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ERP vs. CRM: Understand the differences and benefits

ERP and CRM technology can transform the efficiency and profitability of a business. However, both perform different functions as this post explains.

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ERP and CRM technology comprise two key software solutions that enable businesses to automate core business processes. In order to choose the right solution for your organization, it’s important to understand the primary differences and benefits of each system. 

What is ERP?

Enterprise resource planning (ERP) is a type of software that streamlines core business functions. ERP systems allow users to manage supply chain, manufacturing, customer service, human resources, and any other areas of business in one central system. The goal of an ERP solution is to give organizations access to real-time data that they can use to make better-informed decisions as well as track overall effectiveness and profitability.

There are two primary types of ERP: on-premises and cloud-based. On-premises ERP systems are locally deployed and, therefore, run on in-house servers that are maintained by your organization’s IT team. Cloud-based ERP software is hosted online in the cloud by your ERP provider.

ERP Benefits

  • Scalability: A robust ERP solution is scalable and flexible, enabling users to configure the system to suit their unique and evolving business needs. This ensures that your ERP system is future-proof and will continue to grow alongside your organization. Cloud-based ERP systems offer multi-device workload security and scalability as teams increase in size, providing a high level of access and flexibility to allow your business to adapt to a changing environment.
  • Increased efficiency: Business processes like accounting, sales, production, inventory, and more are integrated into one platform, increasing efficiency throughout the organization.
  • Real-time data: ERP solutions guarantee that all your business data is available and easy to access in real-time. This ensures that you have complete visibility and can stay on top of trends or changes. Real-time data can also help businesses maintain high-quality customer service through a complete and up-to-date picture of critical areas such as available inventory.
  • Reduced costs: By streamlining processes and closely monitoring key metrics with ERP, you can better manage their impact on your organization. Not only does an ERP solution reduce operating costs by optimizing business functionality, but real-time data and increased visibility also provide more control over profitability.

What is CRM?

Customer relationship management (CRM) software enables businesses to build better customer relationships by collecting data on customer interactions, order history and sales leads. A CRM solution also consolidates all customer communications – such as forms, quotes, emails, and calls – into one platform.

CRM Benefits

  • Enhanced customer experience: One of the most obvious benefits of any CRM platform is an enhanced customer experience. By aggregating customer data and insights, your team can better understand each customer. Easy access to this vital information allows all staff to build better, more informed relationships. A CRM can also analyze customer data to help businesses react to and capitalize on trends in customer behavior.
  • Improved sales process: With CRM technology, everyone in an organization can quickly access important customer information at the right time. This data can help businesses close more sales by ensuring sales teams are well-prepared in addition to facilitating faster internal and external communication.
  • Lead generation: A good CRM automatically generates leads from website traffic, incoming calls, form fills, social media, or other methods. Following the initial lead, you can use CRM technology to follow up and guide users through the sales pipeline.
  • Minimize the risk of losing clients: Without a proper CRM platform, clients may only form relationships with one or two employees. If these team members leave the business, you risk also losing the client or decreasing the quality of service for this customer. By storing a complete history of all customer interactions, every member of the business can remain knowledgeable about customer history and build meaningful relationships.
  • Automate segmentation and processes: Increase efficiency in your operation by using a CRM to automate various processes. CRM software can automate messages, follow-up tasks, quotes, lead capture, and more so that you can be confident that your business is keeping accurate, up-to-date records. This automation also decreases manual error and redundancies by avoiding repeat interactions, freeing up staff to focus on delivering the best service possible. Many CRM solutions also automatically segment audiences to help you better target marketing campaigns and send personalized messages to the right clients at the right time.

ERP vs. CRM: Key differences

While ERP and CRM software both aim to improve efficiency, automate processes and boost profitability, there are several key differences between the two solutions.

ERP software mainly deals with back-end processes in warehouse management, financials, supply chain, purchasing, and more. ERPs support these back-office functions to optimize areas like HR, accounting, or procurement. On the other hand, CRM supports front-end functions like sales, marketing, and customer service.

Most ERPs incorporate CRM elements, but CRMs are limited to processing customer data and won’t manage the type of functions found in back-office processes. Both types of software are integral components of successful business management, but one doesn’t replace the other. Therefore, implementing a system that integrates both ERP and CRM is an excellent option for businesses looking to harness the benefits of both solutions.

Choosing the right solution for your business

A proper ERP system will include features of CRM and enable businesses to improve customer service. While CRM is a key component of ERP, a separate CRM platform is required for organizations to enjoy complete functionality.

The type of software your business needs depends on which areas require the most growth. If you struggle with a high customer churn rate, weak marketing strategies, or difficulty keeping track of customer information, a CRM solution may be necessary for your business. CRM software is essential for organizations with complex customer relationships and a broad customer base.

Many businesses choose an ERP system that integrates with CRM to provide comprehensive management. Kerridge Commercial Systems offers both cloud-based and on-premises ERP software that seamlessly integrates with our CRM solution. This integration gives businesses the functionality they need to streamline their operations while effectively managing customers – whether they’re retailers, suppliers, dealers, or consumers. KCS’s CRM platform collects and stores every piece of information, from contact details and order history to quotes and sales calls.

Whether you’re a large organization with countless contacts or a small business with a limited number of customers, KCS’s ERP technology enables you to manage every facet of your operations. Enjoy all this functionality and more in our innovative and scalable ERP software, which integrates seamlessly with our CRM software to further streamline business processes.

Contact us or request a demo today to learn more about our innovative ERP technology and robust CRM integration.

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