DIFFERENCE BETWEEN CRM SYSTEMS AND

ERP
Enterprise Resource Planning (ERP) and Customer Relationship Management
(CRM) are two sides of the same profitability coin. ERP and CRM are similar in
many ways, as they are both used to increase the overall profitability of a
business.
These systems overlap in some areas, and can be completely integrated in
others. However, as their core functionalities are completely different, its
best for a business to first look at them as separate, stand-alone systems.
When viewed separately, its easier to see how ERP and CRM each play a role
in improving efficiency and increasing sales.

WHAT IS CRM?
Simply put, CRM is a system for recording and storing all information related
to customer interactions. CRM systems like Salesforce andMicrosoft
Dynamics CRM provide a standardized method for collecting and sharing
customer data and cataloging customer interactions. Since all of the data is
standardized, its easily shared throughout the business. CRM can be used by
executives to create sales projections, by sales reps to maintain contact with
clients, by shipping clerks to verify addresses, and by the billing department
to create invoices. The goal of CRM is to provide a comprehensive store of
customer data that can be used to increase sales, improve customer
retention, and make customer relations more efficient.

WHAT IS ERP?
Where CRM is focused on the customer, ERP focuses on the business. ERP is
a system for improving the efficiency of business processes. Like CRM, ERP
allows for the rapid sharing of standardized information throughout all
departments. Executives, managers, and employees all enter information
into the ERP system, creating a real-time, enterprise-wide snapshot.
Problems in any area will automatically create alerts in other affected areas.
This allows departments to begin planning for issues before they become a
problem in that department. In short, by allowing the business to focus on
the data, instead of the operations, ERP provides a method for streamlining
business processes across the board. Popular ERP vendors like Epicor, SAP,
and Microsoft either also make CRM software, or their ERP solutions directly
integrate with CRM from other vendors.
A Distinction with a Difference
Though similar in effect, ERP and CRM systems use different approaches to
increase profits. ERP focuses on reducing overhead and cutting costs. By

making business processes more efficient, ERP reduces the amount of capital
spent on those processes. CRM works to increase profits by producing
greater sales volume. With a standardized repository of customer data, its
easier for everyone, from executives to sales reps, to improve customer
relations. In turn, those improved relations translate into increased brand
loyalty and profits.

CRM? ERP? BOTH?

Whether a business needs both systems largely depends on the size and
complexity of the business. Even for a small business, a CRM system is
better than a haphazard collection of customer data stored on hand-written
notes, in numerous emails, or, worse yet, contained solely in the head of a
sales rep. Customer relations are the lifeblood of any businessCRM exists
to keep that blood pumping freely.
ERP is an invaluable tool for streamlining complex business processes. Many
small businesses start in a single room or small office. All of the
departments may be within earshot of each other. At that point, software
that can provide a real-time snapshot of every department may be overkill.
As the business grows, the need for, and benefits of, ERP become clearer. If,
at any time, a manager or executive doesnt know whats going on in the
departments they are responsible for, the time for ERP has long since
arrived.

ASSIGNING IMPORTANCE
Deciding which system is more important is like deciding between having an
engine or having a steering wheel in a car. CRM is the engine that drives a
business. It improves sales and increases profits. ERP is the steering wheel
it allows a business to be guided with precision, and to steer around
obstacles well in advance. ERP and CRM working together make it much
easier for a business to increase profits while reducing costs.

WHICH COMES FIRST?

A business has to have processes before it needs to worry about streamlining
them. And it needs to have profits before worrying about cutting costs. The
most streamlined, efficient business in the world is still bankrupt without
sales. Thats why CRM is often the best bet for a businesss first investment.
Generating and maintaining sales is usually what makes everything else
possible. By helping to maximize sales figures, CRM can enable a business
grow to the point that ERP becomes a necessity.

MAXIMIZING GROWTH
Increased capital comes about in two ways: more sales or fewer expenses.
Using ERP and CRM systems allows a business to pursue both of these
avenues. The CRM system brings in more revenue through better sales

figures, while the ERP system reduces overall operating expenses. Together,
these systems can help a business pursue growth through efficiency and
expansion simultaneously. Used separately, ERP and CRM can still be very
helpful, but could potentially limit the business to a narrower avenue of
growth.

ASSIGNMENT

NAME: SANA NOORALLAH

ID: SP15-MB-0064
SUBJECT: CRM
SECTION:

TOPIC: difference between erp

and crm
SUMBITTED TO: SIR KASHIF
FARHAT
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