ERP vs CRM software development: How to make the right choice

If you want to manage your business efficiently, you need to fully control your data and access it at any time and with any goal. That’s when CRM and ERP come to help. The goals of these platforms slightly differ as they relate to separate sides of your business. However, they still overlap. 

Let’s learn how CRM is different from ERP and whether it’s worth spending on ERP vs CRM development.

For What Areas Are ERP and CRM Best Suited

Let’s start with a brief definition of each platform. 

CRM is a customer relationship management system that contains all relevant and detailed information about your customers and prospects, their stage in the buying process, the history of their interaction with your brand, and up-to-date contact information. CRM is mostly used for sales and marketing purposes. It helps build a consistent relationship with your prospects, convert them into customers, and keep them engaged throughout the customer journey.

ERP is an enterprise resources planning system that focuses more on the business side. It’s business management software. ERP aims to optimize the accounting, manufacturing, human resources, and business processes of the company and integrate them into one system. 

In simple words, ERP is all about optimizing business processes, when CRM focuses on improving marketing and sales in the company. However, there are areas where CRM and ERP overlap, such as sales force and marketing automation.

As you can see, ERP is mostly focused on the company’s internal processes, such as supply chain, operations, and finance, when CRM is all about external processes and outreach.

Companies that produce goods and need better management of all financial processes usually choose ERP, when CRM is better for companies that deal more with services and focus on lead nurturing and customer development.

“The main users of CRM systems are in the sales and support organizations – they are ultimately customer-facing and they don’t do the actual work of producing and fulfilling orders (they just yell at the people who do that).  In contrast, the ERP users are focused on the process and logistics of producing the widgets: factory managers, production schedulers, buyers, supply chain types and finance types.” 

Source

Let’s dig deeper into the basics of CRM and its main features for now. Then we will do the same for ERP, and you’ll be one step closer to understanding the difference between these two systems.

 CRM Basics and main goals

So, what is the purpose of CRM? You may probably know that customers are the heart of any business, and no company can survive without efficient customer management. All your business processes revolve around your customers, and it’s them who decide whether your company will be competitive and profitable. Companies that put their clients in the first place will always run ahead of their competitors.

CRM usually revolves around three main goals: executive, management, and user.

When it comes to executives, CRM will help to:

With CRM, managers can do the following:

For end-users, CRM allows to:

Now, let’s have a look at the most common CRM features.

Essential features of CRM you should consider

According to the survey by Capterra, people realized they needed CRM when it became hard to keep track of customers, manage sales revenue, and track key metrics.

Accordingly, the most basic features of the CRM system include:

Customer Management

It is the first and foremost feature of any CRM system. With CRM, you should be able to keep all your contacts, leads, and customers in one place, together with the history of their purchases and engagement across different marketing and sales channels.

Pipeline Management

A CRM lets you track all your leads and customers and move them through the customer buying journey. That’s where sales and marketing teams work in collaboration, and when the prospect engages with the marketing activities, its contact and activity information is handled to the sales team. Pipeline management helps nurture the leads more efficiently and do this in the right place and at the right time.

Automate Workflow

CRM frees the marketing and sales team from many redundant tasks, such as entering and cleaning customer data, manually replying to all emails, updating order statuses, etc.

Analytics & Report

With CRM, you can better track your marketing and sales metrics, analyze your business metrics in one dashboard, and share reports with your team.

Email Integration

Most CRM systems can be integrated with your email marketing software or any email provider, so you can send personalized messages to your customers and prospects and better respond to their needs.

Introduction to ERP: How it’s different from CRM

ERP stands for enterprise resource planning system – a business process management software for managing a company’s financials, supply chain, operations, commerce, reporting, manufacturing, and human resource activities. The main goal of ERP is to optimize your business and financial processes.

ERP combines all your business processes to bring more visibility and transparency to employees of all departments and allows them to perform the job smarter and faster.

Other goals of ERP are the following:

The main industries that need ERP are:

In most cases, ERP is used by medium and large-sized companies that deal with hard numbers in each step of the operation and require a lot of security. ERP is a great choice for companies that want to minimize wait times, optimize space usage, streamline shipments, and maximize the human output per work hour.

Features of ERP

According to Panorama Consulting, most of the businesses implement ERP to improve business performance.

