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As more and more small businesses take on ERP for their day-to-day operations, the competition between CRM systems is becoming increasingly fierce. Companies are choosing to implement either platform as a way of improving user experience and increasing productivity among employees. However, with new features coming out each week it can be difficult to figure out which system would best suit your company’s needs.
ERP stands for Enterprise Resource Planning, CRM stands for Customer Relationship Management, and SCM stands for Supply Chain Management. Each of these 3 software systems has their own advantages and disadvantages.
Finance, human resources, inventory, and supply chain management are all centralized by enterprise resource planning (ERP) software. ERPs are thus more reliable than customer relationship management (CRM) software, which assists firms in managing contact interactions and transactions. We compare ERP versus CRM systems in this post by detailing their different target users, common features, and best examples to help you figure out which one is right for your company.
Who Uses a CRM System vs. an ERP System?
ERP systems are mostly used by medium to big businesses with complicated accounting procedures that need a centralized tool to manage their company operations and increase efficiency. Business processes from supply chains, manufacturing, and human resources are among them (HR). Financial management, accounting, order management, reporting, manufacturing, and CRM features are often included in this kind of system.
CRM systems, on the other hand, are often utilized by small to medium-sized organizations and micro-enterprises that wish to enhance customer connections and income by simplifying sales procedures. This software often contains capabilities for maintaining contacts, conversations, and documents, as well as tools for automating sales, marketing, and service activities.
Given the description of their respective core characteristics listed above, one major distinction between ERP and CRM systems is their simplicity of use. ERPs are also more powerful than CRMs due to their broader area of functionality, which makes them more costly.
When Should You Get an ERP?
ERP systems are used to handle a company or organization’s front- and back-office functions. If you require a software to combine numerous company operations and enhance internal communication systems and data sharing, you should utilize an ERP. Many systems may be customized to include modules that cater to unique company requirements.
If you wish to consolidate all of the following business processes, consider adopting an ERP:
- Financial management aids in the planning, organization, and determination of the optimum use of your company’s cash, as well as the control of operational and financial risks.
- Accounting: Accounts receivable, budgets, and the general ledger are examples of financial data that are tracked, stored, and analyzed.
- Human resource management (HRM) is in charge of payroll, hiring, onboarding, compensation administration, and timekeeping, among other things.
- Order management: Tracks orders from reception through delivery to ensure that they are not lost, that delivery rates are improved, and that customers are satisfied.
- Manufacturing: Assists with product planning, monitoring, and forecasting, as well as obtaining raw materials for the company.
- Reporting and analytics: Gathers data on corporate activities and creates visual reports for internal usage, audit trails, and regulatory compliance.
- CRM: Automates sales and marketing activities by storing and organizing customer relationship data in a single database.
The number and types of modules offered in ERP software vary by vendor, however finance and accounting modules are usually included in basic packages. Purchasing, inventory management, supply chain management, project management, labor management, ecommerce, and marketing automation are some of the other modules that might be sold individually.
When Should You Get a CRM?
CRM software aids firms in the management of leads, customers, and transactions. If you need a tool to expedite sales and customer interaction, generate income, and enhance customer happiness, a CRM is the way to go. It also has reporting and analytics features that give summaries of sales numbers, performance, and trends.
If you wish to do the following, CRM software is a better alternative than maintaining deals on a spreadsheet for most small businesses:
- Sales automation automates routine administrative stages in the sales process, freeing up your sales staff to concentrate on client interactions and sales.
- Marketing automation helps you nurture leads and expand your company by automating email marketing campaigns, processes, social media content, and other marketing chores.
- Customer service automation decreases human work significantly, improving customer satisfaction and lowering labor expenses.
- Data warehousing is the process of collecting data from numerous sources and storing it in a single place.
- Data mining is the process of analyzing and interpreting stored data in order to find trends and patterns that may be used to improve sales, marketing, and customer service initiatives.
- CRM forecasting capabilities are provided by online analytical processing (OLAP), which allows you to make data-driven business choices.
- Interaction management: Maintains a consolidated database of your customers’ interactions with your firm.
- Customer involvement is tracked, and contact with them is streamlined via their chosen channels.
- Captures, tracks, saves, and enables the exchange of your company’s electronic documents using document management.
What if I told you that Some CRM platforms contain features like as digital signatures, configure, price, and quote (CPQ), HR operations, and financial administration that are often found in ERP systems. These features are either included in their plans or are available as add-ons via a third-party integration. Small firms may increase their CRM’s capabilities more affordably with add-on features and connectors rather than upgrading to an ERP system.
Read our post on CRM types if you want to learn more about the key features and advantages of CRM.
How ERP & CRM Software Work Together
While this may be an ERP vs. CRM debate, keep in mind that both aid in company development and profitability. Both systems use relational databases to store and analyze data. These two are often offered through software as a service (SaaS) or cloud-based methods, however some are still delivered via the conventional on-premises format.
Maintaining two different applications is far more costly than having an ERP system with a built-in CRM. It also promotes improved staff cooperation and expedited contract approval. For example, a company’s finance department need access to the CRM system in order to compute sales reps’ compensation.
It’s worth mentioning, however, that although most ERP systems have a CRM module as a feature, you don’t have to utilize an ERP to acquire additional capability. Another distinction between ERP and CRM systems is this. Freshsales, for example, is a standalone CRM that may be enhanced by connecting with more entry-level and user-friendly accounting systems like QuickBooks.
ERP Pricing & Top Providers
The finest ERP vendors provide packages that can handle all of your company activities from a single platform and can be customized to meet an organization’s industry-specific needs. All team members and departments may access real-time data from a single database with an effective ERP system. Here are a some of our top ERP recommendations:
*Based on a yearly billing cycle. Monthly rates are also available at a little greater cost.
According to the Software Path 2022 ERP Software Project Report, the average per-user cost of an ERP project for small businesses is $8,571, $9,000 for medium businesses, and $11,000 for businesses with more than 500 workers. These values represent the five-year expected cost of ownership of a new system.
CRM Pricing & Top Providers
The finest CRM software for small companies is simple to use and has reasonable price. Contact and sales management, reporting, and email automation are all included. Here are some of our top small company recommendations:
*Based on a yearly billing cycle. Monthly rates are also available at a little greater cost.
Conclusion
Because the target users and scope of functions of these two systems vary, there is no clear victor in the ERP versus CRM comparison. For conducting the business operations of high-growth medium to big businesses, an ERP is suggested. For smaller businesses, a standalone CRM is preferable since it solves the sales, marketing, and service automation requirements needed to build customer connections and expand the company.
Consider Freshsales if you need a full-featured CRM with free and simple contact management features. You may also combine this solution with your preferred ERP program. Start for free or sign up for a free 21-day trial to learn more about the features and advantages.
Freshsales is a great place to start.
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CRM is part of ERP. CRM is a type of software that helps companies manage their customer relationships, while ERP is a type of software that manages the business processes and operations for a company. Reference: is crm part of erp.
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