Difference Between ERP and CRM


ERP and CRM are very important aspects of any organization which are similar in nature but suited to different purposes. They are software that enable employees of an organization to share information to coordinate activities in the organization. These applications also allow the executives to take decisions based upon the reports and forecasts generated from these tools. Difference between ERP and CRM is a confusing one, even for those who are making use of these wonderful tools, and with vendors selling both, it is better to fully understand the implications of both these tools.


ERP stands for Enterprise Resource Planning, and it is software that streamlines internal functions of any department of an organization. This tool allows for smooth flow of information about various activities such as accounts, HR, administration and production. ERP keeps employees aware of facts and information cutting across departments such as supply chain management, production management and account management.

There comes a time, when it becomes difficult for an organization to increase sales by 5% and it is easier to cut down on expenses by 5%. Cutting wastes is a process which is as good as revenue generation by increasing sales. ERP comes in handy if this is the objective of the organization by streamlining all the processes.

While ERP’s were earlier used by big organizations only as they were costly, with passage of time, newer versions have come into existence that are suitable for even small companies. When ERP is into operation, employees across all levels can get access to information from a central repository. This leads to better efficiency and smooth operations with fewer errors. For management, ERP gives a clear insight into the health of the organization, and they can take better decisions to improve efficiency and productivity.


CRM stands for Customer Relationship Management and is as helpful for an organization as ERP. As the name implies, CRM is a tool that is customer oriented and has to be managed and used by marketing and sales department. This is the department that takes any organization to the outside world. CRM allows sales personnel to manage information about all the existing and prospective customers which they can use to build better relations with tem. CRM as software makes available maximum information about customers which is critical for any company as it can be analyzed to develop better relations understanding the needs of the customers.


Now, a layman would jump and say how can ERP and CRM be related when ERP is to be used internally and CRM externally only. However, there is some overlapping in functions and today there are cases where CRM has been effectively integrated with ERP with the central database level.

For example, maintaining leads with a website is a vital part of a CRM. If it is integrated with ERP, availability of any product is known easily thus allowing the product to be displayed on the site. Also, customers can be promised delivery of products accurately if CRM is clubbed with ERP. With passage of time, most organizations are buying both ERP and CRM and clubbing them together for a better supply chain and for more customer satisfaction.