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Understanding the Difference Between CRM and ERP

Understanding the Difference Between CRM and ERP

By Flectra

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Starting out a new business includes understanding some basic terminology and if you are here, I guess you are a little confused about the difference between the CRM and ERP. For businesses, CRM and ERP stand at the silver lining of an organization. They are the sides of a single coin and have common grounds when seen from a higher viewpoint.

To understand their relation, it is important to understand CRM and ERP separately. Without a clear understanding of each of those terms, it is tough to understand the difference.

CRM(Customer Relationship Management)

Customer Relationship Management is all about customers. It revolves around customer data and tries to evolve into a utility that handles customer data in a structured manner. It collects every vital information that you need to know your customer. The most popular example of CRM is Flectra CRM.

The standardized method of collecting the information results in standardized data, which can further be used for generating sales reports, sales prediction, and also streamlining the customer’s discovery and their needs.

The CRM can be used vertically in the organization. The clerk, for example, can use the information to verify the addresses, send an invoice, or even send items to the prescribed delivery point. On the other hand, higher management can use the data to better know their customer preferences, habits, and much more.

CRM is great for customer retention and makes the customer the king. Many organizations have different needs and that's why customization is important. The most popular CRM, Flectra CRM offers Flectra CRM development, which can enable any organization to customize their CRM software.

ERP(Enterprise Resource Planning)

What CRM is to customers, ERP is to business processes. The focus of ERP is to evaluate the business and improve it to bring the best out of the business processes. It provides a centralized approach to different challenges and enables higher management to take a broad or hawkeye look at day-to-day activity.

With ERP, staff can get hold of information on various processes in the business, enabling them to understand the processes and fixing them before anything bad happens. The data saves them from any failure and hence creates a good feedback loop, improving the system in the long run. There are many good ERP providers, the paid ones include SAP, Microsoft, and the open-source ones include Flectra.

Different companies have different requirements and hence they opt for custom development. Flectra, being the best open source ERP solution, has the most demand for Flectra ERP development.

A Difference of Two Worlds?

Moving ahead, both CRM and ERP are inherently different from each other. The CRM of any business focuses on providing a streamlined channel to improve sales procedures. On the other hand, ERP focuses on optimizing the business process and hence reducing the overhead or any cost associated with the company.

Both of them have one aim, improving the business, and when seen from a scope of distinction, one aims to improve business sales and other aims to create a funnel for cutting overhead and cost-cutting.

Do You Need Both?

The answer depends on the scale of the business. A small business that is operated from the luxury of the couch would never need a full-blown ERP system. But the need for a CRM is a must one. You don't want to scatter the most important asset of the company from the start.

With some growth, you can opt for an ERP solution. ERP solutions are to improve business processes and automate them whenever possible. From a business point of view, you need to create an already optimized business process. Any unoptimized process can only harm its automation.

Understanding Both Are Important

CRM and ERP are important for any business. Running one without the other is like having a body without the heart or the nervous system. In this case, the heart corresponds to the ERP system which sends blood to different parts of the business, hence optimizing them for better functionality, and CRM is the nervous system, improving the blood flow to the body location.

In The End?

Creating a business is channelizing all the tools and resources in the right way. CRM and ERP, both compliment each other and should be a part of any business out there.

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