What is the difference between ERP and CRM?

What is the difference between ERP and CRM?


You must have heard about the terms ERP and CRM quite often. These both are software systems that aim to generate revenue, automate tasks, and boost productivity. However, their approach is different. 

In this post, let’s find out what ERP and CRM stand for, what they do, and what is the difference between ERP and CRM software. 

What is CRM?

CRM stands for Customer Relationship Management. It is a software system that manages your organization’s relationships and interactions with existing and potential customers. CRM aims to make customers happy with an improved customer experience and build a long-term relationship with them. CRM software is mainly used by the sales and marketing teams of an organization. 

Here’s what a CRM can do for you,

1. Helps in filing the information of your clients and prospects

2. Assists when you try to acquire new customers

3. Helps nurture your relationship with your existing customers

4. Stores the data in a database 

5. Carries out the analysis of the data

CRM Benefits

Investing in CRM software is a great idea as it helps identify, understand, and assist customers. It has several benefits to offer,

1. A Better organization of information

With a CRM, you can store a huge list of customers, their details, and all the essential information regarding them in one place. It enables categorizing all the data and interactions with customers and prospects for future reference using organizational software. With CRM, it is possible to get access to the information you are looking for. It will help save the time of sales and marketing teams.

2. Improved access to information

CRM is quite helpful for providing great customer service as it provides detailed information of customers to anyone who needs it in the organization. The person assisting the customer can easily access the details, and that way, the customer needn’t repeat their issues and preferences once again. So, it doesn’t matter who is in conversation with the customer as the CRM makes all the information available. This way, you will have happier customers. 

3. Automation of tasks

In sales, there are several tasks that you have to take care of as it is not enough to find and nurture leads. These tasks include filling forms, taking care of legal matters, and so on. However, the burden can get off your shoulders with CRM systems that automate repetitive tasks to help you focus on addressing customer pain points and closing deals. 

4. Information access to multiple teams

A CRM system stores all the emails sent and phone calls made to the customer in one place. The communication with customers and prospects in one location allows all the organization’s teams to access the information they need. Teams such as marketing, sales, and support can work together seamlessly that ultimately benefits the business. 

5. Better analytics and reporting

CRM enables you to get your hands on analytical data. It is possible to integrate CRMs with other platforms and generate accurate reports. It helps in measuring the performance of the organization and making strategic decisions to make improvements. 

What is ERP?

ERP stands for enterprise resource planning. ERP software system that enables running the whole business includes the core processes such as finance, HR, manufacturing, supply chain, procurement, etc. The aim is to smoothen business operations. With enterprise resource planning software, all the departments can get access to updated information. 

Here’s how an enterprise resource planning software can help you,

1. It enters data, and you can find it everywhere in the system where it matters

2. It can optimize the departments of your organization

3. It connects every department and automates the workflow

4. It offers a centralized database to manage your enterprise 

ERP Benefits

Here are the main benefits of enterprise resource planning software that makes it an important investment for every organization,

1. Increase in productivity 

As ERP smoothens and automates all the core processes of a business, it can help an organization get better outcomes with lesser resources. 

2. Source of information 

An ERP works as the main source of information for an organization, and it helps in providing answers to questions that are crucial for the business. 

3. Better reporting

With ERP, you can speed up business and financial reporting and share the results easily. You can act upon them and make improvements in different aspects of the business. 

4. Reduced risk

Having ERP software increases control in an organization, making it possible to comply with regulatory requirements. It helps predict upcoming risks and thereby making it possible to prevent them. 

5. Grab new opportunities

As you gain access to real-time data and streamlined processes, it is possible to identify opportunities faster and take action.

ERP vs CRM  – What is the Difference Between them?

Let’s get to the ERP and CRM difference. The main difference between ERP and CRM is that CRM manages the relationship between your organization and the customer while ERP manages the whole organization, including potential customers and clients

Both CRM and ERP aim at increasing the profit of the business, but their approach is different.

An ERP system concentrates on minimizing overheads and bringing down costs with the help of automation. It increases the efficiency of business processes, and ERP ensures that there is minimal expenditure on them.

A CRM helps an organization earn more profits by making more sales. It is a central repository of customer data. It makes it possible for everyone in the organization to use the data to improve relationships with customers that can help you earn their loyalty and make more sales. 

Another difference between ERP and CRM is that while CRM is meant for front office activities, ERP takes care of the back office ones. 

Difference between ERP and CRM

ERP vs CRM – How are they similar?

There is much confusion around the two terms CRM and ERP due to a lack of information. Most people know what a CRM system offers but are not aware of whether an ERP would have the same functions or not. You have to understand that while ERP is a superset, CRM is a subset. A majority of the ERP systems have some CRM components, and it would let you integrate with a 3rd party CRM. However, the CRM components offered by ERP systems usually cannot be at par with the specialized and stand-alone CRM systems available in the market. 

As you have already seen, both CRM and ERP have one big commonality: both systems aim at increasing the company’s profitability even though their approaches are different. 

There are other similarities between them, such as they both use a relational database for the storage and analysis of data. Businesses use both systems either through SaaS or on-premises models. 

Common Functions of ERP

While all enterprise resource planning software is not the same, here is what you should look out for in your ERP solution,

1. Financial management

Financial management and accounting tools form the basis of all the business processes. Having financial tools enables the organization to stick to budgets. The basic accounting functions like accounts payable, accounts receivable, ledger, etc., are a must-have. It would be great if there are financial forecastings and calculation of tax. 

