CRM versus ERP: what are the differences?

What is a CRM system?

A CRM system is designed to help companies manage and improve their relationships with customers. It focuses on supporting sales, marketing and customer service, with the ultimate goal of providing a better customer experience and increasing revenue.

Key features of CRM:

• Customer data management: CRM systems store extensive customer information, including contact details, purchase history and interactions. This makes it possible to better understand customers and respond to their needs.
• Sales optimisation: Sales teams can use CRM tools to manage leads, track sales opportunities and optimise sales cycles.
• Marketing automation: Many CRM systems include tools to plan campaigns, personalise them and analyse the results.
• Customer service management: CRM systems help companies manage customer queries and respond quickly, increasing customer satisfaction.

Case study: Suppose a sales representative at a software company has a meeting with a potential customer. Through the CRM, he can immediately see what previous interactions there have been and which software modules the customer finds interesting. This allows him to personalise his pitch, increasing the chances of a sale.

What is an ERP system?

Whereas CRM focuses on customer relationships, an ERP system focuses on internal processes. The aim of ERP is to integrate and automate business activities so that all departments within an organisation work together more efficiently. Think finance, HR, logistics, production and inventory management.

Key features of ERP:

• Financial management: ERP systems provide tools for accounting, budget management, and reporting, which is crucial for making strategic decisions.
• Inventory and supply chain management: Companies can use ERP to gain real-time insight into inventory levels, logistics processes and delivery schedules.
• Production planning: For manufacturing companies, ERP offers extensive opportunities to streamline production processes and deploy resources efficiently.
• HR functionalities: From payroll to employee scheduling, ERP systems help manage employee data and HR processes.

Case study: A manufacturer uses an ERP system to manage raw material inventory, plan production capacity and coordinate shipping processes. Real-time insight allows the company to operate more efficiently and save costs.

What are the main differences between CRM and ERP?

Although CRM and ERP may overlap in their aim to improve business processes, they have different focus areas and applications. Below are the main differences:

• Target: CRM focuses on improving customer relationships, while ERP focuses on optimising internal processes.
• Users: CRM is mainly used by sales, marketing and service teams, while ERP is deployed by departments such as operations, logistics, HR and finance.
• Functionality: CRM supports customer-focused processes, such as sales and marketing. ERP focuses on process optimisation and integration of business activities.
• Cost: CRM often has lower initial costs compared to ERP, which requires a larger investment.
• Flexibility: CRM is ideal for specific customer-facing tasks, while ERP is more broadly applicable across multiple departments.

Overlap between CRM and ERP

Some ERP systems include basic customer management functionalities, but these are often less comprehensive than those of a specialised CRM system. Conversely, some CRM systems offer limited tools for processes such as invoicing, but are not designed for complex operational tasks such as production planning.

When do you choose CRM?

CRM is the best choice for companies that want to better understand their customers, drive sales and improve the customer experience. It is particularly suitable for companies in sales-oriented industries, such as retail, services and B2B companies with complex customer relationships.

Ideal situations for CRM:

• A company wants to manage and track sales opportunities more effectively.
• Marketing campaigns need better personalisation and analysis.
• Customer satisfaction is a key focus.

When do you choose ERP?

ERP systems are ideal for companies that want to integrate and automate many internal processes. It is particularly suitable for larger organisations with complex operational workflows, such as manufacturing companies, logistics companies and wholesalers.

Ideal situations for ERP:

A company wants to get a grip on complex processes such as production or logistics.
Different departments need to work better together and share data.
The organisation is growing rapidly and needs scalable solutions.

Can you combine CRM and ERP?

Combining CRM and ERP offers companies the best of both worlds. CRM ensures optimal customer focus, while ERP streamlines internal processes efficiently. Many companies choose to integrate both systems to improve both external and internal processes.

Practical example of integration: Suppose a sales team registers a new order via CRM. The ERP system automatically incorporates this order into inventory and production planning to ensure smooth delivery.

Conclusion

CRM and ERP are powerful tools that can help companies achieve their business goals. While CRM focuses on customer relations and sales, ERP emphasises internal efficiency and process optimisation. The choice between the two systems depends on your company's specific needs and goals.

Looking for no-obligation advice? Contact us today on to discover how we can improve your business processes.