Customer relationship management (CRM) systems and enterprise resource planning (ERP) systems can both increase companies’ profit margins when properly deployed and utilized. However, the ways that these two systems accomplish the end result differ. To put it simply: CRM software increases a company’s revenue, while ERP software decreases a company’s overhead.
Companies that can afford to buy compatible CRM and ERP systems should strongly consider doing exactly that or buying a software suite that performs the functions of both. Companies that have to choose between one or the other will need to assess their current and anticipated needs, problems, and market trends to make a decision that is best for the company’s bottom line.
CRM is any system that manages customer data and sales leads. The purpose of CRM software is to minimize the effort associated with sales and customer relations by minimizing the manual effort associated with those tasks. CRM systems reduce the time and labor associated with customer-related tasks including initial contacts with new customers, retaining customer loyalty, and closing sales.
ERP is any system that collects data from multiple departments in a business, often managing data from every department. The goal of ERP is to increase the quality of communications and overall productivity of the business. Robust ERP software can also compile and present data that will allow companies to anticipate problems and trends instead of reacting to them.
CRM software focuses on increasing sales volume and profits, whereas ERP software focuses on lowering costs and reducing overhead. CRM software focuses on front-end or customer-facing operations, whereas ERP systems excel at managing and optimizing back-office activities that keep the business operational.
CRM software deals only with sales-related operations, and ERP software can apply to virtually every aspect of a business. However, the additional functionality comes at a cost, making CRM software significantly less expensive than ERP software.
Companies whose main priority is to fortify their sales teams and expand company sales should choose CRM software, especially when companies must choose between the two. CRM software is also a good option for companies that want to improve and streamline their marketing strategies. CRM software can also automate many aspects of the customer-related activity, which can be a crucial factor for understaffed sales teams or a surplus of customer activity.
ERP software is a good choice for companies seeking software that fulfills multiple purposes, especially considering that some ERP software suites contain CRM functionality as part of their services. ERP can also benefit an entire organization, as opposed to CRM which focuses primarily on sales-based employees. It’s also the better choice for companies who want to focus on increasing the efficiency of their internal operations.
Companies that have only a CRM system or an ERP system may feel the need to have both types of systems. When the ERP system does not have its own robust CRM functionality, having both can be an effective combination. However, companies need to research the available products and services before making purchases.
Integration and compatibility are key factors to consider; CRM systems and ERP systems with poor compatibility will cost companies time and money as well as introduce data duplications regardless of how effective the systems are individually.
There are some vendors that sell systems that combine both CRM and ERP operations, eliminating the need to buy multiple software suites provided that the comprehensive product covers the company’s needs and goals.
Unim creates custom CRM software that specifically addresses our clients’ needs and goals. After discussions with our clients to ascertain what they expect and want from CRM software, we identify areas of improvement and suggest solutions to increase our clients’ productivity.
We then customize our “basic” application with features, interfaces, and security protocols that meet – if not exceed – our clients’ expectations. We follow up by training our clients on how to use their customized UNIM software.
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