ERP vs. CRM: What are the differences?

One of the key factors in a successful business is creating and following specific processes. In the beginning, these processes may not look like much. You may track finances in a spreadsheet or schedule 30 minutes a day to manually email new leads. But as your business grows and time becomes increasingly precious, you need simple solutions to streamline your processes so you can give your attention to more demanding tasks.  

Enter ERP and CRM.

Enterprise resource planning (ERP) and customer relationship management (CRM) software help you collect and manage data and automate time-consuming manual tasks. While some of their benefits and features share similarities, each one ultimately has a distinct role in business. Knowing the function and advantages of ERP and CRM solutions can help you decide which one best meets your current needs.

What is an ERP?

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An ERP is business software that acts as a database to help manage company resources and processes. ERPs are often utilized to manage finances for accounting, payroll, and financial reporting. However, an ERP can also be used for inventory management, supply chain management, and human resources.

What is a CRM?

A CRM is software that collects and stores data about leads and customers and their interactions with your team. It is often used by customer-facing teams such as sales, customer service, and marketing to establish and maintain relationships. 

Similarities between ERPs and CRMs

CRM and ERP software can both help automate tasks, improve productivity, and streamline communication across your organization. Each one acts as a centralized location to collect specific data. Ultimately, these features are designed to help you boost your company's revenue.

Differences between ERPs and CRMs

While a CRM and an ERP both help automate business processes, they support different areas of your business. A CRM is designed to support customer-facing processes, while an ERP is focused on the back-end needs.  Some ERPs may be designed to offer certain aspects of a CRM, but CRMs typically don't provide ERP features. 

Features of ERPs vs CRMs

While no two software tools are exactly the same, many ERP and CRM systems share common features.

Features of an ERP

These essential features of an ERP can improve processes in accounting, HR, warehouses, and other areas of your business.

Automation of business tasks

Most ERPs allow you to automate tasks on a schedule. Instead of processing payroll every two weeks or remembering to send an invoice when new parts come in, the software can automatically do this for you.

Resource planning

Spend less time managing your supply chain by having your ERP system do it for you. The software can help track inventory, logistics, and distribution across multiple work sites. You can create automated commands that take care of tasks for you, such as ordering new inventory when your supply reaches a certain number.

Financial management

An ERP can automatically track and store financial data, including accounts payable, accounts receivable, budgets, and taxes. Automate accounting tasks so your employees can spend more time on higher-level tasks. 

Analytics and reporting

With all of the data you could ever dream of, you can compare performance over time, monitor your finances, and analyze almost every metric of your business— all in one centralized place. 

Project management

Supervise a project from start to finish and ensure everyone involved follows all of the necessary steps. Outline everything from the scope and sequence of the overall project to the specific tasks each person needs to complete. 

Features of a CRM

Strong CRM systems equip you with all the features and tools you need to build strong customer relationships and consistently deliver the best experience possible.

Reporting

Data is at the heart of every wise business decision. Reporting is vital in deciding the next steps of your sales and marketing teams. CRM reports can provide information about lead conversion, individual customers, employee performance, sales, and more.

Tech-savvy customer service

Interact with customers digitally through email, live chat, and social media. Having a CRM system, like chatbots, can quickly work with customers to solve minor problems or connect them with the appropriate department to help.

Sales metrics monitoring

Gain insight into employees' sales numbers, tasks, close rate, quota attainment, and more. Employees can use CRMs to manage projects and stay on track. Managers can utilize the data to write performance reviews and help employees identify the next steps in their careers.

Benefits of an ERP

An ERP is an invaluable tool for managing your business's back-end processes, such as inventory and finances. These ERP systems allow you to focus on and concentrate on internal business processes.

Less risk of human error

It's all too easy for a finger to slip when someone is entering amounts for your financial or inventory records. By automating processes, especially data entry and reporting, you reduce the risk of accidental errors that can occur with manual data entry.

Decreased administrative costs

Your finance team will no longer need to devote days or weeks to closing the books at the end of the quarter. An ERP can handle many of the low-level accounting tasks that tend to eat up time so employees can focus on more complex projects.

Improved collaboration

The collaborative nature of an ERP system prevents each team from becoming an island, isolated from the rest of the company. Shared, easily accessible data helps departments work together on overlapping projects. It also prevents the bottlenecking that can happen when one team has to wait for another to share pertinent information.

Customizable reports

Automated reports from an ERP can help you identify trends and track data in real-time, enabling you to make insightful decisions that propel your business forward. 

Better data protection

By using permission-based access, you can ensure that every individual has access to the data they need and none of the data they shouldn't see. Some programs will also allow you to monitor who accessed sensitive data to further reduce privacy risks. 

Benefits of a CRM

A CRM is key to effectively acquiring and retaining customers while providing an immense amount of customer satisfaction.

Improved customer service

Long gone are the days of the Rolodex. Storing customer data and profiles in a CRM helps all departments provide a more personal experience and meet the individual needs of each client to streamline operations.

Clearer sales pipeline

Identify exactly where customers are in the sales cycle so you know what steps need to be taken next. 

Increased customer retention

Thanks to all of the data that a CRM provides—such as purchase history and previous customer interactions—you can more easily segment and target customers. Client profiles and buyer personas allow you to further personalize communication with customers.

Increased productivity

A CRM can automatically track customer data you previously needed to enter by hand. In addition, the software can automate customer interactions. You can use it to quickly deliver live chat or send segmented marketing emails en masse.

When should you use an ERP vs CRM?

If you're trying to decide which software best meets the needs of your business, consider what your current goals and weaknesses are. Knowing where you need to go next can help you decide what vehicle will best help you get there. In most cases, the decision isn't ERP vs. CRM but ERP or CRM. Perhaps using CRM and ERP systems may be beneficial. One isn't inherently better than the other—it all comes down to which of your core business processes needs the most support right now. 

Use a CRM:

• to manage new customers or clients and move them through your pipeline.
• if communication within your sales or marketing team is lackluster.
• to manage a large and complex customer base.
• when you have an immediate need to market new items.

Use an ERP:

• to manage your current assets.
• if communication within your hiring, accounting, or supply departments is a challenge.
• if you manage inventory or work in the manufacturing field.
• for more effective communication across several business locations.

CRM or ERP system: Which One is Right For You?

Each type of software has a unique set of use cases. An ERP is invaluable when it comes to managing your finances and inventory, while a CRM is best for helping you build strong, personable relationships with customers and clients. Using both CRM and ERP integration is the most ideal way to cover all your business's needs and streamline just about every process you could think of.

Streak's CRM in Gmail helps you implement systems that simplify your workflow with custom pipelines for any process. A structured workflow saves time and prevents tasks from falling through the cracks, so you can rely on a system—rather than your brain—to keep track of everything you need to do.

Since Streak is so customizable, you can integrate it into just about every area of your business. If you're comparing ERP and CRM to meet the growing needs of your company, we'd be glad to help you see if Streak is a good fit for you.

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