CRM and ERP: What’s the Difference and which one is for you?
When it comes to business management solutions, the most common acronyms you hear of are definitely CRM and ERP
They both are similar in a way, as they both focuses on making your business an organisation.
Infact if you are a business owner (or a business executive) you must often wonder..
What exactly ERP or CRM is?
Are they different or are they same?
Is CRM only a part of ERP or is it completely different software?
Do you need one of them or both to reach maximum automation in your business?
So here we are today, in this post we are going to learn what exactly these two are, if they are same or different piece of software solutions and how are you going to make the most out of them for your own business.
What is an ERP?
In our previous post we learn what ERP is , in the easiest way possible. You can check it out here or Let me brief you once again fresh.
ERP basically stands for Enterprise Resource Planning, if does not make you get the grip of it (I dint understand when I was introduced to the term for the first time 5 years back)
ERP is a software solution for enterprises to better plan their resources,
it means to be able to manage all their operations and resource in a more planned way to achieve best optimization and best possible results through various operations.
In a more broad sense it is a collection of all possible software solutions, you need to run your business, working on same platform so each one is seamlessly integrated with the other and as a result you get all your operations connected to a same central management system.
Complete Details here
What is CRM?
Stands for Customer Relationship Management
Is considered as a software to manage your activities around your customers.
But in true sense actually it is
A methodology used to manage your relationships with your customers.
And the tool we use to achieve that becomes what we know as the CRM.
In short, a CRM system is a tool to organize your Leads, Prospects, your Customer’s data in a way you can achieve better sales results.
Are they same or are they different?
22% of salespeople still don’t know what CRM or ERP is, and 40% still use informal methods like spreadsheets and email programs to store customer data.
So Why is this confusion in the first place?
Coming from the above definitions itself we can now figure out that
CRM and ERP as softwares, they have similar focuses
That is to increase your overall Profits and boost your business to grow bigger
But completely different set of functionalities.
One takes care of your customers another takes care of the other portions of your business in fact every other portion of your business.
Some may say they are two different sides of the same coin, but even that is also not completely true.
Coming down to
Are CRM and ERP related? and if yes, How are ERP and CRM related?
Yes its true that CRM and ERP are related to each other.
But they are not cousins..
They can be father and son, or mother and daughter if you may think so
Yes ERP came first and then came the CRM
As we get deeper insights to ERP, we understand that..
CRM is one of the five pillars an ERP stands on, the other four pillars being
- Financial Accounting
- Supply Chain Distribution Management
- Human Resources Management
Each of these 5 pillars is what an ERP comprises of (more or less)
So that brings us to another question here
Is CRM only a part of ERP? or is it something that stands separately out?
So, Is a CRM only a part of a bigger unit the ERP?
I mean all this time you thought they are equals and then they just happen to be units and subunits?
Not surprisingly but true, the answer to the above questions is Yes.
A CRM is a part of an ERP but it can stand alone for your business as well
Yes its true
It is a part of a full fledged all in one ERP Systems like Odoo ERP or SAP or Microsoft Dynamics
But can be exclusively deployed just to provide its unique benefits as well. Salesforce CRM or Zoho CRM bears an excellent example to this.
I would like you to understand here that crm and erp are not mutually exclusive softwares and that they can complement each other as well depending on your business model.
That is why there is so much confusions out there. (but please do not reveal it yet, it is just our secret..)
So how are they different and what are the benefits of one over the other?
What are the differences between CRM and ERP? and What are their unique benefits for your business?
So CRM V/s ERP
The difference can be seen as what a CRM does is like the front office activities that your customer can still notice and can even compare between two similar companies for eg:
A CRM Software helps your organization
- Streamline your sales processes
- Manage your business contacts lists.
- Organize your marketing efforts.
- Manage your sales pipeline
- Automates your customer service
- Track a customer’s interactions with your business
- Share marketing and sales analytics with your team.
- Create Sales Reports
- Analyze and Track Improvements
And what an ERP do is more like the back office activities of your organization
An ERP Software helps your organization
- Handle your Invoicing and Financial Accounting
- Manage human resources and their Payroll
- Handle your Sales Distribution Process
- Handle Your Supply Chain.
- Automate employee life-cycle
- Provide infrastructure for better planning
- Reduce your redundant tasks
- Lowers you cost of purchasing activities.
But this does not mean they are equal software, chances are that you might need both but the CRM still remains one of the five pillars an ERP stands on.
Can CRM and ERP be integrated?
Yes the best part of our time is that technology fully supports business activities nowadays and not only does we can integrate CRM and ERP
There is more to it
You can also have a system that already contain both the CRM and other ERP features in it. For eg Odoo, the all in one business management tool and also the fastest growing business management product out there.
Just like you get Operating Systems and Hardware Devices seamlessly integrated in your Apple computers or Iphones.
Seamlessly integrated means complete coordination among the two tools and most optimized data sharing as well.
That’s all about crm erp in a glance..
and the matter of the fact is
30% of businesses integrate their CRM with their ERP. (Connecting Software)
But the question you must be most interested in here is
When do you need a CRM? And when do you need an ERP and how to decide if you need both?
Coming down straight to the answer
You need a CRM when you need to streamline your Lead Generation, your Client handling and need to streamline the complete Setup that operates around your customers.
Remember your customers brings the blood in the veins of your business and a CRM acts just like the heart of the business, it pumps in and out the so called revenue blood
And smart businesses just not happen to take on every other customer just out of sheer luck
It’s the real time data analysis of what is working and what is not in marketing
Real time analysis of feedbacks your customers give you
Customer delight ultimately that brings them back and again to you
Not knowing your customers can be a little too risky for any serious business.
CRM gives businesses a 65% boost in sales quotas (Innopple Technologies)
Here are 17 ways you can increase your sales with a CRM.
So that was a good plea around when and what for you should be using a CRM for your business
What about the ERP
When do you think you will need an ERP
You will need an ERP when you think of achieving true automation to your business
The cloud offers unique flexibility in terms of small business investments, particularly to small IT teams. Studies have also shown that most of the 22% of the companies that go for cloud-based ERP solutions appreciate cost savings as a result.
As the business owner all you need to expand is to get yourself out of the day to day operational activities of your business,
Amazingly unique advice but it is actually true.
You need to get out of most of your operations being done so you could focus on its expansion. And you can get out of all your operational activities only if there is something to take care of everything is working fine.
And what is that
And an ERP Software provides you to achieve just that.
Tools to better organize and manage all your business related activities
if you need one or both
depending upon your current business size, your business goals and nature of your business you can have both as well as just one of these.
Bonus for you
A good Example of pocket friendly ERP and A good Example of a pocket friendly CRM
Zoho CRM, Salesforce or Microsoft Dynamics bears very good set of examples of a pocket friendly CRM.
Odoo or SageERP bears a very good example of an all round all in one business management software also known as the ERP, which can give you the best of both worlds.
Check out Odoo 11 features here.
Here is what to do next
If you still not sure if it is high time you implement a CRM or an ERP software for your business.
Here is a list of all that you can achieve with a CRM or an ERP
Check this out and see if you can live without them.
101 ways an ERP or CRM can benefit your business, a few of these you won’t be able to find anywhere all over the internet, as they come right form our deep understanding of the subject.
And here is a actionable step by step list of how to successfully implement a CRM or ERP.