Customer relationship management (CRM) and enterprise resource planning (ERP) are two options that companies that want to simplify and improve their business processes can turn to. Both are enterprise software solutions that connect data across multiple departments and automate time-consuming manual tasks. And although they have some similar advantages and functionalities, they are not interchangeable, each one is used for a specific objective.
CRM systems support and connect front-office business functions such as marketing, sales, advertising, and customer service. ERP systems, on the other hand, primarily support and connect internal functions, such as finance, supply chain operations, and human resources.
Read on to learn more about the benefits of CRM and ERP systems, the differences between them, and whether one or both are right for your business.
Key takeaways
- Both CRM and ERP are software solutions that drive business value by centralizing and connecting data and automating processes.
- CRM automates customer interactions and insights, while ERP automates business processes and operations.
- When integrated, CRM and ERP systems improve your business efficiency and productivity levels.
- CRM and ERP integration further reduces data silos and allows you to get the most out of your systems.
What is CRM?
The customer relationship management is business software that automates how a customer interacts with your business. It is typically part of a broader set of customer experience (CX) applications that can include marketing, advertising, e-commerce, and customer service solutions. A CRM system tracks and stores all data collected from customers, including communications with sales representatives, proposals, purchase history, and service requests.
Many CRM solutions supplement those customer records through third-party data sources to ensure contact data is complete and up-to-date. All of this customer data can be shared across the organization, giving users the ability to better understand what is happening at each touchpoint. The best CRM solutions also use artificial intelligence (AI) to analyze a customer’s history and suggest recommended actions for sales.
Advantages of a CRM system
By automating customer-related processes, including daily interactions, marketing campaigns, and the sales cycle, CRM systems give companies more time and insights to build better customer relationships and drive growth. Thanks to the CRM system, employees in sales, customer service, support, marketing and other teams get a complete, shared view of the business and the history of each customer’s interactions with the company. This data can be analyzed to create more consistent, personalized customer experiences and build the trust needed to increase sales. If deployed correctly, CRM systems can:
- Improve customer service: Think about your last interaction with customer service. How long did you wait? Did you have to deal with different representatives and, therefore, needed to repeat the same thing with each one? By managing customer data in a central location, the CRM system creates more accurate customer profiles that can speed response times and achieve smoother collaboration between sales, customer service, and marketing representatives. All of these features serve to increase customer satisfaction and, therefore, the chances of turning a first-time customer into a consistent, loyal customer.
- Increase productivity: CRM tools and automation simplify common and common tasks, such as entering data and updating customer information. This speeds up processes, reduces errors, and frees employees to focus on more meaningful tasks. CRM systems also automate and digitize many customer interactions, conducting them through digital channels, such as email, live chat, chatbots or social networks. Various tools, such as live chat, connect customers with representatives immediately, generating faster responses. Chatbots that connect AI with the knowledge base of sales, customer service and technical support are available at all times to improve customer satisfaction. AI can also improve the personalization and relevance of email campaigns to effectively target outbound marketing efforts.
- Refine insights: The CRM system creates and manages enormous amounts of data, including customer demographic information, their preferences, their interactions with your company, and their purchase history. This data can be analyzed to optimize various aspects of the customer relationship, such as invoice management and improving sales forecasting. It also provides development teams with insights into customer needs and demands so they can create better products and services. Sales and marketing teams also use analytics to deliver personalized communications that make customers feel cared for and heard.
- Boost customer retention and sales: With comprehensive insights into customer interests, needs, and history, sales can make better decisions to provide more efficient service, as well as identify which customers they can target for additional revenue. Specifically, the consolidated view of all documented customer interactions, transactions, contact information and preferences within CRM systems allows you to manage interactions with customers and prospects. This information can be used to provide insights into customers and build more personalized relationships. By tracking the conversations, messages, notes, and interactions reps have with customers, CRM systems also keep customer records accessible and up-to-date, so customers don’t have to repeat themselves. information or engage in redundant interactions.
A Complete Guide to Modern ERP
Discover what defines a modern ERP solution and how cloud ERP drives business agility and innovation.
What is ERP?
The enterprise resource planning is a type of business software that manages, automates, and connects everyday back-office business processes such as accounting, purchasing, project management, supply chain management, risk management, and human resources. A complete ERP solution may also include business performance management, which help plan, budget, predict and report an organization’s financial results. Unifying these business processes into a single technology platform can streamline operations and simplify workflows. By collecting transaction data shared by an organization’s various sources, ERP systems enable the flow of related data between departments, eliminate duplication of information, and provide data integrity by storing data in a central location, a single source of information. TRUE.
Advantages of ERP
ERP systems collect and store information from various internal management departments in a common database. In this way, the company unifies the most important functions, eliminates data silos and offers employees a single source of information to drive more accurate decision making in financial management, supply chain management, human resources and other areas. ERP also speeds up business processes and boosts productivity by automating multiple manual tasks, such as data entry, that can slow down work. Additionally, ERP systems can:
- Generate money savings: ERP reduces operating costs by combining multiple business functions into a single system and automating processes across the organization. ERP systems mitigate or eliminate many administrative and operational costs, such as manual data entry or often redundant processes. This means more work can be done in less time and with fewer resources, and staff can spend time on more innovative projects that drive growth. As an example, Blue Shield of California saved nearly $500,000 in costs by implementing a cloud-based ERP system.
