The Difference Between ERPs And CRMs

Small business owners often have trouble differentiating between all the different types of business software. Customer relationship management (CRM) and enterprise resource planning (ERP) programs are regularly confused, as they offer similar benefits to its users.

This article will explain the differences and the similarities between ERPs and CRMs, as well as cover their advantages and disadvantages. Further, it will go on to demonstrate how the two different types of software can supplement each other to create a highly productive work environment.

In the end, we will provide business owners and executives with actionable advice on how to choose between CRMs and ERPs, as well as recommend the best solution for small businesses.

However, before we actually start comparing ERPs and CRMs, let us briefly describe what they are and how they are used in the modern workplaces.

What is an ERP?

If you’ve ever searched for ERP on Google, it’s likely that you’ve received an overwhelming amount of information that is often contrasting. In fact, it seems like almost every website has its own definition of ERPs.

This underscores the incredible flexibility of ERPs and it explains why ERP has grown into an umbrella term that covers practically all digital business tools. However, we will use the traditional definition that defines ERP as the integrated management of main business processes, often in real-time and mediated by software and technology.

In other words, ERP systems represent platforms that manage all resources and processes of a business to increase its efficiency. At its core level, an ERP integrates all features of the business and its data to streamline the work.

Although they can cover practically entire organizations, the key areas of business that ERPs typically cover include:

• Accounting
• Manufacturing
• Inventory
• Service/product distribution
• Logistics
• Supply chain management

In conclusion, an ERP takes data from the entire organization and integrates it into a singular platform that enables business executives to track, plan and perform activities within the company.

The benefits of ERPs

Large and complex companies enjoy the greatest benefits of ERPs, although fast-growing small business can find ERPs useful. This is because an ERP takes all of the company’s data, as it streamlines and optimizes the business operations.

Through an ERP system, the data becomes more consolidated, manageable and accessible, allowing key staff members to access the valuable information quickly and easily. This includes staff members from all company departments, including manufacturing, distribution and accounting.

As a consequence, employees will be able to collaborate and communicate better, because they will have access to real-time data regarding all tasks and processes. This information is essential for business executives, which makes ERPs an indispensable tool for large corporations.

What is a CRM?

As we already mentioned, CRM stands for customer relationship management, with emphasis placed on relationships.

CRM software represents a sales management system that allows businesses to create long-term relationships with their clients and customers. A CRM lets you manage your contacts, handle the sales process and track data to acquire valuable insights into customer behavior.

We recommend that you check out our guide on CRMs for more details. It explains how CRMs can organize and maintain relationships with individual customers, which allows businesses to create personalized services and products.

The benefits of CRMs

Contrary to ERPs, CRMs primarily store information about the company’s clients and their interaction with the company. The valuable information is shared through a centralized platform in the form of a CRM, providing all employees with real-time data about their customers.

Through a CRM, a company can better evaluate its customers and extract more value from them, as well as optimize its sales and marketing processes to generate more leads. This leads to improved customer loyalty, decreased customer churn and more revenue for the business.

In other words, CRMs function similar to ERPs, but they operate a smaller dataset, which allows business owners to focus their efforts on the customers and their experience.

The difference between ERPs and CRMs

As you may have concluded, ERPs and CRMs share the same purpose – they are implemented to streamline the business processes, create a more productive work environment and ultimately, increase the company’s profits. However, they use different methods to achieve their goals.

ERPs aim to reduce the amount of resources necessary to run a business by streamlining the workflows and optimizing the processes. CRMs, on the other hand, aim to increase the profits by improving the sales figures by analyzing the company’s customers, their overall behavior and interaction with the brand.

Which type of software do you need?

Now that we have explained what CRMs and ERPs are, another question naturally arises: how can you determine whether you need a CRM or an ERP system? Ideally, companies should look to implement both types of software, but the reality is that most companies simply do not have sufficient resources to run both an ERP and a CRM.

This means that business owners often have the ungrateful task of choosing which software to prioritize. So, to help you make the decision, we will outline the most important characteristics of both ERPs and CRMs and provide you with a set of questions that can help you identify the best solution for your company.

