How is CRM different from ERP?

Organizations willing to automate various business processes implement CRM (Customer Relationship Management) or/ and ERP (Enterprise Resource Planning). CRM helps the company manage customer relationships with the business at every touchpoint to increase customer satisfaction. In comparison, ERP helps connect financial and operational departments to once centralized servers. 

This article highlights the differences between the two and will help you decide which would benefit your business.




A business has multiple departments like finance, marketing, HR, operations, etc. ERP provides a common platform for integrating all these departments to communicate smoothly, and data is transferred seamlessly between these departments. Traditionally this was known as MRP (Materials Requirement Planning), which was the process to evaluate the resources required for a business to succeed. EPR evolved from MRP in this digital era.

Integration of departments is in addition to automating business processes that ERP helps. ERP helps centralize the data, increasing the efficiency of workflows between the departments. It is a shared database that has the data for all the departments.



Benefits of ERP:

  • ERP gives a shared database to the organization, accessible by the required stakeholders of all departments. When it comes to monthly or quarterly data reporting, teams need not ask each other for the data. This saves the time lag to receive data from IT or the Finance department, as they already have the data loaded in a common platform. Hence this saves a lot of time and increases ease of functioning between departments. 
  • ERP is very beneficial to the finance department. At the end of every financial year, the finance team closes the account book and calculates the investments and the income of different departments to see the total profit made by the company. Since using an ERP, the financial data is already collected and recorded at one place, their job becomes more accessible and is done quickly.
  • ERP facilitates easy collaboration between the different departments. This increases communication between employees and keeps them highly engaged in their work. The data present in ERP as it is centralized also gets updated in real-time, which helps to make better business decisions.


CRM is a platform that eases customer interaction with the company. Earlier customers interacted with the organization only via phone calls, but that is not enough for both the company and the customers. Customers’ expectations have now increased; they want prompt replies on all platforms; hence a call centre is not enough. It is now called a contact centre which provides multiple channels and touchpoints for customer interaction to meet their demands. 

Integrating multiple customer service platforms helped develop the Customer Relationship Management Tool (CRM). Developing a CRM platform is also beneficial for the organization, especially for the Sales and Marketing department, to understand the customer and boost sales. It will help to understand the entire customer journey and what are the factors that are helping to bring more customers to the business and stay loyal to the brand.


Benefits of CRM:

  • Businesses can make better decisions that are aligned with the customers. Using CRM, they will know what type of customer behavior is increasing their revenue and what is causing them losses. This will help them focus on customer value-adding activities and retain them for a longer time.
  • CRM helps to create customized marketing campaigns. As it tracks the customer data and can measure different metrics using the customer data, this will help optimize the campaign and focus on the audience or the areas helping them achieve higher targets.
  • Because of a centralized CRM platform, communication increases with the customers at all hierarchical levels. As every customer data is tracked, it increases the transparency between the organization and its various activities; employees can know because of whom or because of which decision did the sales increase or made the customer happy.

Both the platforms of CRM and ERP store a lot of data and provide a centralized platform to the bank to carry out different business activities. They can be integrated with the cloud, which will make the platform even better. 

However, the difference lies in the purpose of these two platforms. While CRM is focused on customer interaction and is more beneficial for Sales and Marketing teams, ERP integrates all the company departments. Thus the centralized data helps all the departments. 



Which of them should an organization use?

Companies need to decide which of these two should they implement in their organization, as both come with their benefits and different purposes. If the organization wants to retain its customers and boost sales, it should focus on a CRM platform because it would help them increase customer satisfaction. Whereas if an organization seeks to increase the efficiency and productivity of their functioning, then they should implement ERP. 

However, if any company wants, they can use both ERP and CRM in their organization to combine the best of both platforms at the cost of extra expense. 

Implementing ERP and CRM will allow all front and back-office departments to operate together. When cross-selling or up-selling, a sales professional, for example, will need access to a customer’s data and history. Similarly, the finance department will need a pass to compute sales commissions and contribute to the payroll. Furthermore, this integration will provide management with a more comprehensive picture of all departments, planning pricing strategies and analyzing various KPIs.


Configuring, pricing, and quote (CPQ), another crucial business activity, requires a tight CRM & ERP connection to access data from both systems. Many major CRM and ERP suppliers can provide you with prebuilt connectors to make the process smoother. 


Check out Techbox 7’s range of ERP & CRMs


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