ERP and CRM respectively stand for enterprise resource planning and customer relationship management. Both of these systems are associated with software packages that can help businesses of any size collaborate more effectively, make more informed decisions, reduce operational costs and work more efficiently with the help of automation. While ERP focuses on helping your business integrate its operational processes and present important data in a single place, CRM specifically assists with maintaining strong relationships and communication with customers. Understanding the features that CRM and ERP offer can help you decide if these systems fit your company's needs.


CRM in full form is customer relationship management, while ERP stands for enterprise resource planning.

ERP Meaning and Uses

Enterprise resource planning (ERP) refers to the techniques and software a business can use to facilitate or even automate its daily processes including accounting, manufacturing, marketing, customer service and inventory management. This kind of system helps keep your company's data from these different processes in one place where managers and employees can easily use it, keep it current and share it between departments or teams. ERP programs can run on your company's computers or in the cloud, and they often include specific modules for each business function. You can use ERP software to perform tasks such as see a real-time picture of your company's finances, automate product ordering processes, monitor employee performance, manage payroll and view sales metrics. Some popular ERP systems include PeopleSoft, SAP ERP and Sage 100 ERP.

CRM Definition and Uses

CRM, which means customer relationship management, is a specific system for keeping track of customer information and interactions for marketing, sales and customer service purposes. In some companies, CRM may be integrated as an ERP module rather than as a standalone program. Your business can use CRM software to keep an up-to-date list of contacts, manage leads, help forecast sales and track the company's social media sites. Another common CRM feature is the ability to communicate through email and instant messaging with customers and staff. You can even use CRM software to manage marketing campaigns and create customized dashboards showcasing sales analytics and customer activity. Common CRM platform options for small businesses include Salesforce CRM, Zoho CRM and HubSpot CRM.

Benefits of ERP and CRM

Both ERP and CRM can help your business be more productive and reduce operational costs. In addition to automating common tasks, they make it easier for your staff to collaborate and access important data. Due to their real-time reporting capabilities, both tools help workers stay informed of finance, sales, customer service and production information and facilitate business planning. Both tools can also help your company scale more easily since the customization options make them suitable even as your company grows. CRM specifically offers the additional benefits of improving communication with customers and potentially increasing sales as your company learns to better meet customer needs.

Disadvantages of ERP and CRM

While small businesses can get significant value from ERP and CRM, there are some drawbacks to consider; especially in regards to cost and configuration. Software packages can be cost-effective for small companies that do not plan to use many of the features. For example, if you own a small business with 10 employees and no formal departments, then you may not need a fully featured ERP application to collaborate. Likewise, if your company does not sell products to customers or focus heavily on marketing, you may not find a CRM program worthwhile. In addition to considering cost and suitability, you should consider the amount of configuration and customization required to make the systems valuable. This labor can take time away from performing key business tasks unless your small business has a dedicated IT professional or hires additional help for the process.