# Business development
CRM vs ERP – What’s the difference?
Red Rocket teamJul 2, 20245 min read
In This Article
Key takeaways What is CRM? Key differences between CRM and ERP What is ERP? Choosing the right systemWhen a business starts to grow, it becomes difficult to manage it using regular Excel spreadsheets - there are many routine operations and data can be lost. There arises a need for a smart program that helps to control performance, automate sales and hiring, forecast revenue and solve other management and strategic tasks.
You have probably heard about CRM and ERP software, but not all people know the differences between them. We at Red Rocket will help you understand which business management platform to choose in order to improve the efficiency of your enterprise.
Key Takeaways
- For well-organized work within the company it is recommended to implement both CRM and ERP.
- Having CRM makes it possible to simplify and automate the work of managers with clients of the company. ERP is created to help the management of the company with other business processes.
- CRM is needed at any stage of the company's existence, even if you have a small flow of customers.
What is CRM software?
CRM programs are specially developed software for use within a company by its employees. As a rule, managers work in such software. CRM systems are used to manage sales, marketing, and customer support departments.
CRM (Customer Relationship Management) is divided into two categories: Classic - a program to automate sales, allowing you to optimize routine processes, keep track of customers and store all the history of interaction with them in a special contact card. Advanced - more than a classic sales system. This is a corporate portal that allows you to control the efficiency of each department, manage tasks and projects, schedule meetings, store data, communicate with employees and programmatically customize the system to meet any needs. Among the most popular CRM software examples, we can highlight the following:
- amoCRM.
- Pipedrive.
- Bitrix24.
- Creatio (Terrasoft).
In what cases and at what stages of a company's development do you need CRM? In any business and at any stage (even if there are few clients and employees), when there are sales or it is necessary to organize the work of several departments of the company with the subsequent integration of all popular microservices in a single place.
Key Benefits of CRM
To make a choice between ERP and CRM, you need to analyze the benefits of each software. We suggest starting with the benefits of CRM systems for business owners.
- Customer information is always close to you. Obviously, the CRM stores all the key information about your customers. Name, phone number, email, order information, invoices and much more can be viewed at any time in the app.
- Sales script. Another good thing is that here, you can prescribe the sales scenario you want yourself. For example, you prescribe the following algorithm: a request comes to the site, the manager needs to call the client, then send a commercial proposal, call back again and agree on deliveries, draw up a statement and an invoice, and send them to the client.
- Takes care of routine tasks for you. Customer Relationship Management helps you save not only your money but also precious time on routine tasks. A business owner does not need to constantly set the same type of tasks for employees. The system itself can make reminders to managers, make mailings, and many other functions.
- Simplified work with documents. Nobody likes to spend a lot of time working with documents, so you can enter the necessary templates into the CRM. The system will independently generate the necessary documents for each transaction based on the template. Moreover, the software for customer management can itself put the signature of the manager who deals with the transaction into the document.
- Statistics and report generation. It is possible to build almost any kind of reporting in CRM. Manipulations with figures are also excluded - the report is made by the system itself, not by a person. You can study general statistics on all employees, the performance of a particular person, and the number of deals at different stages of sales.
As you may have already realized, CRM programs have quite a lot of functionality and help business owners make their employees' work much more efficient. A great option is to create a custom CRM software that can 100% meet your needs and desires. We, the experts at Red Rocket, are ready to provide CRM system development services that will meet your requirements.
What is ERP software?
Enterprise Resource Planning (ERP) is an organizational strategy for integrating production and operations, labor management, financial management, and asset management. It is focused on continuous balancing and optimization of resources ERP is a system for business process management that integrates and manages finance, supply chain, operations, reporting, production, and human resources. It is often integrated with CRM system, where the latter acts as a web interface. There are also cases when business owners choose 2in1, as in the case of Odoo, which combines the functions of a warehouse and CRM. Which ERP software companies are the best known?
- BAS ERP.
- SyteLine.
- SAP.
- DeloPro
ERP is well suited for enterprises and organizations that need to control finances, personnel, production, assets, and supply chains. Many directors confuse these concepts and mistakenly order a custom CRM instead of Enterprise Resource Planning solutions.
Certainly, if we talk about the cost of ERP system, it depends on many factors. The main thing that affects the final cost is the number of people in the company who will be connected to the software. Statistics show that a normal ERP system can cost tens of thousands of dollars for a medium-sized company.
Key Benefits of ERP
There are still many people who don't know why they need to implement ERP solutions in their company. We have compiled the key benefits that Enterprise Resource Planning software provides:
- Resource accounting. All production capacities and inventories are recorded in ERP, as well as turnover records. The system makes it convenient to determine and control delivery dates and volumes.
- Logistics control. You can manage logistics, both internal and external, and control sales in ERP. If everything is set up, ERP will send a message to a specific employee at the right moment with a forecast of resource consumption or an alert about resource shortages.
- Personnel accounting. Another benefit of such programs is related to personnel accounting. ERP keeps track of human resources, calculates work schedules, and monitors the number of hours worked. This allows the director to calculate the workload and see if there is a need to hire new employees.
- Documentation. With the help of such a system owners keep records and generate the necessary documentation, automate routine operations with documents, for example, create contracts.
- Bookkeeping and finance. Generally, finance and accounting are feared by directors, so specialized software will come to the rescue. Using an ERP application, they keep accounting and tax records and monitor the financial state of the company.
In simple terms, the functionality of ERP solutions aims to improve internal processes that are not directly related to sales. For example, production tasks or logistics problems.
Key Differences Between CRM and ERP
It is not quite correct to compare CRM and ERP: the first option is a system for automating and controlling sales, and the second one is a system for managing resources and business processes in an organization.
In CRM you start working at the stage of an application and gradually bring a person to the stage of a deal and repeat sales. ERP begins to work at the stage of the transaction - when you need to fulfill the received order, ship products, and analyze the financial state of the company. Although there is no clear classification. CRM developers sometimes embed ERP elements into their programs, and CRM is often one of the blocks that can be easily used in ERP systems.
Choosing the Right System
There is no universal answer to the question «what to choose between ERP and CRM». The final choice depends on many factors. Among the main points, we can emphasize the peculiarities of business processes, the number of employees of the firm and your main goals. ERP is useful if your company is focused on improving the efficiency of production departments and logistics, if you need to reduce production costs, order fulfillment time and increase output. This solution will be relevant for those companies that have their own production, a large number of employees, and several departments.
Choose CRM as a helping platform when you have started to get regular sales. If you see that keeping records in Google Docs or Excel is already hard, it's time to move to a CRM. In most cases, CRM is used in the e-commerce industry. As we've said before, the best CRM systems allow you to do much more than just communicate with your customer.
Generally speaking, if your business is no longer small, it is worth considering implementing both CRM and ERP into your company's operations. Ideally, every business should have a custom app for internal use. Feel free to contact us to develop the perfect app that will meet 100% of your requirements and as a result increase the efficiency of the company.
