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Difference between CRM and ERP

in this article we're going to take a quick look at the differences between two extremely popular types of business software CRM and ERP, now both CRM and ERP offer powerful tools to boost your organization's profitability some CRM and ERP features actually overlap and many systems are integration compatible with one another some ERP systems even include lightweight CRM or CRM like features but there are major differences between the core principles and functionalities of CRM and ERP so in this article we'll explore those differences and what they might mean for your business.


what is CRM?

CRM stands for customer relationship management CRM is specifically designed to increase sales from both new and repeat customers, it's also designed to improve customer relationships by enabling you to create a consistent high-quality experience for both customers and prospects,.


basically CRM is about improving your ability to connect with prospects and then ensuring timely reliable consistent and quality service as those prospects become customers better customer relationships create loyal customers and loyal customers increase your long term profitability.


so put simply CRM gazes outward to where your team interacts with customers and prospects and CRM is therefore especially useful to your sales support and marketing teams, a well implemented CRM system can help your team improve response time, pursue new leads and opportunities more effectively, create automate evaluate and iterate marketing campaigns, standardize and streamline the sales process, analyze customer interactions and purchasing patterns, facilitate consistent high-quality customer support and automate repetitive tasks.


what is ERP?

ERP stands for enterprise resource planning ERP is designed to improve the efficiency of your business processes to reduce overhead and cut costs but while CRM focuses on prospect and customer interactions ERP focuses on all aspects of your business and while CRM focuses on boosting sales ERP focuses on reducing costs increasing visibility and streamlining processes so whereas CRM gazes outward ERP gazes inward at what your team is doing and how efficiently they're doing it.


ERP can therefore benefit any division in your enterprise properly utilized ERP can help your team enter and track real time business process information within and across departments, it can alert team members when issues elsewhere in the company might affect them, can help you plan department and enterprise level strategy based on enterprise wide knowledge, it can help you process orders update accounts and trigger automatic alerts to fulfill and build those orders, can help you manage manufacturing and supply chains while creating records and alerts at every step in the process it, can help you track recruiting and hiring initiatives, and it can help you manage payroll benefits and personal information for your employees.


so the big question for most businesses becomes CRM or ERP if you're choosing between the two there are three main factors to consider needs, investment, and scale there are a lot of similarities between CRM and ERP but each serves different needs.


CRM is built to boost raw sales numbers while ERP is built to reduce the cost of each sale


CRM systems also tend to be much cheaper than ERP systems so while neither is a small investment ERP is typically a much larger investment and finally both systems scale very differently


CRM tends to provide proportionally greater benefits to small and medium-sized businesses with room to grow and forge a boost to raw sales numbers can be a big-time boon ERP on the other hand provides proportionately greater benefits to large complex organizations for which a cost-cutting efficiency driven system can scale well enough to provide potentially huge returns on your investment


of course those larger and organizations aren't likely to turn their noses up at increase sales or anything so many organizations use an integrated CRM and ERP system and the good news is even if your business isn't ready to take full advantage of the air up here now you can always start with CRM and then integrate with a compatible ERP when you're ready for example Microsoft Dynamics 365 for sales which is a CRM system integrates seamlessly with Microsoft Dynamics NAV an ERP system and you can do.

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