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CRM vs ERP: Which One Do You Need?

CRM vs ERP is a topic worth exploring if you want to find the best solution that can take your business further.

Dan Duran · January 30, 2023
CRM vs ERP: Which One Do You Need?

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Businesses and organizations looking for software solutions to automate their processes often explore CRM and ERP systems – two of today’s most widely used types of software. It may be challenging to choose between the two while considering your business size, nature and needs. It’s worth finding out about the differences between a CRM and an ERP system, especially if you want to find the best solution that can take your business to greater heights.

In this article, we explore the difference between ERP and CRM to help you understand how each system works and which solution is right for you.

CRM vs ERP: definition

ERP stands for enterprise resource planning, while CRM stands for customer relationship management. CRM is mainly used by the marketing, advertising, sales and customer service side of a business. ERP meanwhile focuses on the entire back-end operations of a business — the day-to-day operations like accounting, supply chain management and project management.

Some features of both software solutions may overlap since both can aim to make a business more successful through automation. In some cases, both of the systems can handle finances, projects, forecasts, contacts and more. This can make it challenging for businesses to pick between CRM and ERP, but understanding the core purpose and features can help you make the right decision.

CRM vs ERP: target operations and implementation

A CRM ensures that all customer needs are being satisfied by the company, improving overall customer satisfaction with every interaction at every level of the organization. ERP targets all operational aspects of the entire business to simplify your processes, increase productivity and reduce your business costs. It’s safe to say that ERP is all about making business operations seamless, while CRM is more about making customers happy and closing opportunities.

Both have their own identifying features to help businesses reach their goals.

Main Features of a CRM

Main features of an ERP

How to Decide Between a CRM and an ERP System

Your company should create a clear brief and decide based on the features and functionalities it needs. Before you decide, you must first answer the following questions:

  • What are your current business needs?
  • What are your business goals?
  • What are your short-term and long-term business strategies
  • What is your budget?
  • How big is your business?
  • What is the nature of your business?

As you answer these questions, keep in mind the difference between an ERP and a CRM.

A CRM is the main tool for sales representatives targeting customer relationship management, but it can also include features that can be used by marketers or employees who want a tool for project management. If you fully focus on getting leads, boosting sales, and building customer relationships, a CRM is a good software solution for you.

An ERP is for every business process that happens behind the scenes—all the aspects that affect your business but the customers don't see. If you want to fully focus on supply chain management, inventory management, human resource management and order tracking, an ERP is a good standalone software solution for your business.

The decision to invest in an ERP or CRM depends on the needs and problem areas of your business. In addition, you should also consider the size and organizational structure of your business.

Can CRM and ERP Work Together?

ERP and CRM systems are not mutually exclusive. CRM vs ERP can actually be CRM and ERP. You can actually use both if you think it’s necessary for the improvement of your business performance. Using both a CRM and ERP for your business, especially for day-to-day operations, can offer a lot of benefits. If you can’t decide which of the two to prioritise or you need the individual features of both software solutions, then it might be a good idea to combine both in your business operations. Many companies have a CRM that is fully integrated with an ERP.

Here are some of the benefits you can get by using both CRM and ERP:

  1. More Integrations
    The combination of a CRM and ERP will allow you to integrate more data, features, and third-party integrations. This beats the third-party software support limitation between the two solutions.

  2. Improved Sales Processes
    CRMs, with their features related to sales pipeline and sales management, can assist with the production planning ERPs handle. You can solve issues raised by customers regarding your products as your ERP can alert your CRM regarding inventory problems, product shortages, shipping issues and more.

  3. Avoid Data Duplication, Improve Data Sharing
    With the power across the two solutions, all departments in your company can now have a centralized system with better data gathering, storing and sharing features and more accurate information. Having a CRM with integrated ERP (or vice versa) can avoid content duplication and improve collaboration within workflows.

  4. Accurate Quoting
    With an ERP, your sales department can have real-time access to your inventory and product information to offer more accurate quotes, shipping times and production schedule. Combined with a CRM, you can build more loyal customers as you’ll improve consistency and accuracy when delivering your products and services.

  5. Improve Forecasting
    With both solutions at your fingertips, you can improve your business forecasting and make use of better business planning. Data is power, and the more data you have, the better. You can easily prevent shortages and excess in your inventory, gather more business trends, and improve customer satisfaction.

  6. Better Workforce
    A CRM combined with an ERP can definitely empower your workforce, provided they have proper training. Your employees will have access to tools that can automate their work and make other tasks much easier to handle. When employees throughout your organization have better tools and resources, they work better. You can then improve employee productivity, performance and consistency.

Start your Journey

The success of your business doesn't only depend on the software solutions you use. So, regardless of whether you use a CRM or an ERP, your business should still focus on the tangibles — its employees, products or services, and customers. Use CRMs and ERPs as solutions to improve your business processes at key points of your journey.

If you’re just getting started with CRM and ERP, start your journey with Capsule CRM. It can help improve your customer relationships as well as your business processes.


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