your customers. Collating customer data in a single, intuitive location, every interaction is supported by on-demand information that can enrich your communications and service.
  • Improved service levels – speaking of service, CRM is the ideal way to sure-up and improve different areas of your operation. With easy-to-access customer data, service personnel can course-correct on the fly, helping to improve service levels and encourage greater brand advocacy.
  • Compliance and data safety – customer data is among the most sensitive and valuable assets a business can possess. A CRM platform helps you better manage this information in a secure location, helping you stay on the right side of compliance laws.
  • Telesales functionality – boost the effectiveness of your telesales operators with a CRM-supported sales strategy. With this kind of system in place, call managers can prioritise high-value customers, encouraging sales and retention.

How is CRM Software Used?

While it has fewer overall applications than ERP, businesses can leverage modern CRM software in several powerful ways, including:

  • Support customer service teams
  • Conceive new marketing strategies and targets
  • Identify new sales leads and opportunities
  • Support telesales operatives
  • Improve products and services through unified customer feedback channels

smiley call centre worker

The Key Differences Between CRM and ERP Software

CRM and ERP software are both considered essential tools for long-term business success. But there are a few key differences that separate them, including:

  • While CRM is purely customer-focused, an ERP system can offer wide-ranging functionality – with optional modules to extend your experience.
  • A CRM system is considered a ‘front office’ system because it’s primarily used by sales and marketing personnel. ERP software, on the other hand, is called a ‘back office’ as it deals with logistics, infrastructure and day-to-day operations.
  • While some ERP platforms contain CRM functionality, CRM never has the capabilities of a full ERP system.
  • As a standalone platform, CRM is better for customer discovery and insights, while ERP is ideal for managing workflows and processes. When integrated, they make for a powerful, all-encompassing business management solution.

Can You Integrate CRM and ERP?

Yes, you can, and it’s the recommended option. CRM and ERP systems are equally as valuable, but they work best when they’re properly aligned, integrated and able to share one another’s data.

If you were to invest in both CRM and ERP software without integrating the two, this would require a huge amount of maintenance and upkeep. What’s more, duplicates and errors could undermine any benefits you glean from the two systems, so it’s always better to integrate the two from the start.

A fully integrated ERP and CRM system guarantees that every business function can benefit from the software. For example, sales and marketing can utilise the same centralised data set as warehousing and logistics personnel – an advantage that could help streamline processes and cut costs in the future.

Typically, CRM is built into a full ERP system; this is the most efficient and practical means of integrating the two platforms. It can also save cost, with the installation of a CRM module on an existing ERP system being considerably cheaper than the upfront and ongoing cost of a full standalone CRM product.

We hope you’ve found this guide on CRM and ERP useful, and that it’s shed light on how the two systems compare. At Intact, we can help you find the best software solutions for your business needs, with an experienced team here to make sure you get the most from your systems. For more information or to speak to one of our expert technical advisers about your requirements, visit the homepage or get in touch.

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