What is the difference
between CRM and ERP?

A CRM and an ERP solution are similar in many ways, as both help a business in enhancing efficiency and maximizing profitability. In some infrastructures, these two systems overlap with each other extensively, while in some, they are even used in tandem with each other; but for a business weighing its options regarding the two, it’s best to review them as standalone applications.

CRM stands for customer relationship management which, in the most basic sense, provides businesses with a way to store, organize and track all the information regarding its customers. It can be used by sales, marketing, research and business development sections of a company throughout the life cycle of a customer. A CRM tool typically includes:

  • Marketing integration and automation: Be it managing prospective leads or sending email campaigns to various customer segments or analyzing results of a marketing campaign, a CRM lets you do it all.
  • Sales management and automation: A CRM gives you a real-time view of the contemporary sales pipeline and also lets you forecast sales.
  • Customer service automation: Some CRMs also provide IVR, call routing and call monitoring services.
  • Support desk automation: By offering self-service and ticketing features.
  • Reporting and dashboard: A CRM software also allows you to create insightful reports and a customizable dashboard where you can view important business metrics and statistics.

On the other hand, ERP stands for enterprise resource planning
, which is a technology that combines all the operational aspects of a business including customer relationship management, accounting, human resources and inventory etc. into a single software to provide a unified solution to businesses. Some vendors allow you to build your very own customized version of an ERP software while some provide different product options with varying feature sets. An ERP system usually consists of:

  • Accounting subsystem to handle financial transactions and invoicing etc.
  • Inventory: Real-time information regarding products and goods in stock.
  • CRM: ERP systems come with some of CRM features.
  • Manufacturing subsystem.
  • Business intelligence: Modern ERP systems also come with some business intelligence features.
  • Supply and delivery chain subsystem.

Most of the time, an ERP system includes a CRM but it doesn’t include some of the supplementary features that modern CRM have, including analytics, reporting and customizable dashboards. If you are not sure about the technology you should buy for your business, ask yourself this question: “Is my workforce happy with most of the enterprise solutions including accounting, HR and supply chain?” If the answer is “Yes”, then all you need is a new CRM software. However, if the answer is “no” then it’s better to go for a customizable ERP system that covers most of the needs of your business. If your ERP system lacks some of the features that you believe a CRM should have, then you can buy a CRM as well (if the budget allows) because most of the modern ERP systems integrate seamlessly with CRM systems.