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In simple language ERP and CRM appear lot similar but both of these are software applications developed to fulfill different purposes, there is more difference between ERP and CRM than similarity. ERP is modular application which is designed for automating different departments of any organization like finance, production, purchase, sales and distribution, human resource, logistics etc and to integrate them with single software so that any department can see and access information across entire organization. This software is to enhance functioning of the organization, reduce cost of production to increase profit margins. ERP is organization-oriented, it organize the work in a way which increases productivity and efficiency of the company. On the other hand CRM is software application which focuses on increasing sales by better customer management. The tools in this application are developed for keeping track of possible customers, existing customers, reorder, order status, customer complaints and queries etc, in short it is a single system which combines sales, marketing, contact management and customer support. The basic difference between ERP and CRM is that CRM gives insight to the sales people for generating more business while ERP gives insight to executives and management to increase productivity. These two applications appear similar because they serve similar purpose, increase profits of the company. But the big difference between ERP and CRM lies in their approach to serve their purposes. CRM increases sales, it helps in analyzing and identifying more opportunities for increasing sales and developing new buyers and market. More sales directly increase profits of the company. ERP on other hand also increase profits but by reducing cost of production, if cost of production gets reduced by 5% through efficient working, better utilization of human and other resources of the company it reflects as rise in profits by 5%. So the basic difference between ERP and CRM is that ERP helps in managing employees and increasing productivity while CRM helps in managing customers and increasing sales. Difference between ERP and CRM is clearly evident with the fact that CRM can function in far better way with ERP. This happens because company using ERP has all the information available in single database about entire organization and access can be granted to authorized users of CRM to see this information. Availability of crucial information related to customer like his credit limit, payment performance, availability of stock, exact delivery date etc can make CRM even more effective in generating business from the market. Information available with CRM related to customers and also their suggestions and feedback can be supplied to the management for taking decisions. The data supplied by CRM can be of immense help to the management for upgrading their product or services as ERP allows changes intended by the management to be incorporated quickly through entire organization. So, both of these applications working in tandem can be very fruitful for increasing profits and growing business of any organization. CRM and ERP do overlap these days as certain modern ERPs have modules which deal with external entities like suppliers and banks but still these applications have well cut out task and purpose. Read about Difference Between ERP And CRM. Also know about CRM For FMCG. Read about What Is CRM Best Practices.
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