- Increase efficiency: Modern ERP systems use process automation and artificial intelligence to optimize manual and repetitive tasks that are prone to human errors. For example, by automating financial and accounting processes with an ERP system, companies can reduce the time needed to close their books to days, allowing staff to focus on more strategic activities. ERP also helps companies track all materials at each stage of the inventory life cycle, as well as all customer orders, in a single system. This improves supply chain visibility and planning and helps deliver the right products to customers on time.
- Improve decision making: An enterprise ERP system offers users a complete view of financial and operational performance, with customizable reports and real-time insights, without the need to manually present information. It can also reduce the time needed to complete many tasks, so processes become simpler and the time spent searching for the information they need is reduced. This, coupled with automated processes and connected systems, allows teams to get accurate information to decision makers quickly so they can respond to changing business and economic conditions.
- Foster collaboration: ERP systems provide a single source of data and a common interface, allowing users across departments to easily share information and improve tasks such as financial planning, sales and inventory management, logistics, staff and customer experience. Instead of departments working with multiple software solutions that only one group can access, teams can work proactively and access information independently, rather than requesting it from another part of the organization. HR teams HH. and finance, for example, overlap in various business functions, such as workforce planning, payroll management, time and labor, purchasing, and accounting. Sharing a single employee record across these teams can promote coordination and reduce errors.
- Reduce risks: An effective ERP system ensures data integrity and facilitates the implementation of financial controls. With a centralized system and permission-based access, only assigned employees can view sensitive data, improving audit trails and reducing financial and operational risks.
CRM vs ERP: know the main differences
CRM and ERP systems help businesses increase productivity, improve automation, and drive revenue generation. Therefore, you may be wondering, what is the difference between CRM and ERP? Can one replace the other?
The main difference between the two is that ERP software is used primarily for financial data and operations, and CRM software is used for the sales and customer service aspects of the business. While ERP systems primarily support back-office functions (such as accounting, purchasing, HR, and compliance), CRM supports front-office functions (such as marketing, sales, and customer service).
Many ERPs contain CRM functions, but CRMs do not contain ERP functions or handle transactional data. Both CRM and ERP are essential components for an effective enterprise IT system, and one cannot replace the other. Find out how Varsity Scoreboards obtained all the advantages of both systems by integrating the two platforms.
CRM and ERP integration
There are dozens, sometimes hundreds, of interactions between a company and a customer, and they occur in various departments with different conditions and objectives. Ideally, you want to offer consistent interactions across all touchpoints, giving customers a unified experience. To deliver that kind of modern, seamless experience, companies must integrate their CRM and ERP systems to share data effectively, rather than maintaining two separate sets of data.
Take e-commerce sales as an example. Once a customer pays for products and services in the front-office (online), the back-office (finance) records the transaction details and revenue. If CRM and ERP systems do not operate from a consistent and common set of data, errors can occur, orders can be lost, and certain profits may not be reported.
By linking and analyzing front-office CRM data with back-office ERP data, companies can also understand customer habits to improve budgeting and forecasting, provide faster, more personalized customer experiences, and forecast demands. future. Sales reps can also track new opportunities, create quote requests, and merge new deals with existing accounts in real time.
And most importantly, CRM and ERP integration can boost profitability. Technology research firm Nucleus Research found that integrating CRM with other internal applications led to “productivity increases in sales, customer service and operations, and 20 to 30 percent growth in the business as a whole.”
Choose the right solution for your business
To adapt to the demands of modern businesses and gain a competitive advantage, managers need to have the right tools. Now that we have explained the differences between CRM and ERP, the ideal is that you can make the most opportune decision in view of the multiple existing options.
Whether to improve customer retention, streamline the accounting process, increase sales or improve control of supply chain issues, CRM and ERP systems help companies unify information on a single platform and offer a detailed view of all processes. This makes things easier for company leaders, employees, and customers.
Oracle Fusion Cloud ERP and Oracle Advertising and Customer Experience (CX) They use AI and predictive analytics to help organizations deliver exceptional customer service, simplify common tasks, and stay up to date. Take full advantage of this unified cloud platform that offers a complete view of every customer interaction and every dollar spent.
CRM vs ERP FAQ
Can ERP replace CRM?
No. Although ERP and CRM systems provide similar benefits, they are not interchangeable.
What is the difference between CRM and ERP?
CRM supports front-office functions such as sales, service, and marketing, and ERP supports back-office functions such as accounting, operations, and HR. HH.
Can your ERP system integrate with CRM?
Yes, with the right planning, the two can be connected to synchronize business data, manage customer relationships, and drive growth.
Who should use an ERP?
Any business that wants to unify its back-office data in a centralized location and automate financial, operations and human resources processes.
Who should use a CRM?
Any company that wants to unify its front-office data in a centralized location, improve customer experiences and create better products and services.