ERP vs CRM: Which one is right for Business?

8 min readDec 27, 2023

Many resources are available to help your firm increase revenues, efficiency, and growth. The trick is using the right ones. Clients are often unaware of how ERP vs CRM and vice versa affect their organizations. Both tools are similar and may confuse users. There are important differences to consider before implementing a solution for your firm. Therefore, we decided to cover everything in this blog.

Key Differences Between ERP and CRM

Both ERP and CRM automate fundamental business activities to boost efficiency. However, there are considerable variances. Customer Relationship Management (CMS) software handles marketing and sales, while Enterprise Resource Planning (ERP) systems oversee back-office activities.

Let’s examine each one to determine the best answer for your organization.

The ERP system

The heart of your business is your ERP. It coordinates departmental procedures, finances, and best practices.

Numerous modules of ERP software properly manage numerous corporate processes. Each module works together to provide a complete picture of your business, from financial transactions to inventories and HR. This streamlines data sharing and departmental collaboration, improving efficiency.

They can be implemented on-premises or online. They can be accessed via company servers or the Internet. Popular ERPs include SAP, Microsoft Dynamics, and Oracle. Statista predicts the ERP software industry will reach USD 187.79 billion by 2030, expanding by 14.8%.

Key ERP System Features and Functions

ERPs resemble the human body. Internal data powers department-wide workflows for accurate accounting and financial decisions. ERP systems’ main characteristics and functions include:

Financial Management

ERPs enable you to handle business finances like a financial counselor. It tracks everything from office rent and raw materials to employee benefits and compensation. Consolidating financial data improves accuracy, optimizes spending, saves costs, and streamlines financial accounts and general ledger management.

Human Resources Management

Human resources personnel can automate time-consuming tasks with ERPs. They efficiently manage employee data, benefits, training, job postings, and performance. Their workforces match your ambitions properly.

Supply Chain Management

Supply chain management helps navigate commodities and services. ERP systems streamline supply-side activities to maximize customer value and market competitiveness. These automated solutions assist inventory management, product planning, and data analytics to optimize resources and supply chain responsiveness.

Project Management

Enterprise resource planning software supports good project management. It aids resource planning, organization, and management. Tasks, resources, and progress may be easily assigned and tracked.

E-commerce Integrations

ERPs can link with e-commerce and sales platforms to synchronize operations, manage orders and stocks, and analyze data for better performance. This is like having a well-planned dashboard with analytical capabilities that save time and aid decision-making for efficient service and product delivery.

How ERPs Help Businesses

Enterprise resource planning systems are used by healthcare, retail & e-commerce, manufacturing, and finance companies for their many benefits.

Efficiency, Low Costs

ERPs automate operational procedures, removing the need for several systems. This reduces expenses and combines resources, encouraging efficiency and collaboration in your organization.

Greater Flexibility

ERPs are the best strategic assets because of their versatility. They assist your businesses in quickly adapting to market and business changes. This flexibility lets firms customize their ERP operations easily, allowing agility and resilience.

Making Smart Choices

Real-time data and analysis based on reliable findings. Having real-time information helps you make better decisions. ERP solutions give firms the intelligence to run operations accurately.

Easy Cooperation

ERPs improve departmental communication by creating a central database. This ensures a smooth information flow and dependable internal insights for all users. Therefore, errors and disinformation are less likely.

Improved Security

ERP systems have built-in security measures that assure compliance with laws and regulations and reduce compliance burdens. These software solutions reduce regulatory compliance time by protecting sensitive data. Thus, data security and protection can be ignored to focus on essential activities.

CRM software

Businesses can streamline customer interactions with current and potential clients with a CRM system. It helps all businesses build consumer relationships. CRMs improve sales and marketing while saving time and money.

Even basic CRMs examine client interaction history with multiple datasets. They collect contact information, purchase history, and communication logs from customer service, online forms, and sales contacts. You can also use consumer behavior and preferences to improve marketing, service, and sales.

CRM systems ensure teams respond quickly to client inquiries across many channels. They also automate lead creation and sales forecasting, increasing efficiency and earnings. CRM systems have increased revenue by 87%, customer happiness by 74%, and business efficiency by 73%. CRM is being used in real estate, healthcare, travel & hospitality, finance, and more.

