ERP Vs. CRM: What’s the Difference?
ERP and CRM systems aim to increase a business's overall profitability, but they have distinct differences. Enterprise Resource Planning (ERP) is a general-purpose system that can be applied in any context, while Customer Relationship Management (CRM) is more focused, like a snow tire designed for a specific purpose.
- An ERP system helps companies manage their backend operations by combining data from multiple functions, such as HR, Finance, Inventory Control, Supply Chain, and Purchasing.
- A CRM system is specifically designed to help organizations optimize customer relationships, emphasizing data analytics and marketing automation. This type of software makes it easier to segment customers into target groups to better market products or services according to their preferences.
CRMs provide easy access to contact information across multiple channels and complete history tracking on each client. With this valuable insight, organizations are better equipped to outperform competitors by building stronger customer loyalty and trust.
What is CRM?
CRM, or customer relationship management, is software designed to help businesses manage customer interactions across the various sales, marketing, and customer service channels. Customer management capabilities allow companies to gain insight into their behaviors and preferences, allowing for better decisions about products and services offered, more targeted and focused marketing, greater sales efficiency and productivity, improved communication, and stronger relationships with customers. By automating sales force automation (SFA) processes, contact center operations, and marketing analytics, CRM provides a comprehensive view of customers for all departments in an organization.
The different types of CRM – operational, analytical, and collaborative CRM – focus on other goals. Operational CRMs are used to organize information concerning these prospective buyers so they can be managed appropriately. In contrast, Analytical CRMs provide up-to-date analysis of customer behavior trends which helps marketers better target their campaigns. Collaborative CRMs allow employees in each department to share insights they have gained from interacting with customers, enabling better collaboration between teams within an organization.
Sales performance management and Sales Incentive Compensation systems are separate solutions, requiring detailed data analysis that can become complex over time.
What is ERP?
ERP systems provide the necessary data for an organization to manage its resources effectively. These solutions encompass financial information, including a general ledger and accounts payable/receivable, inventory management, order management, supply chain data, and much more.
Additional solutions can include procurement and production tracking and providing business intelligence (BI) capabilities related to HRMS and customer relationship management (CRM).
ERP software originated from MRP systems used by manufacturers to better understand their needs in the manufacturing process. Since then, the term ERP has expanded beyond areas such as inventory control into broader organizational processes. ERPs are designed to reflect an organization's specific business objectives ensuring that all departments use the same centralized database for consistent data accuracy across all operations.
The ability of an ERP system to have applications manage multiple processes from one database platform mean organizations can eliminate redundant manual tasks and improve efficiency. The integrated solution allows for more comprehensive proactive monitoring across key performance indicators. As a result, companies know when performance is meeting or falling short of set or changing goals.
ERP vs. CRM System Comparison Charts
Features of ERP and CRM systems
ERP or CRM for contact management
CRMs are essential tools for any business looking to maintain proper contact management. With features like a 360-degree view of all contacts, CRMs provide much more organization and detail than a simple spreadsheet of names.
This multi-channel view makes it easy for sales or support reps to access the customer’s complete history of interactions and purchases quickly and easily, potentially saving them time when trying to serve customers. Companies can also better keep track of customer issues or complaints they have received while quickly seeing what kind of customer relations they have had with an individual.
ERP systems traditionally focus more on financial management, inventory management, and order fulfillment but can be configured to manage customer data alongside other business processes. While ERP may have some contact management capabilities, its functions will generally not be as expansive as those in a CRM system. In that case, a dedicated CRM system might better serve those customer management needs.
Integration of ERP and CRM
Integrating ERP and CRM systems is essential to streamline business operations, ensuring that customers, vendors, and operations data are consistent across both systems. Companies achieve a single source of truth by connecting the two systems and synchronizing them to a single database. Additionally, automatic information flow furthers team collaboration and promotes better customer experience through unified customer databases.
Two-way data synchronization between ERP and CRM helps businesses automate repetitive manual tasks related to order processing and invoicing while freeing employees' time for more critical tasks. With accurate data transfers in real-time, companies can ensure well-managed billing cycles that offer reasonable payment terms while reducing manual efforts involved in document management. Integrating these two systems allows companies to make smarter decisions with visibility into all customer journey stages. Furthermore, automated workflow implementations ensure customers' feedback loops are handled quickly with fast support response times.
Why Choose Deltek Enterprise Resource Planning?
Deltek is the leading provider of enterprise resource planning (ERP) solutions for project-based businesses. We offer purpose-built applications for government contracting, manufacturing, construction, and service industries that want to take control of their business. Our cloud-based ERP software offers a range of features, flexibility, security and reliability.
Our mission is to deliver solutions that help our customers connect and automate the project lifecycle that fuels their business. We believe that better software means better projects. Our industry expertise makes your projects successful and helps you achieve performance that maximizes productivity and revenue.
Project-Based ERP Leader
Thanks to our Deltek Project Nation customers, we have been named best in Government Contracting and Professional Services! Our industry-specific solutions—Ajera, Costpoint and Vantagepoint—continue to be recognized in the Project-Based ERP Leader category.