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The difference between ERP and CRM

With so many acronyms to juggle as a business owner, it’s easy to get confused, which is why we’ve produced a guide on the difference between ERP and CRM.
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Prime examples of the many enterprise acronyms to memorise include GDPR, EIS and SEIS for starters, but what exactly is the difference between ERP and CRM?

ERP stands for enterprise resource planning and CRM stands for customer relationship management. You’re probably thinking that they sound like classic corporate jargon – something akin to solutions provider, right? The difference between ERP and CRM are quite significant, however.

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ERP

ERP is a way of managing business processes, generally with software from third-party service providers. Back office tasks the technology can manage include time and attendance, finances, logistics, project management and more, serving companies across all sectors.

Gartner recommends that businesses can expect benefits including IT cost savings, efficiencies and innovation, given that executives will have more time to look at other aspects of the business strategy to result in lucrative and creative outcomes.

Priority Software is an example of an ERP specialist. With over 8,000 companies signed up as clients, the company offers cloud-based support or on-site installations.

Elsewhere, Microsoft Dynamics 365 is another ERP service, which promises “big growth for big businesses”. The total ERP tools package from the business is said to “provide global scalability and digital intelligence to help you grow at your pace”.

The racing arm of Renault is one such business using Microsoft and singing its praises.

“Microsoft technology runs our business,” said said Cyril Abiteboul, MD of Renault Sport Racing.

“Dynamics 365 for Operations provides the backbone infrastructure for the Renault Sport Formula One team, supporting everything from design to manufacturing to our success on the race track.”

The difference between ERP and CRM in value

The ERP market is growing at a steady pace, according to Statista. The size of the ERP software industry was valued at $82.1bn globally in 2015, which is set to hit $84.98bn in 2020. As it stands in 2017, the market is worth $82.9bn.

Meanwhile, the global CRM software revenue forecast from Gartner produced a figure of $31.7bn for 2016, which is expected to grow to $36.5bn this year.

On the other hand, it could be argued the difference between ERP and CRM isn’t quite as significant, as software providers package up CRM as a form of ERP.

CRM

The difference between ERP and CRM is that the latter is solely for marketing and customer service purposes, while the former encompasses all business processes – hence why ERP includes CRM.

However, CRM is a commonplace process that’s used by many – and with good reason.

“The age of the customer is not about customer-centric thinking or ‘the customer is always right’,” said Kate Leggett, VP and principal analyst at Forrester.

“Instead, the new power of customers means that a customer focus now matters more than any other strategic imperative.”

The research firm considers CRM to be “a fundamental component of the business technology agenda to win, serve, and retain customers”. Salesforce and SAP are among high-profile service providers.

In its Global Business Technographics Software Survey 2016, Forrester found that over half of business software decision makers had introduced CRM. Almost two-thirds had introduced a customer service function, while 56 per cent had focused on automated sales.

Amazon was highlighted as a company that does CRM considerably well, particularly as it never comes into physical contact with customers.

“I can do so much with Amazon without talking to anybody, that for as long as they continue providing a good experience, I will continue buying from them,” said Brent Leary, president of CRM Essentials.

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About Author

Zen Terrelonge

Zen Terrelonge is the deputy editor of Real Business, specialising in media, innovation, technology and the digital sector. A media professional with eight years worth of experience he has worked for both startup and established publications.

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