It’s no secret that CRMs and ERPs have literally exploded in popularity in recent years. The business software solutions have better prognosis than almost any other industry.
While there’s no doubt both types of software are incredibly useful for businesses, it’s often unclear what the difference between CRMs and ERPs is. This article will tackle the issue, as well as outline the advantages and disadvantages of each type of business software.
Keep reading to find out all about CRMs and ERPs.
What are CRMs and ERPs?
CRM stands for customer relationship management, while ERPs represent enterprise resource planning.
However, that doesn’t tell us much about the software itself. What do CRMs and ERPs exactly do?
Well, CRMs help businesses organize their contacts, their customer information and create a better overview of the entire company. It provides all company employees with real-time data about their customers.
This allows businesses to better understand their customers and customer behaviours. In turn, this lets companies create highly targeted and specialized marketing and sales campaigns to increase their revenue from both existing and prospective clients.
On the other hand, ERPs help organizations better manage their internal processes. They help identify weak points, streamline and optimize the existing business operations.
In other words, CRMs focus on client-centered processes, while ERPs help with employee-oriented tasks.
How to choose between CRMs and ERPs
While they may share the same goals – creating a better work environment and generating higher revenues – CRMs and ERPs rarely use the same methods. This is why it’s not uncommon for large corporations like Amazon to use both CRMs and ERPs in their organization.
However, if you’re a small to medium business, you likely don’t have the resources necessary to run both a CRM and an ERP. This means you’ll need to choose whether to purchase CRM or ERP software.
To help you find the best solution for your business, we’ve created the following questionnaire. Read through the questions carefully and try to answer them honestly.
- What is your budget? Money talk may not be pleasant, but it’s essential for choosing the business software. If you’re budget is limited, you may need to choose a CRM solution, since they’re usually somewhat cheaper.
- How many employees do you have? Depending on your company size, it may make more sense to go for one of the two types of software. If you operate a small business, CRMs are generally the better option.
- What are your business goal? This is arguably the most important question. Before you select any business software, you need to outline your strategic goals. If you want to optimize existing processes, ERPs are the way to go. If you want to acquire more clients, CRMs are likely the better solution.
- What are your expectations for the business? In case you expect your business to enter a period of exponential growth, an ERP will be far more useful than a CRM.
- Do you have any weak points in the current organization? If you’ve already noticed that your underlying business processes are performing suboptimally, you should go for an ERP system.
These five questions will help you determine whether you need CRMs or ERPs.
However, once you decide what type of software your business needs, you’ll have to choose a specific CRM or ERP system.
How to choose the right CRM or ERP system
Now, before we explain what you need to consider when choosing a business system, it’s important that you understand that the choice depends entirely on your business structure and your personal preferences.
When you’re researching potential solutions for your company, keep in mind that each software must have all the essential features and functions, such as:
- Customer databases
- Task and project management tools
- Membership levels
- Support for mobile devices
- Professional customer support and onboarding process
- Data reports and analytics
- Powerful integrations
- Free trial version
If your preferred system doesn’t offer all these options, we suggest that you look elsewhere.
In case it fulfills these basic requirements, we recommend that you explore whether it offers mobile apps for Android and iOS devices, whether it integrates well with other CRMs and ERPs (in case you ever decide to switch between systems), as well as check if the system offers any niche-specific modules for your business.
It’s highly recommended that you create a shortlist of a few systems that you particularly like. This will come in handy when you decide to test the CRM or ERP systems through free trials.
Now that you know what CRMs and ERPs are, what the difference between them is and how to choose the right system for you, it’s time for you to start researching all the options.
If you want a simple, yet flexible CRM system that integrates well with a variety of tools, we recommend Simply CRM. However, remember to always test the software with a free trial before making any long-term commitments.