Difference Between CRM and ERP

In the context of digital transformation, CRM and ERP are among the most structuring tools for the company. Both make it possible to multiply the productivity of a company but while being different both functionally and in the departments of the company that they may concern. Between ERP and CRM, what are the differences? We tell you everything in this article.

What is CRM Software?

We are talking about CRM for Customer Relationship Management (or “customer relationship management” in French). CRM is the management of interactions between the company and its customer, from marketing to after-sales service, including the sales process.

A CRM strategy refers to all the means you can deploy to optimize each of your interactions, so as to maximize customer satisfaction. CRM software has established itself as an essential digital tool for creating an effective CRM strategy, with regard to modern standards.

Goals

The digitization process allows collect and analyze much more customer data than before. Thanks to CRM software, this data can be centralized and processed automatically. The power of this tool thus makes it possible to build a CRM strategy where the customer is at the heart of the process. In addition to customer management, a CRM is also very useful upstream. For the prospecting phase or to convert prospects into customers.

Well-processed data leads to the anticipation of desires, and the development of tailor-made offers. Likewise, technology makes it possible toestimate the best time and the best communication channel to use when contacting each customer. The key words of CRM software are: “automation” and “personalization”.

Features

The functionalities of CRM software are theoretically divided into three categories.

On the one hand, the collaborative functionalities concern the collection and centralization of data in the same system. Used by the various teams in charge of the CRM, this centralization facilitates communication. As a result, the synergy between the teams is improved, for a overall productivity gain.

On the other hand, the analytical featuress allow the data collected to be processed and translated into usable statistics (called KPIs). KPIs allow you to quickly measure the effectiveness of a CRM strategy. This allows you to adapt quickly, to rethink your strategy and not lose your customers.

Finally, the operational features make it possible to direct communication on different channels, simultaneously from the same platform. It is then sufficient to integrate the identifiers of its email servers, its social networks and its telephone application into the solution.

What is ERP or PGI software?

We’re talking aboutERP for “Enterprise Resource Planning” and PGI for “Integrated Management Software”. ERP software and PGI are two concepts designating very similar tools. These tools are based on a database shared by all departments of the company, whose function is to centralize different types of information.

Managing an ERP: software or software package?

ERP, “Enterprise Resource Planning”, is a document in which we list all the resources available to a company, in real time. This allows the administration and different departments to benefit from a global view of the state of health and the functioning of a company.

Technology today makes it possible to manage an ERP automatically. We are therefore talking about ERP software. But sometimes the term PGI is preferred. In some contexts, the term PGI is simply intended to Frenchify the expression designating the same tool.

However, if we want to be precise, it should be noted that a software package is not exactly software. The term “software” refers to a turnkey solution, ready to deploy on a computer or network. On the contrary, a “software package” is rather a modular system, whose integration into the company requires advanced settings, specific to its needs. The installation of a software package involves, in principle, the intervention of a technician or a specialized consultant. The best known ERPs are SAP, Zoho ERP and Oracle ERP.

Goals

In a structured and well-developed company, there are always different poles. They each have their own function, and above all their own work tool. For example, the logistics division has a tool enabling it to count stocks. The innovation department has project management software. And the marketing department has a CRM software … The same goes for all the other typical departments of a company: human resources, the financial sector, the accounting department, etc.

Each tool, from each department of the organization, uses a separate database. Gold, communication between these databases is not straightforward, if only because of different recording formats. This creates friction that hinders collaboration between the poles, and reduces productivity.

For example, in a normal situation, each sale should be communicated by the sales team to logistics via email. The latter should then identify each of these new sales by hand before processing it. This is where PGI comes in. ERP can automate this sales entry process.

Overall, an ERP can extract important data of all the company’s technical solutions and reformat them so that they are readable by all.

Features

In terms of functionalities, we find those relating to order management. The PGI will then ensure the automated transmission of information from the sales team to the logistics, from the logistics to the delivery service, and from the delivery service to the after-sales service. This makes it easier to order and deliver to the customer in the best conditions.

You can also find features related to inventory management. It is then the communication between logistics and the supply department that is automatedso as to anticipate the risks of rupture and respond to them as quickly as possible.

You can also find the functionalities relating to the monitoring of external service contracts. The PGI can then be used to communicate the quotes sent to the production team to the financial services. The latter will thus be able, more quickly, to choose to release the budgets and ensure the payment of the service providers in order to maintain good relations with them.

The question of the difference between CRM and ERP

Goals

Both CRM and ERP are used to centralize data in a common database. This essential function brings them together. Yet there is a difference in objective between CRM and ERP.

Indeed, the CRM concerns the management of the front office of the company by interacting on different channels with the customers. Its purpose is the maximizing customer satisfaction, and the reputation of the company. Everything that a CRM allows you to do can be seen from outside the premises: optimization of the schedules of an email campaign, fluidity and personalization of after-sales service or personalization of sales messages.

On the contrary, the ERP software concerns the back-office of a company. Its purpose is to optimize logistics costs. For this, it facilitates the transmission of data internally, between the different teams. Most of the beneficial effects of ERP software are invisible to the customer.

The type of users

If CRM and ERP both have the essential role of centralizing data, there is, in addition to a difference in objective, a difference in scale between CRM and ERP. Indeed, the CRM is simply intended to be used by the teams in charge of the front office : marketing, sales and after-sales service. ERP, on the other hand, concerns all areas of the company. Those in charge of customer relations, but also the rest of the departments such as human resources, the financial sector, or logistics must report the information that concerns them to feed the ERP.

In addition, unlike CRM, the‘ERP has executives and managers as end users. They can use it to see the big picture and direct an overall development strategy.

The complexity

In principle, there is a noticeable difference in complexity between CRM and ERP. THE ERPs are generally sold as “software”. They therefore require the intervention of a specialized technician, or a consultant, to be deployed in the company. Conversely, most CRMs, except the very sophisticated ones, are designed as turnkey software, easily installed for a neophyte.

The cost of software

We have therefore seen that theERP is a more complex tool than CRM, made to centralize data collected on a larger scale. It is therefore no surprise that the ERP, on average, is more expensive than the CRM solution. If the latter can cost less than €2,000 per year for a VSE, an ERP supposes having a budget of at least €20,000.

Company size

Finally, it should be noted that the‘ERP is only really useful for large companies. The organization of the latter must be divided into a multitude of departments, which experience real communication difficulties, so that the profit/investment ratio is positive.

Unlike ERP, CRM, meanwhile, should be used today by all companies, regardless of their size.

The choice of a CRM integrated with an ERP software?

If you represent a large company, an advantageous organizational solution is to choose a CRM integrated with an ERP. The fusion between the two software is more and more common.

This option allows to reduce installation costs. Indeed, the two solutions are from the outset designed to communicate data in the same format. This therefore implies not having to install additional modules to make them work in synergy.

For example, Microsoft Dynamics is a solution integrating both CRM and ERP.

FAQs

What are the benefits of ERP software?

The function of an ERP is to collect and centralize different types of information on the same platform. ERP also makes it possible to standardize this information, so as to make it more easily comparable or usable.

Among its main advantages, ERP makes it possible to better anticipate risks, to respond to a problem more quickly, and to increase the productivity of each division.

ERP also gives senior executives an overview, in real time, of a company’s resources and its state of health. This facilitates centralized management as part of an overall development strategy.