ERP vs. CRM the difference

strengths and weaknesses

Freddy Czaja

ERP and CRM software help companies to work effectively. The goal is the optimized control of business and operational processes, by mapping and simplifying processes, networked information and the documentation of facts and data. However, ERP and CRM software have different approaches, which is why they are mapped into two different types of software. Nonetheless, both softwares mesh and complement each other. In this article we want to define the differences, explain the strengths of the software and explain why ERP and CRM in a software is the best solution.

The difference between ERP & CRM summarized

An ERP should save costs, and focuses on the business processes of a company. The CRM serves the communication and interaction with the customers and is generally intended to increase the sales and the service. In the following paragraphs you will find a more detailed description.

ERP

Enterprise-resource-planning-software is used in almost all business areas. These include: Materials Management (Purchase, Warehousing, Sales), Human Resources, finance management, production (production planning) or vehicle management or expense management.

The aim of an ERP (Enterprise Resource Planning) is to plan and control resources on time and according to demand, thereby optimizing the business and operational processes.

In production this means that all materials are available at the right time so that production does not stop. It is important to avoid overcapacity so as not to unnecessarily tie up capital. In Finance and Warehouse Management, this means that all purchases and sales are automatically posted to have real time data of capital and material available at all times.

One of the strengths of the ERP system is the ability to connect the different parts of the business (one database) and, when changing a data set, to update all other parts of the ERP in real time.

In summary, one can say that an ERP has the task to map and control business processes and to use resources such as capital, time and personnel efficiently.

CRM

A customer-relationship-management-software is used to communicate with customers in a targeted manner. It helps customers win (leads), retain customers and increase customer satisfaction. In summary: a CRM increases the chance to sell products & services. The most important task is to document all contact points and information about customers in order to enable a more precise communication with the customer.

The entire customer relationship management is subordinate to the marketing and sales area. It is subdivided into analytical, operational and communicative areas. Analytical means that new data are gained from new data, products or simply new insights. Operational means that information obtained through analytic CRM is used to turn prospects into customers or to offer customers additional products, etc. Communicative CRM means that different communication channels (telephone, internet, e-mail, etc.) are provided and synchronized between customer and company work.

Example: A potential customer sends a product request to a company. In CRM, the information about the customer and the request is now documented and assigned to a salesperson with an appointment. The seller now contacts the customer, documents the new information in CRM, creates an offer (or a new appointment) in CRM and sends it off. After accepting the quotation, the quotation becomes an order, which then automatically (ideally) can be found in the ERP area Sales.

Advantage: Even if sellers change or a service employee has an appointment with the customer, he can access the uniform CRM database and offer a good personal customer service.

Much stronger together

Already, many ERPs have an integrated CRM, as the manufacturers and their customers have realized that this saves costs and offers real added value. So, what is the advantage of ERP and CRM in one system? Advantages include the common database, avoidance of redundant data, time savings when maintaining data, one user interface, reduction of IT costs, specialization in a system.

About Freddy Czaja

SEO is the air he breaths. If it has a bit of Oxygen, he doesn't care/ He likes his coffee black and cold.