It’s important to remember that ERPs and CRMs eventually bring the same results: increased profits, even though they rely on different methodology. ERPs focus on internal processes, while CRMs cover the external relationships between the company and its clients.

Despite this difference, some ERPs have the CRM features integrated into their platform. However, the CRM features in ERPs are traditionally far less powerful and helpful than a standalone CRM. ERPs simply miss many features that make CRMs useful to small companies and organizations. This is why small businesses should try implementing a CRM before they opt for any ERP software.

While there is no doubt that ERPs can be immensely useful for all types of businesses, they are a complex system that is not optimized for small companies. This is especially true if the company has never utilized any similar platform in its organization.

However, in the end, choosing a CRM or an ERP comes down to a professional assessment of your company and its operations. To better assess your company and examine whether you need a CRM or an ERP, consider the following questions:

• What is the size of your company? The size of your business is the first important factor that you need to evaluate. Large corporations rely on vast amounts of data and complex systems, which means that ERPs can help them streamline their internal processes. On the other hand, small and medium-sized companies are usually focused on increasing their sales, which makes them a prime candidate for a CRM.
• What are your company’s prospects in the future? In other words, do you expect your company to grow significantly in the short term? If yes, you may need to consider implementing an ERP. If your business experiences a steady growth or you’re unsure how to grow your company, go for a CRM.
• What are your goals? You need to specify what you’re trying to achieve with the software. If you’re looking to increase sales and improve customer satisfaction, you need a CRM. However, if you’re looking to optimize the existing business operations, you should get an ERP.
• Have you identified any weak points in your business? Or are you trying to solve any specific issues within the organization? Depending on the field that you’re looking to improve, you should choose a CRM or an ERP, while taking into consideration all the benefits that we outlined earlier in this article.
• Are you already using a CRM or an ERP? In case you are, you need to ask yourself whether you’re truly satisfied with what it achieved for your business. If you’re happy with the existing software, regardless of whether that’s a CRM or an ERP, you should first consider upgrading your plan before transferring to another system.
• What is your budget? Before you decide that you need a specific solution, you need to set a software budget. Depending on the available resources, you may have to select a more limited solution with only the essential features.

Once you decide whether you need a CRM or an ERP, you’ll need to research the market and find the most suitable solution for your business. Make sure to consider the features, the price, the initial setup and customer support.

If you want to experience the best of both worlds, try Simply CRM, a CRM platform that integrates with many popular ERPs, providing you with a wide variety of features. Simply CRM integrates seamless with Billy, Dinero, Economic and many other popular ERPs.

How Simply CRM bridges the gap between CRMs and ERPs

Simply CRM represents a unique system that offers its users an all-in-one platform that is easy to use and manage. The platform utilizes a user-centric approach to make its interface simple and beginner-friendly, but allowing clients to fully customize it according to their needs.

Despite its simplicity, Simply CRM provides a variety of useful features that help businesses make their work more efficient and productive. This powerful solution allows its users to:

• Manage contacts, leads and opportunities
• Automate tasks and processes, such as invoicing and emailing
• Improve internal and external business communication
• Safely store all data in the cloud, making it available from any location
• Organize all customer data on a single platform
• Improve the customer experience
• Track leads and convert them to customers
• Receive and use powerful reports based on advanced analytics
• Develop custom fields and layouts to suit their business
• Schedule events and organize company activities

However, Simply is much more than a CRM software with numerous features and functions. It goes further than almost any other solution currently available on the market. The Simply team understands that a single platform, no matter how powerful or useful, will not be the preferred solution unless it incorporates and integrates with other business programs.

This is why their CRM system can integrate with countless applications, tools and programs. Simply works seamlessly with the following apps:

• G Suite
• Outlook
• Magento
• WooCommerce
• WordPress
• Mandrill
• MailChimp

Aside from the general apps and tools, Simply integrates with a number of other CRM and ERP solutions, allowing you to quickly transition between different systems. If your business currently relies on any of the following platforms, you can easily move to Simply CRM, with their dedicated support leading you through the entire process.

• Microsoft Dynamics
• Billy
• Dinero
• Economic

If you would like to enjoy all these features and integrations, feel free to contact Simply CRM and schedule a 30-day free trial. No credit cards or setup fees required.