Wondering what ERP and CRM set apart? In this article, we put head-to-head ERP vs CRM and what makes them unique, why companies are choosing them, and how you can select which system is the right for you.
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Enterprise Resource Planning (ERP) is a type of software used by companies of all sizes to integrate core parts of their business processes. Connecting business processes allows companies to streamline their processes and data across organizations, gaining better visibility and improving reporting and decision making. It enables automation and improves business processes resulting in increase productivity and saving costs.
ERP software is mainly focusing on back-end departments and processes of a business such as:
Since digitalization is a big part of every industry, ERP strategy became at the heart of every company’s digital transformation regardless of the size and industry of a company.
And because ERP system can connect your business core process, it brings many benefits for your company. The primary benefits of implementing a robust ERP system are:
Of course, the benefits largely depend on the type of the ERP module and the type of module you decide to implement for your business.
Customer Relationship Management (CRM) is a type of software that is collecting data and manages all your company’s interactions and relationships with customers and potential customers across digital and non-digital channels in order to improve customer experiences, drive better marketing results, sales growth, and provide more personalized and better customer service.
CRM System is focusing on the front-end part of your business such as:
CRM collects, connects, and analyzes all your customer data to give you insights into how your prospects and customers interact with your brand. The usual channels or points of contact that CRM collects data from are our websites, live chat, emails, phones, advertising, analytics, virtual and even physical meetings.
CRM systems offer numerous major benefits for companies and in many cases, it is a company’s first big investment in order to improve company outcomes and manage growth.
With that, let me share with you some of the most profound CRM system benefits:
ERP and CRM systems are focused on different parts of your business to increase profitability. As said, ERP system is focusing on the back end of your business, helping you improve business processes and reduce CAPEX and OPEX on those processes, while CRM is purely focused on increasing the profitability of a company by improving sales, marketing, and customer service.
And despite many ERP systems that come with CRM capabilities, but a CRM system provides far more features and functionalities than what’s included in an ERP system.
However, let’s have a look at the four major differences between ERP and CRM systems:
The first main difference between ERP and CRM systems is the focus on users.
ERP system is mainly focusing on users across departments such as finance and accounting, purchasing, supply chain, procurement, manufacturing, operations, and human resources. Any back-end activities your business performs will most likely be done using an ERP system.
CRM system is focusing on users across departments such as sales, marketing, field service/technicians, and customer service. Any front-end business activities regarding your employees interacting with customers and acquiring customers will be handled with help of using a CRM system.
Another main difference between CRM and ERP systems is their focus on business processes.
ERP system manages the following back end activities:
And any other related back-end activities your business performs.
CRM system manages the following front-end activities:
And any other related front-end activities your business performs.
ERP and CRM systems are both robust technologies pack with full of features and capabilities that can benefit your business.
And as mentioned both of these business softwares are focused on different aspects and processes of your business.
The core functions that most ERP systems provide are:
The core functions that most CRM systems provide are:
Of course, both of these software’s provide their reporting and analytics that are based on the data they collect. The same applies to automation and workflows, the functions are different based on the business processes you are going to automate.
Both of the systems have their benefits and most of the businesses will see improvements in their business processes using either of those.
Also, most likely larger companies will have both of these tools implemented. However, certain industries are more prone and benefit by using ERP or CRM systems just based on the daily processes.
For example, if your company is mainly focusing on client work, managing customers, then CRM will be more beneficial to you, but if your business is more based on managing your resources, money, and assets, then ERP would be a better choice for you.
So, here are some of the industries that benefit from using ERP or CRM systems:
Please note, this is only for information purposes and it ultimately depends on your business processes, needs, and challenges. Does it mean, that the service industry never uses ERP? Of course not, it’s usually at the later stage, as the business grows, they will need an ERP system to manage their back-end processes as well.
That same applies to manufacturing, usually, ERP is their first choice, just because their processes are heavily based on back-end activities, but as they grow, CRM will be necessary to effectively manage their growing clientele. So please, take this with pinch of salt.
Both of these business applications are made to collect data from your employees, third-party apps, and different sources to give you a better view of your business. Also, they help you to organize and clean your data, remove any duplicates and human errors.
They also help to standardize your data management and business processes to ensure everybody inserts data in the right format and follows your business processes.
Another similarity ERP and CRM have in common is their automation and streamlining capabilities. Both of these tools help respective departments to automate manual and repetitive tasks and streamline processes and collaboration in order to increase business efficiencies, productivity and improve business outcomes.
Both ERP and CRM also provide reporting and analytics reporting tools to give you insights based on your collected data to help you make better-informed decisions.
And lastly, both of these tools can be implemented on-premises or as cloud base solution, where the provider manages the server, security, uptime, and infrastructure.
Now when you understand the differences between ERP and CRM, you probably can clearly see why they are so important for businesses and why integrating ERP with CRM can benefit your company.
Integrating your front and back-end activities helps you to streamline your processes across the entire operation and increase your productivity. It empowers your employees to collaborate more effectively and ultimately speak the same “language” in terms of your data management.
Integrating your ERP and CRM system helps you to get a 360-degree view of your business which can result in better budgeting and forecasting, improved customer service, a more personalized customer experience, and a better understanding of your business progress.
In the end, every activity that’s taken by the front-end team has to be recorded by the back-end team, therefore, having these two systems seamlessly integrated will benefit your company the most.
ERP and CRM systems are some of the most popular business applications in today’s digital world and businesses are taking big initiative towards these technologies to enable more flexible operations.
Regardless of which solution you choose first, they both will have an impact on your business success and performance.
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Microsoft Dynamics 365 ERP Applications are standalone business apps that allow you to improve financial dexterity, operational proficiency, and project-centric services success so you can unlock the insights needed to adapt faster, work smarter, and perform better.
Dynamics 365 Business Central is an all-in-one enterprise resource management System for Small-Medium Size Businesses to centralize, simplify and automate your business processes across Finance, Supply Chain, Sales, Customer Service, Manufacturing, and Projects.
Dynamics 365 Commerce empowers your business to deliver unified, personalized, and seamless buying experiences for customers and partners. Unify back-office, in-store, e-commerce, and call center experience to increase productivity and optimize store operations.
Dynamics 365 Project Operations get the visibility, collaboration, and agility needed for your project-centric business. Empower your teams to win more contracts, optimize resource utilization, accelerate project delivery, and get business insights from sales to project financials.
Dynamics 365 Finance automates, simplify and centralizes your global financial operations, maximizes financial visibility and profitability and monitors global financial operations in real-time, predicts outcomes, and makes data-driven decisions to drive business agility and growth.
Dynamics 365 Project Operations get the visibility, collaboration, and agility needed for your project-centric business. Empower your teams to win more contracts, optimize resource utilization, accelerate project delivery, and get business insights from sales to project financials.
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