ERP and CRM – What’s the difference?

Best Practices

ERP and CRM systems are both incredibly useful tools for businesses. They have a lot of similar capabilities and help business owners manage their data and processes more effectively. However, there are some key differences in what they’re designed for, and using the right tool for the job is essential. But what is a CRM system? What is an ERP system? And could you use one or both systems in your organization? For many businesses, the issue of whether to use an ERP vs. CRM isn’t a clear-cut one. There could be a business case for using both types of systems. 

What Are the Differences Between an ERP and CRM?

Stylized question mark about ERP and CRMThe main differences between an ERP and CRM are their focus on business elements. CRM software does exactly what its name suggests, dealing with managing customer relationships. In contrast, ERP tools attempt to improve the efficiency of business processes by enabling automation. A CRM may sometimes include automation tools, and an ERP may perform some CRM tasks, but each tool generally has a specific focus.

What Is a CRM?

A Customer Relationship Management (CRM) platform is a tool used to manage customer interactions. These platforms are sometimes referred to as sales force automation platforms. They hold customer records such as contact details, where the customer is in the sales funnel, the information logged by salespeople and issues they may have raised if they’re already customers. CRM tools are mostly used by sales and customer service staff for the purposes of sales tracking and forecasting, lead management and customer interaction monitoring.

The key features of a CRM include:

  • Lead tracking tools
  • Support/query tracking systems
  • Subscription management
  • Sales funnel management
  • Email communication tracking
  • Reporting

CRM software can vary from simple tools for sending invoices and tracking issues to far more sophisticated platforms capable of managing multiple interaction channels with different interfaces depending on whether the user is responsible for handling sales, complaints, billing or other areas of customer interaction.

The main focus of a CRM system is customer-facing. They’re used for sending and tracking communications. There may be some overlap between ERP and CRM platforms in terms of automation. For example, some CRM platforms have tools for monitoring subscription payments and sending reminders when a customer is due to renew their membership. However, CRM platforms focus on “the customer,” whereas ERP software takes a broader view of the business.

Popular CRM Examples

Businesses have a huge number of CRM platforms to choose from today, including Salesforce, HubSpot, Zoho CRM and Insightly CRMWhile each of the major CRM platforms aims to be versatile and could be employed by brands from any number of industries, they each have clear target audiences in mind.

For example, Salesforce is an enterprise platform that can be extended and customized by developers but has a relatively steep learning curve and is priced for Fortune 500 companies. Zoho CRM is less flexible, so it’s easier to simply pick up and use but may not scale to suit a growing organization. HubSpot is a great all-in-one tool for micro and small businesses, but carries a risk of outgrowing it sooner rather than later.

Insightly CRM is designed for mid-sized businesses across all industries. The platform includes workflow automation, contact management and tracking, email management, quote generation, and project management features to help brands build relationships, and sell at scale.. These features help salespeople maximize their efforts by building relationships with the right decision-makers in each organization. Both B2B and B2C organizations can use Insightly’s metrics and reporting, giving leaders the data they need to make data-based decisions about their future sales and marketing efforts.

What Is an ERP?

ERP stands for Enterprise Resource Planning. The purpose of an ERP platform is to streamline a business’ day-to-day operations, including everything from managerial tasks to logistics. There may be some overlap between ERP and CRM tools in terms of customer service tasks, but ERP covers many other areas of business operations. For example, ERP software may include human resource management, order processing, accounting and supply chain management.

An ERP platform is a central system that manages an organization’s processes and the flow of information between departments. It helps managers understand what is going on within a business and also helps team members communicate more effectively. 

Some important features of ERP software include:

  • Integrated tools for managing a variety of tasks within an organization
  • Many ERP systems are delivered as Software as a Service (SaaS), offering web and mobile interfaces for ease of use
  • Powerful reporting features to help managers monitor processes and resources
  • Tools for scheduling and time management, supply chain management, inventory and other areas of the business

Where a CRM platform is used for interacting with customers, ERP software takes a more backend role. However, both ERP and CRM platforms have an important role to play in an organization’s growth and success.

Do I Need an ERP and CRM?

ERP and CRM Stylized graphicWhether your business could benefit from a ERP or CRM depends on the type of business you run, how you interact with your customers or clients and how large your business is. For example, if you have a team of salespeople or deal with a lot of customers/clients across multiple channels, you may find a CRM platform useful. If your business relies on long-term, repeat customers and you want to give them a smooth experience, a CRM platform helps you track each customer’s interactions with your brand.

Your organization may benefit from ERP software if you already use software to manage business processes but feel that software with more of a financial management function is needed. . Large, global enterprises often choose ERP software when they have complex resource or inventory management needs or multiple, large  departments that need a way to ensure they can communicate effectively while keeping accurate financial records.

Some businesses may have a use case for CRM software but not ERP. Others may make the opposite decision. However, in many cases, both software solutions have a place in a growing enterprise, and when they’re used together effectively, they can offer significant productivity and cost savings.

Can an ERP and CRM Work Together?

Yes, many ERPs can integrate with CRMs, either in the form of data imports/exports or via an API. Most CRM platforms offer some options for getting data out of the platform and using it in third-party tools. The software you chose determines how easily your business can do this and whether it can process your CRM platform’s data without an intermediate step to convert it.

With some platforms, the process is simply a matter of generating and providing API keys or other credential tokens. With others, you may need to use a plugin or custom extension to get the two platforms to talk to each other. 

Benefits of ERP and CRM Integration

Choosing an ERP and CRM that can integrate effectively with each other will make your workflows vastly more efficient. You’ll be able to take advantage of all-in-one resource management, reducing data duplication and the risk of errors that can come with holding data in multiple places.

Some other benefits of ERP and CRM integration include:

  • Time savings for team members across the whole enterprise
  • More efficient communication between team members
  • Simplified and more accurate information sharing
  • Easier automation of frequently repeated tasks
  • More streamlined workflows for common tasks

When ERP and CRM software are used in isolation, they become data silos. This leads to duplicated data and potentially duplicated efforts, as updates made to customer records in the CRM platform don’t make it into the automated ERP systems. When the two platforms are integrated properly, this facilitates communication between departments, increasing the business’ efficiency and improving the service customers receive.

ERP and CRM integration also helps business leaders get deeper insights into their organization. By combining the data from the two applications, leaders can generate detailed reports and analyze their business processes in a way that wouldn’t be possible with just a subset of that data. Integrating the two platforms streamlines the flow of data between them and provides access to actionable information that can greatly improve the business’ efficiency.

Insightly ERP Integration Capabilities

Insightly offers both out-of-the-box native integrations and integrations through AppConnect, so it can connect with all popular ERP platforms to help you take advantage of the strengths of both platforms more effectively.

There’s no need to install third-party plugins or have developers build integrations that may require updates should there be a new release of either platform. With Insightly’s integration features, your ERP and CRM will work together smoothly, unlocking the reporting features and additional data your team needs to communicate and work more efficiently.

If you’d like to know more about how Insightly CRM can streamline your sales and customer service, or how the ERP integration features could improve your other business workflows, contact us today for a demo or sign up for a free trial to see Insightly’s  powerful features for yourself.