Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) are two sides of the same profitability coin. ERP and CRM are similar in many ways, as they are both used to increase the overall profitability of a business.
ERP is category of business-management software suite of integrated applications that an organization can use to collect, store, manage and interpret data from these many business activities.
These systems overlap in some areas, and can be completely integrated in others. However, as their core functionalities are completely different, it’s best for a business to first look at them as separate, stand-alone systems. When viewed separately, it’s easier to see how ERP and CRM each play a role in improving efficiency and increasing sales.
ERP is category of business-management software suite of integrated applications that an organization can use to collect, store, manage and interpret data from these many business activities. Enterprise resource planning Software automates and integrates core business processes such as taking customer orders, scheduling operations, and keeping inventory records and financial data.
Though similar in effect, ERP and CRM systems use different approaches to increase profits. ERP focuses on reducing overhead and cutting costs. By making business processes more efficient, ERP reduces the amount of capital spent on those processes. CRM works to increase profits by producing greater sales volume. With a standardized repository of customer data, it’s easier for everyone, from executives to sales reps, to improve customer relations. In turn, those improved relations translate into increased brand loyalty and profits.
Whether a business needs both systems largely depends on the size and complexity of the business. Even for a small business, a CRM system is better than a haphazard collection of customer data stored on hand-written notes, in numerous emails, or, worse yet, contained solely in the head of a sales rep. Customer relations are the lifeblood of any business—CRM exists to keep that blood pumping freely.
Deciding which system is more important is like deciding between having an engine or having a steering wheel in a car. CRM is the engine that drives a business. It improves sales and increases profits. ERP is the steering wheel it allows a business to be guided with precision, and to steer around obstacles well in advance. ERP and CRM working together make it much easier for a business to increase profits while reducing costs.