ERP vs CRM – Common Difference between ERP and CRM

Which option do you consider while shopping for the software solution?

CRM software or ERP software?

Both are meant to improve productivity, enhance the revenue and focus on automation.

But, there are many elements where they varied and integrated. Even though some core functionalities differentiate them, it is better to check them out as a stand-alone and separate system. 

To make it clear to you, here in this article, we are presenting the difference between CRM or ERP software. 

Therefore, it is better to switch to our aim behind this piece of knowledge now!!

Common History

The concept and idea of CRM came into existence in the 1970s. In that era, the technology has restricted the company to an autonomous mainframe system to automate sales and ultimately classify customers in electronic forms.

ERP was traced back in the 1990s, however, the system has already developed its own roots in the form of Material Requirement Planning (MRP) which was coined in the 1970s. 

With the commencement of the server/client architecture or Personal Computer (PC) has resulted in the development of software for controlling and managing the business regular tasks. And, then, the first management system was launched for managing the contacts.

The ERP and CRM are categorized in the mid-1990. At that time, the companies started to prioritize the investment in the software as per their requirements, like, shipping, product production, planning, customer service, marketing, and customer service.

CRM system- Defined

Customer Relationship Management is the system which is employed to record and save every single information according to the company’s customer communications. It offers a regulated system which can gather and share the customer information and also record the customer communications. 

Suppose you have a salon then Salon CRM software assists you to book the customers appointments, manage inventory, monitor Salon’s reports and analytics, staff performance, etc.

The regulated data gets shared in the company and generates the essential view of the customer relationships. This could be considered by the management to generate the sales reports or analytics or sales representatives who can manage the close relation with the customers. 

It can be said that the CRM is used for providing an all-inclusive inventory of the customer information that eventually increases the customer loyalty, boosts the sales, and ultimately, accelerates and maintains the customer’s relationship with the company. 

ERP system- Defined

As the CRM software works exclusively for the customers, the Enterprise Resource Planning (ERP), on the other hand, centralizes its attention on the whole company to streamline and improve the process. Briefly, the CRM is customer-oriented software whereas, the ERP is business-oriented software.

Though, these systems allow sharing the standardized details in every company department quickly and enable the employees and the management to use the details and put in the system, and make a comprehensive and updated sketch of the company.

Accordingly, every department in the company at an initial stage can examine the issues in other departments and map the plan beforehand any problem occurs in their department. It can also be said that the ERP system envisions the data of the company and is a practical way to streamline the business methods for every company unit and department.

Generally, ERP software is a comprehensive and powerful system that handles every aspect of company operations.

CRM vs ERP – Features

The CRM and ERP features are more comprehensive, considering an entire business.

As you can check in the features defined below, the ERP features are divided into multiple areas, while the features of CRM are mainly related to sales and marketing.

ERP Features

  • Payroll
  • Supply chain management
  • Manage human resources
  • Distribution process management
  • Services knowledge base
  • Promote better project planning
  • Enhance the accuracy of financial data
  • Automate employee life-cycle
  • Lessen redundant tasks
  • Less purchasing costs
  • Standardize crucial business procedures
  • Financial and accounting applications
  • Assess business requirements

CRM Features

  • Streamline the sales methods
  • Automates customer service
  • Generate data reports
  • Prioritize leads
  • Collaborate to sell as a team
  • Share customer profiles with co-workers
  • Know from where leads are coming
  • Watch the sales pipeline
  • Organize marketing efforts
  • Measure the time spent on transforming leads to closing deals
  • Follow a customer’s interactions with the business
  • Share sales and marketing collateral
  • Determine what products sell better and when
  • Manage inventory as per traditional sales data
  • Maintain the business contacts
  • Maintain the business leads

Main Differences: CRM Vs ERP 

When it is about choosing between ERP or CRM, it is essential to look after the difference between the two. 

On the one hand, ERP can promote business methods in several various workflows, which means that if you want to spend in systems that serve warehouses, finance, and different operations, then ERP could be the right choice.

On the contrary, CRM is a more customized solution. Certainly, several ERP solutions like CRM features which are readily available or simply added as modules, however, CRM includes more customer-related functions than ERP software packages.

Conclusively, the main distinction among them lies in scope. In the struggle to choose CRM or ERP, you must fully understand the requirements of the company and learn the features that your solution specifically needs.

CRM Vs ERP – Licensing Costs and Price 

In most of the cases, the ERP Software is costlier than the CRM system. The reason behind this lies in the services given by both software types. 

The ERP Software is more customized and hence, needs significant technical expertise to outline, design, include and implement. In the same fashion, the infrastructure required for hosting several services on the cloud; it could also be a costlier thing.

The hardware, software and labour could be millions of dollars. Besides, there are many small business oriented and cloud-based ERP products that could come in the range of $79 per month and $799 per month without any substantial development expense.

One of the essential things about Microsoft Dynamics lies in its scalability; it makes it easier to use it when the business grows. 

But, when it is about the Standalone CRM Software, you can get it free, or you need to pay thousands of dollars yearly as per the several factors; like feature types, flexibility in customization, user count, and if the software is cloud-based or on-premises. 

In addition, with the difference in ERP costs, the CRM costs are economical. Small businesses can usually get non-enterprise and feature-rich level CRMs, with a monthly price of US$20 to US$80 every user (not a certain range).

For instance, you can make extensive use of the application to further create and support customer relations from Microsoft Dynamics, at a cost of up to $115 per user every month. On the contrary, with Microsoft Dynamics, you can make complete use of applications to link and control the complete business plan, at a cost of up to $190 per user every month.

Various pathways to business processes

CRM and ERP software enhance the effectiveness of the business processes. However, ERP systems are more inclined towards lessening the cost by converting the business process more effectively. The central repositories are provided by both systems.

Even then, the CRM software operates perfectly as the facilitator of more sales volume and as an enhancement in the customer interactions. Despite the business size, the deployment of either ERP or CRM software is better than finding the customer information from the instant chats, handwritten notes and chains.

As each business requires optimization of the customer relations, hence, the customer relationship management assists in assuring customer loyalty and satisfaction. Using the ERP system, each department comprehends the workflow with the different departments.

The administrators can also have a real-time overview of all the departments. It is very essential for those companies who like to grow and those who are growing. 

Concluding Remarks

Both ERP and CRM software are powerful tools for revenue optimization. Even though the main purpose of serving differentiates.  

ERP is an all-inclusive solution that handles the back and front office operations. On the other hand, the CRM, generally aims in handling customer relationships, marketing and sales. 

Choosing the right one highly depends on the amount of investment and the scope of the requirements that you want to make.

So, which one you think is the best one?

What about the merits and the demerits of the customer relationship management and enterprise resource planning system?

Do share your views with us!! Also, if you have some query or suggestion then, let us know in the comment section below.

Thanks for reading!!

Zin Lang Liu

Zin Lang Liu is associated with Salonist, a salon appointment booking software for all types of beauty industries. She assists business owners in how to grow their business through fully featured software.