ERP vs CRM: Which do you need?

If the acronyms ERP and CRM are familiar to you, chances are you’re looking for a way to digitally transform your growing business.

But which should you choose: an ERP, a CRM, or maybe both? In this article, we address common questions, take a close look at both types of systems, and help you make a decision!

Strategy planning, resource management, and inventory monitoring used to be extremely time-consuming and error-prone tasks for business leaders. Data duplication, human mistakes, and miscommunication were daily obstacles managers had to deal with.

Fortunately, business software has evolved to make processes and communication inside companies clearer and more efficient. With the help of a centralized system that all your company’s departments can access, everybody can be on the same page and know what’s going on in the organization.

Enterprise resource planning (ERP) and customer relationship management (CRM) systems are both powerful tools that aim to boost a company’s efficiency, streamline business processes, and increase profitability. They are alike in many ways, but their core functions differ. To understand their true value and make an informed decision about which to adopt for your company, you should evaluate ERP and CRM as two separate systems.

ERP vs CRMSOURCE: STEELKIWI.COMWhat is an ERP?

An enterprise resource planning system manages all elements of a company’s operations. It removes the need for handling paperwork and automates business processes.

An ERP lets employees and managers enter standardized data into a system and swiftly share it across an organization’s departments, creating an enterprise-wide and up-to-date overview of processes. An ERP also visualizes all of a company’s information, which helps workers quickly detect issues and resolve them at an early stage before they get serious.

Enterprise resource planning software performs the role of a central database for the entire company. It can contain information about finances, payroll, accounts payable and receivable, financial reporting, and so on. ERP software holds useful tools for managing multiple sectors of a business, such as tools for internal communication, data exchange, and customer-related operations.

What is ERP II and how is it different from ERP?

In some sources, current ERP systems can be called ERP II. This name has raised many questions and increased searches about the meaning and derivation of the term.

Let’s unpack this.

ERP II is the successor of ERP. It’s the name given to ERP systems developed after 2000. The major difference between an ERP and ERP II system isthat the latter is much more focused on web-based operations and the use of web-based technologies as well as customer relationship management, business intelligence, and supply chain management.

What is a CRM?

Customer relationship management software handles all customer data. It manages all the ways in which customers, current or future, interact with a company. A CRM can improve an organization’s ability to build strong relationships with customers, keep customers and prospects engaged, close deals, and generate leads.

A CRM system holds the personal details of customers and prospects, such as names, phone numbers, addresses, and purchase histories. It collects and analyzes customer data, which then can be used to provide clients with better recommendations. For instance, if a customer buys more than an average number of cargo pants, your system can use that information to make great suggestions of other items the customer might enjoy or be interested in.

A customer relationship management system can help you build stronger relationships with leads, ensure stable high-quality services, and offer a smooth transition from leads to customers — and then to loyal customers — boosting your long-term profitability. A CRM provides companies with consumer insights they can use to identify target audiences and develop marketing strategies to stay in customers’ minds.

CRM systems can be integrated with ERP and other systems. You can also share data between an ERP and CRM — for instance, to make shipping dates or ERP data on invoices available to customers.

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