ERP vs CRM: What to use?

It is virtually impossible to imagine a competitive modern business operating in a fully manual mode. Software solutions give a savvy businessman far too great an advantage to ignore. Among countless tools helping modern entrepreneurs, two kinds of software offerings stand out due to their popularity and impact: ERP and CRM.

Both options greatly increase businesses' efficiency, but they address different management challenges and achieve different goals. So, let’s find out what an ERP system is, how it is different from a CRM, and which will better fit your company.

What does ERP mean in business?

ERP stands for “Enterprise Resource Planning.” ERP solutions are designed to collect data, optimize internal processes within organisations, and help with management. The system typically integrates a variety of modules tailored to tackle challenges in specific areas.

The list of modules includes, but is not limited to:

• Supply chain;

• Procurement;

• Personnel;

• Manufacturing;

• Accounting;

• Finances.

ERP software unites all modules into one holistic system. This ensures effective communication within the company without reliance on human interaction and allows management to rely on correct, unbiased information.

Moreover, ERP is the cornerstone of automation of routine, regularly repeated tasks, freeing resources and time for more complicated problems that actually require human attention.

In summary, ERP enables cost optimization, mishap prevention, and provides timely, unbiased information for decision-makers.

Naturally, ERP software meaning increases alongside the scale of the enterprise. A small organization with just a handful of employees won’t be able to leverage it to the same extent as a large company employing hundreds of people.

What Is CRM?

CRM or Customer Relationship Management systems are built to handle all customer interactions and relevant data.

Typical CRM software processes:

• Contact information;

• Purchase history;

• Interaction history;

• The support history;

• Pending orders.

This data array gives the company an invaluable advantage in understanding its audience.

CRM enables the automation of marketing newsletters and even helps tailor offers to individual customers, increasing the conversion rate. The sales department will also be much more successful if the managers know what the specific customer likes. Moreover, CRM makes customer support service more effective by automating support ticket tracking and providing employees with data on previous interactions.

In short, CRM makes giving customers the best possible experience much easier. This ensures that customers won’t leave the company, giving it an edge over the competition and increasing revenue.

ERP vs CRM: Key Differences

The two types of software focus on different business areas. While CRM handles customer relations and helps the company to attract more revenue, ERP is occupied with internal operations and helps reduce expenses. However, both systems are based on unbiased data processing.

However, it is worth noting that many products on the market combine CRM and ERP features in a single product. Mindall is a great illustration of such an approach. In addition to comprehensive CRM functionality, it offers a team configuration module for effective personnel management.

Combining ERP and CRM features not only enables companies to leverage both systems but also increases the systems’ effectiveness. For instance, customer support service will work much faster if it can access warehouse data in an ERP system.

Do You Need ERP, CRM, or both?

The principal factors determining whether a CRM or ERP system fits the business better are its scale, immediate goals and industry-specific requirements.

A small organization usually doesn't require an ERP system, especially if its operation is relatively simple. Such companies have relatively low internal “friction,” so they benefit the least from internal processes optimization. Such businesses can rely solely on a CRM system to give their customers the best possible experience and boost sales.

Large enterprises with hundreds of employees and/or involved in complicated manufacturing and logistical operations will cut their expenses significantly due to an ERP system integration.

As a result, companies in marketing, real estate, customer service, and other similar industries usually get by with only CRMs. In contrast, the manufacturing, retail and transport industries rely heavily on ERPs.

However, thinking that CRM and ERP systems are mutually exclusive would be a mistake. The vast majority of businesses taking advantage of ERP will also need an effective CRM solution. After all, manufacturers must sell their products to someone, right?

Companies that require an ERP solution but not a CRM system are very rare today. Such organizations have to have a very limited list of customers who don’t have a viable alternative. Exclusive manufacturing of very specific components that other manufacturers simply have to buy is one of the few examples of a business that is not very demanding regarding customer relations.

Conclusion

CRM and ERP both provide immense advantages to an enterprise that uses them. It is very difficult, if not impossible, for a modern company to remain competitive or even viable without relying on such solutions.

CRM systems are useful for the vast majority of businesses. Increases in sales and customer satisfaction directly affect revenue. And who will refuse to get more revenue?

ERP software and its viability for a specific situation are much more complicated questions — the organization must be large enough and complicated enough to justify its application.

The final decision is mainly determined by the size of your company and your current business goals. After all, it is wise to plan for anticipated growth in advance. Naturally, individual industry peculiarities must also be taken into account.

Some solutions also combine CRM and ERP or integrate features from one type of software into another. Mindall is a great example — it is a CRM system tailored for the real estate market and has a powerful module for team configuration integrated. So, if you want to boost your real estate business and make the team more efficient at the same time, check Mindall out!

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5 Reasons to Choose MindAll as Your Real Estate CRM