Difference between ERP and CRM

Difference between ERP and CRM:-

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.

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.

CRM is a system for recording and storing all information related to customer interactions. ERP focuses on reducing overhead and cutting costs. By making business processes more efficient, ERP reduces the amount of capital spent on those processes. Where CRM is focused on the customer, ERP focuses on the business.

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.

Deciding which system is more important is like deciding between having an engine and 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.

A business has to have processes before it needs to worry about streamlining them. And it needs to have profits before worrying about cutting costs. The most streamlined, efficient business in the world is still bankrupt without sales. That’s why CRM is often the best bet for a business’s first investment. Generating and maintaining sales is usually what makes everything else possible. By helping to maximize sales figures, CRM can enable a business grow to the point that ERP becomes a necessity.

Increased capital comes about in two ways: more sales or fewer expenses. Using ERP and CRM systems allows a business to pursue both of these avenues. The CRM system brings in more revenue through better sales figures, while the ERP system reduces overall operating expenses. Together, these systems can help a business pursue growth through efficiency and expansion simultaneously. Used separately, ERP and CRM can still be very helpful, but could potentially limit the business to a narrower avenue of growth.


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