CRM or ERP software: How do you choose the right tool for your business?

Introduction

Turning the corner on digital transformation often means choosing between different routes, and CRM and ERP software commonly get in your way; while they point in the same direction (improving performance and supporting growth), they respond to distinct functionalities and challenges. So how can you avoid feeling lost and take the most appropriate path? Confusion between the two most widespread management software packages on the market is common, and can hinder their adoption: CRM or ERP, that's often the question! While these two types of tools share common objectives, their functional perimeters are quite distinct. Understanding the differences between CRM and ERP software enables you to deploy the tool best suited to your objectives... even if it means choosing both. In a nutshell.

‍CRMand ERP, what's the difference?

‍Definition ofa CRM

CRMs are customer relationship management tools that enable you to centralize all data relating to your customers and prospects, personalize and effectively manage your interactions with them, and optimize your marketing actions to ultimately maximize sales. By centralizing customer information in a single tool and analyzing it, marketing actions can be more easily identified and automated.

‍Definition ofan ERP‍

ERP systems are resource management software. They enable you to manage all your company's operational processes in a single, centralized system (logistics, sales, finance, human resources, etc.). By offering 360° visibility of your business, ERPs help to improve the productivity and efficiency of your teams, reduce costs and enable more informed decision-making.

CRM and ERP: the main differences 

A CRM solution can never offer all the functionalities of an ERP, and vice versa. By definition, the two types of software do not address the same issues: CRM software will focus on the customer/prospect and aim to increase sales, while ERP software will rationalize and plan company resources, in order to optimize costs. 

These challenges are met by different types of users:

• CRM software is a valuable tool for marketing, sales and customer service teams;
• ERP software is more likely to be used by executives, operational managers, HR, administrative and financial teams...

Finally, the deployment of these solutions does not come at the same cost: an ERP tool is more complicated to implement and more expensive than CRM software. The adoption of an ERP will be more justified for companies of a certain size, with complex operational processes (industry, commerce, logistics...).

‍CRMvs ERP: making the right choice

As you can see, the choice between a CRM or ERP tool depends above all on your company's objectives, the scope of your needs and the budget available:

• If you want to improve customer relations, support your sales force's activities and increase sales, a CRM like Salesforce is the right choice;
• If your priority is to rationalize and optimize your company's organization and reduce management costs, an ERP like SAP will be more effective. 

Good to know: Some hybrid software packages, such as Microsoft Dynamics 365 or Oracle Business Suite, combine the functionalities of both tools.

‍Complementary software

The combined use of CRM and ERP is often recommended, as their functionalities are so complementary.

Data collected by CRM software can be used to feed ERP software and improve resource planning and management based on customer needs. For example, if a customer orders a specific product, information about that product can be used to trigger an order for raw materials from suppliers, and to plan production in line with demand. Similarly, information gathered by ERP software, such as stock levels, open orders, production costs, etc., can be used to improve interactions with customers and provide them with more accurate information on delivery times, prices, available quantities, and so on. However, you'll need to ensure that data from the two software packages can easily communicate with each other, to support your streamlining efforts. You can choose to integrate your CRM and ERP tools into a single software package. Integrating a CRM with an ERP reduces the boundaries between different company silos, consolidates data in a single point and provides all employees with a global understanding of the business and your performance. ‍

Train your employees with Knowmore

The deployment of your CRM and/or ERP tools will only be effective if your teams understand the challenges and uses involved. Implementing this new software necessarily implies new working methods and new reflexes, and it's essential that your employees get on board if they are to reap the full benefits. 

Knowmore offers you customized solutions for rapidly training your employees in any type of web, CRM or ERP software used in your company. With our GPS application or e-learning authoring software, you can reduce training time and costs by +55%, and increase learnerassimilation by +200%!

Discover our onboarding solutions on Knowmore.

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