September 12, 2020 Last updated September 12th, 2020 77 Reads share

CRM vs ERP: Making Sense of the Different and Shared Features

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The efficient management of processes in a company these days is impossible without automation. Various web development services are used to control business processes. These products come to the fore when it comes to business management and share many features. Nonetheless, they differ in many important aspects too. A further comprehensive explanation will help you draw a clear line between CRM and ERP and better understand your company’s needs.  

CRM: Increase Your Sales & Marketing Returns

Customer relationship management systems were created to raise the volume of sales and bring the quality of customer service to a new level. If you need to find “bottlenecks” in your business and optimize it, then CRM systems can be indispensable helpers.

The main idea of ​​CRM systems is to save the history of customer behavior on the company’s network resource. The composition of any CRM system is quite simple:

  • The operational part: CRM uses all possible channels for collecting information: phone calls, e-mail, social networks, and the use of promotional codes.
  • Information storage center: The system constantly collects data and structures all the collected data.
  • Analytical part: analyzes the information collected about the client, makes generalizations according to the specified criteria, and issues recommendations for further business development.

ERP: Tie Together a Multitude of Business Processes

ERP is aimed at organizing both business processes and operations within a company. It is used to manage human resources, assets, supply chain, and production of the final product, as well as financial management. It is intended primarily for use in companies with a complex and multi-level production structure.

ERP functionality can be divided into three main levels:

  • Finance Level

ERP is responsible for the transaction log, payment of bills, receipt and expense orders, taxes, cash flow, quarterly and annual reports, audit, monitoring the financial position of the company, decision making support.

  • Production Level

The system enables the organization of work and scheduling, management of supply chain, management of the means of production, distribution, and delivery, the fulfillment of contractual obligations, production chain management, etc. 

As in CRM, you can process an order and issue an invoice, but you need to remember that there will be much more data. It is more likely that the ERP is processing a bulk order with a lot of additional technical and financial documentation.

  • Coordination Level

ERP supports coordination of production between various enterprises and branches, warehouses and partners, monitoring and optimization at the level of general business processes, project management, analytics and planning, human resources management, as well as administrative functions. 

Key Differences Between CRM and ERP Systems 

ERP is a multitasking system, while CRM is more a sales automation tool. At the same time, CRM can be included in the ERP as a module or even a separate product from the same company. 

If CRM is a kind of a funnel, in which the target audience gradually matures to the state of actual customers, then ERP works with actual resources and processes needed to provide services or products to these customers. That is, CRM is focused on customer relationships, while ERP handles activities that relate to partners, customers, and suppliers. ERP assumes that you have already established certain processes for working with contractors and helps to control numerous receipts, deliveries, shipments, production, invoices, and much more. 

CRMs are generally more cost-effective, easier to implement, and are suitable even for small organizations and individual professionals (especially in the field of small retail and services). One thing that unites these solutions is that each of them needs a strong backend and user-friendly design.

ERP is a more complex system that can be redundant in the case of small companies. In a number of industries, successful development is possible through the use of only basic CRM functionality. With rare exceptions, small enterprises do not set up employee profiles, monitor task execution, or track KPI achievement; ERP systems can be superfluous in this case. 

Which One To Choose?

Enterprise web development requires users to first analyze their approach to business and, most likely, change it. The emphasis is usually made on the latest business intelligence trends as technology develops with enormous speed. In each system, the main thing is strict adherence to the requirements. It can be said quite definitely that if the level of training of personnel and the level of software control systems do not meet the requirements, it is better not to acquire such a system at all. 

With an insufficiently thought-out approach, with a reluctance or unwillingness to change your approach to business, the acquisition of CRM or ERP systems results only in a headache for the staff. The new tech stack can only bring benefits if you follow web application best practices. 

In general, before deciding on a particular system, ask yourself the following questions:

  • What challenges is your business facing?
  • What processes does it include?
  • What is its market and audience?
  • Who will become the system integrator: internal automation department, cloud solution provider, or a digital transformation consulting company?
  • What is the level of digital transformation maturity of your company?
  • Is there an economic sense of introducing a particular system and is it possible to calculate it?

Final Word

In short, CRM is a sales management system. It is mainly focused on customer workflow. ERP  is a set of systems for managing enterprise resources: production, human resources, finance, and logistics processes. The parallel use of CRM and ERP allows the business to develop more dynamically. 

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Victoria Melnychuk

Victoria Melnychuk

Content Creator. Passionate about influencing business audience. Fond of AI, IoT, Machine Learning, Blockchain and other game-changing technologies.

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