CRM Vs ERP: Understanding Their Meaning and the Difference.
11 October, 2021 by
CRM Vs ERP: Understanding Their Meaning and the Difference.
Ese Nikori


For companies to undergo a successful digital transformation, it is pertinent that some definite critical processes are in place. These processes include the implementation of CRM (customer relationship management) and ERP (enterprise resource planning) systems. 

A customer relationship management (CRM) software differs from an enterprise resource planning (ERP) system.

If your business is in various industry sectors such as Retail, Banking, Hotel, Financial Services, Insurance, Agriculture, Consulting etc it's very likely you will need to use a CRM and ERP system. You can request a demonstration by clicking here 

Even though a CRM and an ERP system are critical systems, they are very different. Business owners need to understand their meaning and the difference between them. 

The image below shows a summary of the differences between the two systems by outlining the main features/components of both. 

Is CRM Part of ERP?

In the illustration above, you would observe that an ERP system also performs CRM functions. This makes it all-encompassing.

A recent ERP case study indicates that 95% of businesses achieve considerable improvements after using ERP through reducing process times, increasing collaboration, and unifying enterprise data. ERP systems which include CRM, are an essential part of any company.

Companies use CRM to deal with customer issues fast and efficiently and to promote collaboration.

CRM Vs ERP: Differences Between ERP and CRM

The primary difference between an ERP and a CRM is their functionality. Although ERP covers CRM, it entails a lot more than that. Both the systems integrate the company's activities but ERP is more advanced in the sense that it is a complete package.

Some of the major differences are;

  • ERP enables integration between different operational departments and processes in a business.

  • CRM focuses on the customer experience while ERP focuses on streamlining a business as well as improving customer experience.

  • CRM primarily focuses on maintaining long term relationships while ERP aims not only at maintaining relationships but towards complete business integration and automation.

Many companies are unaware of the fact that implementing an ERP automatically covers CRM. If you need advice on how this works, contact us now to get a free business evaluation.  

Similarities Between The Functionality of CRM and ERP. 

As mentioned earlier, CRM is a part of ERP. This means that while they may have similarities, CRM may fall short in some aspects. Nonetheless, in many ways, CRM and ERP are in the same field and serve similar functions. 

1. Both help automate sales and marketing processes

2. Both provide a central database of information on customers and companies

3. They both perform analytics on data and forecasts

Do I need CRM or ERP or Both For My Business ?

Existing Business Owners are quite troubled with the dilemma on whether they need to deploy Customer Relationship Management or Enterprise Resource Planning software for effective functioning of their business.

In today's rapidly evolving business world, the need to stay ahead of competitors has become a major concern for most business owners. A major strategy used by businesses to gain an edge over their rivals is through technology. Many businesses have opted for sales force automation software to help them in sales efficiency and in improving customer service. 

A CRM tool is very powerful in helping organizations be able to provide more effective customer service. However, in terms of the number of functions involved, ERP extends beyond the bounds of a conventional CRM or a conventional ERP system. In its most comprehensive form, it does for business what a city-wide organism does for the human inhabitants of a region. Additionally, it provides an interactive interface between all of its constituents, and brings them under one umbrella.

CRM Vs ERP: Why Choose an ERP over a CRM?

For any business to succeed, it is important that all areas of the business operate and collaborate smoothly. 

An ERP system allows for the cohesiveness necessary in an organisation while still allowing each department to work at its own pace.

Every company needs a well built IT infrastructure to be productive, competitive and efficient. 

It is one reason companies are turning to the ERP system, which is one of the most effective ways of streamlining business processes.

An ERP system comprises multiple integrated applications called the components of an ERP system or modules. The system allows for automation within the company. It improves efficiency and accuracy. It offers a better ability to react to changes in the purchasing patterns of customers.

What Makes an ERP System Unique?

If you want to get a complete business integration without spending a fortune, an ERP system like Odoo ERP is the best option. ERP software helps companies of all shapes and sizes meet the challenges they face every day in managing their businesses.

ERP can be used by almost every kind of business, from small service providers to large-scale manufacturers. 

The software helps companies, regardless of the size, keep track of their products or services and the customers who buy them. The government employs ERP to take care of the city's or state's needs. Anywhere there is a business need for more than one application or process to be maintained, an ERP system comes in handy.

Click here to read how to choose the best ERP system for your business in Nigeria.

What is the ERP Project Life Cycle?

ERP Project Life Cycle is the process followed while implementing an ERP solution. It is not a single event. It comprises many activities which when executed in a sequential manner ensures successful implementation.

The entire project lifecycle of an ERP system is made up of a number of different phases and processes. In order to create a better understanding of what this process entails, it is important to realise that each phase is designed to bring the project closer to the completion that was established in the beginning.

A typical ERP installation is a large project with multiple components and typically a long time frame depending on the scope. It is helpful to view the installation as a series of stages based on the maturity of the executed business process. Each phase has its challenges and critical success factors. An understanding of phases helps in making each phase successful, visible and measurable.

The ERP project life cycle has six phases:

Phase 1: Investigation

The goal of this phase is to understand the business case for implementing an ERP system. Also taking note of other areas of business that requires improvement.

Phase 2: Selection

Selection is the process of reviewing the many alternatives to identify appropriate candidates. Odoo ERP offers a demo version. The Odoo ERP demo gives potential customers the ability to make decisions based on experience and not promises. Request a demo by clicking here.

Phase 3: Evaluation and analysis

Evaluation and analysis are the two most important phases of an ERP implementation. During the evaluation phase, your company evaluates ERP software packages to determine the best 'fit' for your business and also make decision on the desired package and features in an ERP system. While in analysis, you determine how to best implement processes in your organisation to work with your chosen ERP package.

Phase 4: Implementation

Implementation is a transitional stage between design and operation. It is a natural consequence of the design process rather than a phase in itself. Implementation means putting an ERP system into actual operation. The implementation phase is where development ends and operations begin.

Phase 5: Go-live

Go-live is the first day on which the firm begins using the new ERP system for production purposes. It is a crucial milestone in most ERP implementations.

Phase 6: Maintenance

Maintenance is the phase where you ensure the stability of the software application you are running. It can also be called support & maintenance or life cycle maintenance. The life cycle maintenance begins just after implementation. It continues until the system is replaced, upgraded or has been in use for years.

How to Implement an ERP System 

When implementing a new ERP solution, you need the right people, process and structure.

Getting all three right from the start is crucial to avoid costly errors further down the line.

Rely on our well-trained Odoo implementation team to guide you through every step in the setup process. Click here to read about us.

Rely on Odoo's advanced features such as inventory management, invoicing software, customer relationship management (CRM), sales pipelines and accounting. Feel confident that you have everything under control and go ahead with growing your company. 

Click here now to begin your digital transformation process with Odoo ERP.

CRM Vs ERP: Understanding Their Meaning and the Difference.
Ese Nikori
11 October, 2021
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