2. Human capital management

HCM or human capital management tools are the ones that let you schedule employee hours, approve leave, distribute salaries, and so on. There are more features that let you see the projects your staff is working on to allocate resources as required. 

3. Customer relationship management

There are ERPs systems that offer CRM functionality. Though they are not full-fledged, it would be helpful for companies that need only basic CRM functions. 

4. Inventory management

The common functions in inventory management are getting notifications when the stock levels are low and reordering items automatically. It is most often a part of distribution and manufacturing management. 

5. Supply chain management

Inventory management is a part of supply chain management, and there are other functions like managing purchase orders, monitoring quality, checking for compliance, etc. The capabilities of the software in this area vary from one vendor to another. 

Common Functions of CRM

The main purpose of a customer relationship management tool is to help you nurture leads and provide the best customer experience. Here is what you will normally find in most CRM software,

1. Contact management

This feature enables tracking and editing the customer details. It becomes easy to assign contacts of prospects to sales reps. You can monitor the role of the client in the buying process and store invoices, contracts, and other files. 

2. Client interaction tracking

With this tool, you can track previous client information and make further enhancements to the sales process. Reps can also choose to segment prospects based on various criteria.

3. Database management

This tool enables everyone in the organization to find the information they need from a central repository. They can use it for analysis and nurturing prospects. 

4. Marketing and campaign management

It makes it possible to find targets for campaigns and measure the performance of campaigns. Some CRM tools allow integration with email apps to make it easy to upload contact details and send marketing emails. 

5. Lead management

You can route leads gained from multiple sources and see how they move in the pipeline. This function makes it easy to assign leads to sales reps. 

Deciding whether you need a CRM or an ERP system

When choosing between a CRM and an ERP, you have to consider three main factors.

1. The needs of your business

While CRM and ERP are related and have a common aim of helping a business earn profit, they are a little different from each other. While CRM works towards boosting sales, ERP works at reducing the cost of making each sale. So, based on what you need for your business, you can choose between CRM and ERP.

2. The investment you are willing to make

The cost of a CRM system is less than that of an ERP system. An ERP is customized and needs plenty of technical expertise. Moreover, the infrastructure required to host the services on the cloud is sky-high. Together the labor, software, and hardware can be a costly affair.  So, you will be making a larger investment when you go for ERP.

On the other hand, when you go for a standalone CRM, a basic one can be free. But, if you choose a high-tech, feature-loaded one, t can cost you more than a thousand dollars a year. With CRM, there are always budget-friendly options that have enough features to offer.  So, you can choose between an ERP and a CRM based on your budget.

3. The scale of your business

CRM is beneficial for small and medium-sized organizations that are growing, and an increase in sales will help them. Conversely, ERP offers benefits to large organizations that can grow better when there is a reduction in overheads, and efficiency in processes can help them grow. Most large organizations use integrated CRM and ERP for the best of both worlds. 

Why do you need both CRM and ERP?

You have seen the factors that help you decide whether you need ERP or CRM for your business. However, there are several advantages of having an ERP system integrated with CRM functions apart from helping you stay updated & informed,

1. Better allocation of resources 

ERP integrated CRM systems help in bringing down costs and help earn more revenue from sales. The ERP helps reclaim the capital stuck in inefficient processes, and the CRM helps increase the profits. Both CRM and ERP, when combined, can direct capital to where there is maximum need. 

2. Improved access to information

It is possible to reduce the workload of all the organization’s employees with integrated ERP and CRM systems. From the HR department to the manufacturing department, employees know where to find information when needed. 

3. Increase in automation

With ERP-CRM systems, it is possible to automate tasks that you did manually. You need to make the settings, and the program will carry out the tasks. The software can take care of the most time-consuming tasks like recording customer transactions, generating reports, filling forms, checking stocks, etc. 

4. Better decision making

If you want to try selling your products to a new target market or make some other strategic change, using ERP-CRM systems makes it possible to improve decision-making abilities. The data-backed programming lets you test your decision and find whether your organization has the resources and processes to implement the change. 

Top CRM tools that boost sales

Now that you have an idea about ERP and CRM software, it is important to know about the popular customer relationship management software solutions used by most businesses,

1. Salesforce – Salesforce provides forecasts and makes it possible to get a complete view of your whole business.  

2. Pipedrive – With Pipedrive’s easy-to-use CRM solution, there are no more bulky systems.

3. Insightly – You can customize Insightly’s tool for all levels of users.

4. Keap – This one is for small businesses and lets you be free of repetitive tasks. 

5. Freshdesk – It combines CRM with automated helpdesk making it more effective.

6. Zoho CRM – It offers email integration to make your job easier and enables visitor tracking. 

7. Hubspot CRM – You can sync this CRM with an inbox and make it easy for you to make sales. 

8. Microsoft Dynamics 365 – Microsoft Dynamics helps predict customer needs with its digital intelligence. 

Top ERP tools for businesses

Here is a list of the top-rated ERP software solutions available for businesses,

1. Netsuite – This is the number one cloud ERP solution and offers everything you would ever need. 

2. SAP Business one – This ERP is the best bet for small businesses and helps them scale up. 

3. Acumatica – Another cloud ERP, it is the best choice for digitally strong companies. 

4. Oracle EBS – This one helps in managing the difficulties of global businesses well. 

5. Tally – Tally Prime takes care of each tiny detail and gives better results. 


CRM (customer relationship management) builds a strong relationship with prospects and customers over the long term. On the other hand, ERP (Enterprise resource planning) brings various departments of the organization together so that it is possible to share information between them in real-time from a centralized system. Both ERP and CRM have their benefits to offer to businesses and should be a part of organizations. 


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