Enterprise resource planning (ERP) software and customer relationship management (CRM) software are often mentioned in literature and advertisements about enterprise computing. Although these two software solutions work toward the same purpose, they use very different approaches.
CRM software refers to a collection of programs that are aimed at improving sales. CRM software is usually designed to:
- Automate parts of the sales process, such as sending maintenance reminders or thank you messages
- Collect customer information
- Create databases of customer information that can be analyzed for marketing and forecasting purposes
- Foster better communication between people within the sales department
In short, CRM software sees focusing on the customer and increasing sales as the key to a successful business.
ERP software focuses on the business process and the sharing of data between departments. ERP software helps a company lower the costs of production and squeeze more efficiency out of a business. Therefore, ERP is a much larger solution that must be integrated across the different divisions so that, for example, the sales data feeds into the production goals, which then feed into the financial projections, and so on. ERP software may contain a CRM component, but it will likely be less complex than a dedicated CRM solution.
ERP and CRM software solutions are usually compatible with one another. Which one a business chooses depends wholly on the business. A smaller business with few divisions may be best served by CRM software to help grow sales, whereas a larger business may go with an ERP, or both, to handle sprawling operations and sales outlets.
Put simply, ERP and CRM software both try to improve a business, but CRM focuses on the customer and increasing sales, whereas ERP focuses on processes and reducing costs.