That’s why the top ERP should contain the following self-service features:

Inventory Management

ERP helps manage inventory more efficiently, organize and improve the supply purchase, organize the warehouse space, and make the inventory management more efficient. An ERP inventory management system allows integrating with external partners to ensure all systems communicate with each other.

Tracking & Visibility

With the help of ERP, you can track the availability of the products, monitor the order route from the warehouse to shipping, and even track the delivery schedule to make the order shipment fully visible.

Data Analysis

Companies use ERP to store the data in one place and analyze it more efficiently. ERP helps to collect data from multiple sources. ERP system integrates all company data in a single, relational database. Employees from different departments can input the data and access it via modules designed specifically for each functional area.

Payroll Management

ERP allows better management and control of purchase orders, budgets, salaries, and insurance to facilitate payroll processing depending on the company’s specified remuneration criterion.

Human Resource Management

With the help of ERP, HR managers can have full control over the hiring, training, insuring, and employee relations issues. ERP usually includes employee database management, management of compensations and payroll, time and attendance management, employee training and development, and KPI and reports tracking.

5 important differences between custom CRM vs ERP implementation

CRM and ERP are responsible for different sides of the business. That’s why before choosing what works for you, you need to know what processes and aspects each of these systems deal with. So, if you hesitate between ERP vs CRM software development consider the following:

Always start with your final goal. Ask yourself what business processes you want to improve and what tasks you want to automate. If your business is more service-based and you need to manage the relationships with customers better, CRM may be the right fit for you. If you manage a large company or an enterprise and need to optimize the business and finance operations in all your departments, ERP is what you need.

CRM systems are usually easier to implement. It requires fewer costs and time spent. On the other side, ERP has to be used and learned by all employees from different departments and integrated fully into their work process.

It’s usually easier to migrate all the data about your customers in CRM. Typically, one can do it in a few clicks. When it comes to ERP, you need to migrate all company information such as payments, invoices, deliveries, delivery notes, etc.

As we have already mentioned, the migration to ERP takes a lot of time, so obviously, it will require more costs. According to the ERP report, the average budget per user for an ERP project is $7,200. Depending on the number of users you will have and added costs, ERP implementation can cost around $150,000 and $750,000 for a mid-sized business.

Usually, small companies and startups have a limited budget and don’t have enough resources for implementing ERP. In addition, such companies don’t have a lot of business processes and departments yet. That’s why an ERP is better suitable for medium and larger-sized companies.

ERP custom system vs CRM: Which is the best option for your company?

ERP custom software vs CRM – what to choose? So, choose the CRM if you want to:

ERP is a good way to go if you:

Before implementing a CRM or ERP system, you need to reveal and analyze your core business needs. 

That’s exactly what our AMCONSOFT team has done to automate the transport management system for the logistics company.

Our main task and challenge

Our main task was to automate document management, order management, transport management, apply cost reduction and spend optimization on transport. A company has many employees, a non-standardized planning methodology, and constant manual human errors. Therefore it required the standardization of transport planning methodologies and algorithms.

Solution

We analyzed the company’s transport department budgeting model, including modification of budgeting forms, cost analysis, budget execution, and implementation of changes. We reduced company costs by implementing standardization of transport planning methodologies and algorithms. On top of that, we designed and implemented a workflow that produced a 37% reduction in time spent on manual work.

Also, we had experience with developing ERP systems for a travel business.

Challenge

The main challenge was to reduce the need for buying and maintaining multiple software systems, enabling all the departments to perform various functions simultaneously. The client has requested to develop a system that should be easy to maintain and save time on routine processes.

Solution

After analyzing the client business needs, we have created an ERP system with a set of modules: Clients, Orders, Products, System Users, Finance and Statistics. The main goal of this system was to organize all departments so they could perform simultaneous work, export data, view real-time analytics and stats, create reports in minutes, etc.

Result

We have developed an ERP system that eliminates labor-intensive manual processes and makes data collecting more efficient and accurate. It also allows to control and manage the contracts with hotels to discuss optimal conditions of vouchers for reservations and invoices.

Conclusion

To conclude, both ERP and CRM systems help optimize your business processes. However, there’s still CRM vs ERP difference. ERP focuses more on the internal business processes such as financing, manufacturing, HR, and performance of different departments. CRM focuses more on the external process: communication with customers, lead nurturing and converting into customers.

The AMCONSOFT team will help you choose the system that meets your business needs best and provide you with the necessary customization. Contact us to get a free consultation and reveal what your business really needs.