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Tech Insights 5 min read

What is the difference between an ERP and a CRM?

Oh, the big question — essential, inevitable, but sometimes a little bit complex to answer. It’s, without a doubt, one of the most asked by our clients in meetings.

For a lot of us, the difference between ERP (Enterprise Resource Planning) and CRM (Customer Relationship Management) software is difficult to distinguish at first, and this is why we’re taking the time to explain it to you today. We know that it can all be confusing.

But you should know that they are the opposite on every level (or so), and if you need an ERP, you do not necessarily need a CRM system and vice-versa. The technology, and the way it evolves, can enable you to make more with your company, on the condition that you know it well.

This is why you need to know everything about the differences between ERP and CRM systems to understand theirs subtleties, usages, but also the points where they complete each other.

What's An ERP Software?

An ERP solution is a resource planner like nothing else. To say it plainly, it will increase your revenue, reduce your expenses, optimize your business operations, and ensure the efficiency of each business process. Does this sound a little bit like magic? That’s just the beauty of technology!

An ERP software, being a resource planner, will offer you centralized management for better decision-making. That way, its utility can be mainly found in the processes of your company. This is a big difference between ERP and CRM system.

What Does It Do In Concrete Terms?

An ERP can help you:

  • Enter data and find it instantly everywhere where it counts in your system: from inventory to orders;
  • Optimize your departments and their organization, such as inventory management, supply chain management, human resource management, etc.
  • Connect every department to automate the activities flow
  • Manage your enterprise in a centralized way from a unique database.

That way, an ERP can help you worry less about each step, each detail from each order, and instead have a global picture of the situation to make better decisions in the long term.

Do you want to know more about ERP solutions? Read our last article "What is ERP software".

When entrepreneurs come into our offices, we often see them buried under a ton of simple and repetitive tasks that prevent them from putting in place a long-term strategy for their company. The technology of an ERP that is well adapted to your needs will offer you the ability to automate these tasks and better evaluate what is wrong and what works well in your company in general.

⬇ If you recognize yourself in this portrait, it’s because you need an ERP. ⬇

And the CRM in all that?

The CRM, unlike the ERP platform, has nothing to do with your business process and production, but rather the marketing campaigns and customer service sides of your company. As a manager of your customer relations, it will help you refocus on them.

Let’s be clear, if there are no sales and no potential customer to buy your products, you could have the best CRM software in the whole world, and you'd still be looking at a failure in the end. Since you always need a constant flow of clients and improve your customer satisfaction rate, managing your customer interaction is essential.

What does a CRM solution do?

  • Centralize your customer data
  • Support in new client acquisition
  • Nurture existing relationships with personalized customer experience
  • Optimize sales activities
  • Analyze the data, the behavior, etc.

As you can see, the main difference between an ERP and CRM is that the latter is looking to improve and ease the management of your customer relationship while working to increase your sales and optimize business operations. Due to its unique database and a cutting-edge analyzing system, your CRM platform will help you make better choices for your company's future.

Want to know more about a CRM system? Read our last article "What is a CRM system?"

By storing all the customer data at the same place, you will get a better picture of the situation by being able to identify specific behaviors from each geographic area, activity, level of interest, etc. You will have all the needed information to make informed marketing campaigns, and adopt adequate sale strategies that work.

And ERP or CRM software doesn't stop there in terms of services!

Depending on the CRM or the ERP system that you select, you can have access to different functions to complete your solution and tailor the software to your company. In your ERP, you could use, for example, a module dedicated only to human resource and recruiting that would gather all the data about your employees in a database, and let you optimize their time and skills.

It’s also possible to add a field service management module to your ERP to help you better use your resources and your workforce when they are deployed outside the walls of your factory or warehouse, whether they are in the field or working directly with a client.

On the other hand, a fully integrated CRM can also include a module dedicated to marketing, for example. Having all your clients’ information in a database can be smart to adopt those types of functions for all the customer data and nourish your strategies.

There are also management project functions that can be added to your CRM sometimes. By gathering all the data, by allowing you to integrate your management directly into one program, it’s far easier to collaborate, have a global vision, and have access to the precious data you need to complete projects.

The New Generation of Microsoft Dynamics

The interesting thing about a solution like Microsoft Dynamics, is that you can have an ERP that includes a CRM. Yes, you've read that correctly: Dynamics CRM is integrated into Microsoft Dynamics 365 Business Central.

Besides using the most popular and well-renowned applications like Microsoft Office, Outlook, or Microsoft Teams, you can really center your operations, whether they are about inventory management or customer service, on the same Microsoft Dynamics solution.

This suite of applications has been specifically created to optimize your operations and support your company. This way, all the modules flawlessly communicate with each other, and there's no need to spend many hours creating customized links to make your CRM and ERP system work together.

You'll find on the cloud everything you need to manage your company, optimize, and generate more sales: an Office suite, CRM applications (marketing, sales, customer service, project services, field services), and ERP applications (financial management and HR, finances and operations, supply chain and fabrication).

You'll also find Power BI and an IoT suite—the analysis service for your company from Microsoft—a ton of extensions, customizable modules, and adaptable solutions for your industry. All of this is hosted on Microsoft’s powerful and trusted cloud, Azure.

So‌ the difference between ERP and CRM is pretty easy. Remember that CRM is for your clients, and your ERP system is for your resources. Then, you'll be able to distinguish them better and target your true needs on the matter. If you ever feel overwhelmed with repetitive tasks and daily management, consider choosing a global solution like Dynamics 365.

Contact us to learn more about the solutions we offer to support you in your change!

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May 13, 2021 by Frédéric Charest VP of Marketing

Data-driven Growth Marketer with a Passion for SEO - Driving Results through Analytics and Optimization