What is the difference between ERP and CRM?

There are two things that are absolutely necessary for a business to earn profits, one is Enterprise Resource Planning (ERP) and the second is Customer Relationship Management (CRM). They both are considered similar as they both help in contributing to the profit increase of the business. But, it is not entirely true that they are similar as there are few aspects in which they are similar but they vary in few other aspects. But, in both CRM and ERP, their core functionalities are entirely different from each other it is best to view them separately.

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CRM is a system which is utilized to maintain customer relations. It stores all the data related to customers and customer interaction. Some CRM systems are Salesforce and Microsoft Dynamics CRM. These CRM solutions help to collect customer data, share customer data and maintain records of previous customer interactions with the company in a standardized manner and this standardized data can be easily circulated within the company. The CRM can be used by the sales force to estimate sales projections, to contact the clients, to create invoices etc. They act like a store for storing all the customer data and can be utilized to increase sales, improve customer retention and help manage customer relations more smoothly.

ERP on the other hand focusses on the business and not the customers. It helps to improve the efficiency of the business by proper planning and then execution. The similarity between the two is that both ERP and CRM help in providing standardized data throughout the organization. All employees such as executives, managers etc. enter data into ERP which helps the entire get the required data in one place. If any problem arises in one department, the ERP will alert the other departments regarding that particular problem before it starts affecting the other departments allowing the other departments to plan accordingly to bypass the problem. Some famous ERP vendors are Epicor, Microsoft, SAP etc.

Though both ERP and CRM have a similar effect, their approaches are different. While ERP focuses on reducing the overhead and cutting costs, CRP works to increase the company’s profits by increasing the sales volume. ERP tries to make the business more efficient, by reducing the amount of money spent on managing different processes. When customer data is maintained in a standardized format and available throughout the organization, it is easy for everyone to improve the relations with customers and this improvement in customer relations help in increasing the profits of the company.