Differences Between ERP and CRM

Abhishek Bhandari

July 10, 2022
Last updated October 14, 2022

Enterprise resource planning (ERP) and customer relationship management (CRM) are the two main software solutions that businesses use to automate fundamental business procedures (CRM). CRM helps organizations manage how customers interact with their enterprises, whereas ERP helps companies run successful operations by integrating their financial and operational systems into a single database.

Both are important data storage locations. Both cover a wide range of areas, and while they are occasionally designed on the same platform, the software is frequently purchased independently and merged as needed.

Key Differences between ERP and CRM

CRM (Customer Relationship Management) is a software solution that allows business owners to keep track of all conversations and cultivate connections with leads and clients. A CRM replaces the jumble of spreadsheets, databases, and apps that many firms use to keep track of customer information. As a result, there was more organization, efficiency, and better time management, as well as satisfied clients. Software companies began to merge all of these disciplines under one framework, known as customer relationship management, through acquisition and development.

ERP stands for enterprise resource planning, and it is a sort of software that businesses use to handle day-to-day operations like accounting, procurement, project management, risk management, compliance, and supply chain operations. Enterprise performance management software, which helps plan, budget, predict, and report on an organization's financial results, is included in a complete ERP package.

CRM's fundamental objective is to provide a central repository for all customer data and to track all customer interactions. ERP, on the other hand, stores all financial and operational data in a single, shared database.

While both ERP and CRM systems will grow to be used by the entire organization, the essential distinction between the two is that ERP is primarily for financial data and is used by the finance department, whereas CRM is for customer data and is utilized by the sales and customer service departments. The former is known as the back office, while the latter is known as the front office.

Similarities between ERP and CRM

ERP and CRM are both commercial software that use a relational database to store and analyze data. Both are available as on-premises software or as software as a service (SaaS), in which the vendor hosts the software in its own data center and users access it via the cloud.