Revenue from CRM software is estimated to exceed $80 billion by 2025. Microsoft Dynamics 365, Zoho CRM, LeadSquare, Salesforce, etc. are popular CRM examples.

CRM Software Features and Functions

Large amounts of client data accumulate as your firm expands. You may miss important solutions and success by manually managing this data. CRM software development can transform customer and lead management.

Manage Contacts

CRM systems provide a well-segmented database by tracking client interactions. You get plenty of data to help sales and marketing teams personalize sales pipeline talks. This level of detail allows teams to connect with clients meaningfully, strengthening connections and increasing conversion rates.

Tracking and managing leads

Effective lead and opportunity tracking is crucial for sales prospect monitoring. CRMs with lead scoring systems help sales teams prioritize and follow up with potential customers. This simplified method boosts sales force productivity and conversion rates, increasing business income.

Market Automation

Targeting potential clients strategically is key, and CRMs help with marketing automation. Your teams can focus on a customer’s sales stage. Campaign performance analysis provides continual adjustment, maximizing lead generation and conversion.

Automating Sales

Sales teams can focus on strategic client engagement and complex issues by automating repetitive processes with software. SFA (Sales Force Automation) automates data entry, follow-up communications, lead tracking, and opportunity management, freeing executives from boring responsibilities. They have time to develop customer-focused strategies. Productivity and customer interactions improve, boosting corporate development and agility.

Sales Forecast

CRM software evaluates sales strategy and tactics. You can use it to analyze past performance and design sales strategies to boost lead conversions and revenue.

Analytics

Customer relationship management systems provide analytics and reporting capabilities to track and measure performance based on customer acquisition, retention, sales, and marketing effectiveness. These features are collaborative, so numerous users can utilize them.

Integration

Custom CRMs integrate with accounting, project management, email, and other technologies. Chat and online analytics simplify consumer behavior analysis.

CRM Benefits Your Business

CRM software helps your firm improve customer service and team productivity. It has several benefits for businesses of all sizes and consumer bases.

Enhances Customer Relations

CRMs improve customer engagement by understanding their behavior. Providing a smooth customer journey with real-time insights helps boost customer loyalty and happiness.

Increase Sales & Revenue

CRM helps find opportunities and convert leads by centralizing customer data. To increase sales and revenue, your team can master sharing the appropriate information at the right moment.

Enhanced Efficiency

CRM ensures a great client experience. Automating welcome messages, post-purchase follow-ups, and order status updates improves client interactions. Through seamless management, your team can focus on customer retention and new sales prospects.

Decision-making with data

CRM systems provide significant consumer behavior and preference data. Using this treasure, your teams can make smart marketing, sales, and business decisions.

Smooth Cooperation

Converting leads into sales requires consistent and effective communication. Without efficient follow-ups, sales prospects may stall. CRM software is a primary hub for teamwork and effective communication.

Customer Retention

CRM enables individualized and seamless customer experiences, improving sales. Its application reduces customer churn, increases retention, and enhances corporate growth.

What You Need: ERP vs CRM

Data-driven insights from ERP and CRM can boost sales, revenue, and customer satisfaction. But there’s a lot that makes them different. Understanding which one meets most of your organizational goals and needs is the key to making the right choice.

The table below may help you summarize the differences between ERP and CRM.

Looking for a clearer answer to what’s most suitable for your business?

You Should Opt for an ERP Software When:

Your operational expenses exceed expected limits.

Data silos and misinformation is making it difficult to meet customer needs and handle market shifts.

Your company requires support in risk management or compliance with industry regulations.

Build The Best ERP and CRM Solutions With Us

To keep your business updated while ensuring growth, you need flawless and highly competent solutions. Whether you choose ERP vs CRM or vice versa, you must make sure that you pick your development partner wisely. Look for someone who understands ERP and CRM systems thoroughly and can help you with the same knowledge along the way.

At Narola Infotech, our 350+ enthusiastic experts excel in meeting your custom requirements with impeccable services and solutions. We leverage our industry knowledge and 18+ years of experience developing successful solutions for national and international companies.

If you are looking for guidance or development services for reliable CRM and ERP systems, feel free to reach out.