The Difference Between CRM and ERP

CRM and ERP are two important business technology acronyms. In this article we explain the role of CRM and ERP systems.

CRM and ERP are two important technology acronyms that businesses need to know. Both are valuable business software solutions but each system is used to manage and achieve very different business goals. In this Webopedia article we’ll explain the role of CRM and ERP in business today.

CRM versus ERP

What is CRM?

CRM is an abbreviation for customer relationship management and is a phrase used to describe all aspects of interaction that a company has with its customer, whether it is sales or service-related. It’s a business strategy that helps you to better understand your customer, retain customers, provide excellent customer service, win new clients and increase profitably.

Many aspects of CRM relies heavily on technology. CRM software will collect, manage and link information about the customer. You can use CRM software to create marketing campaigns, view a customer’s entire of history of interactions with your business and use it to streamline daily business and sales tasks.

What is ERP?

ERP is an abbreviation for enterprise resource planning. ERP software is used to manage the business. It integrates all facets of an operation, including product planning, development, manufacturing processes, human resources, financials and sales and marketing.

Today’s ERP solutions are designed to help you to improve the operational efficiency of business resources. Businesses use ERP systems to integrate all its business processes into a single system to efficiently and effectively manage business goals.

The Differences Between CRM and ERP

While specific features and capabilities differ between platforms and vendors, here’s a quick list of some of the many activities each type of business software can help you improve:

Use CRM Software to manage any of the following front-office activities:

Organize marketing efforts, manage the sales pipeline, calculate time spent on converting leads to closing deals, streamline your sales processes, automates customer service, track a customer’s interactions with your business, share marketing and sales collateral, create data reports, learn which products sell best and when, prioritize leads, manage inventory based on historical sales data, collaborate to sell as a team, manage your business contacts, manage your business leads, share customer profiles with co-workers and See where leads come from.

Use ERP Software to manage back-office activities and tasks including the following:

Distribution process management, supply chain management, services knowledge base, configure, prices, improve accuracy of financial data, facilitate better project planning, automate employee life-cycle, Standardize critical business procedures, reduce redundant tasks, assess business needs, accounting and financial applications, lower purchasing costs, manage human resources and payroll.

Integrating CRM and ERP Systems

There are many solutions available today that integrate ERP and CRM solutions to combine financial, operational, customer relations and business intelligence in one management system. Typically, CRM and ERP solutions are data silos in an organization, but when you integrate the systems to share data it can further improve operations management.

20 CRM & ERP Definitions

The following Webopedia.com tech term definitions will help you to better understand customer relationship management and enterprise resource planning software and solutions.

Enterprise Applications Definitions

Customer Relationship Management Definitions

Enterprise Resource Planning Definitions

This article was last updated on February 12, 2017

 

 

Vangie Beal
Vangie Beal is a freelance business and technology writer covering Internet technologies and online business since the late '90s.

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