ERP vs CRM. Pros and Cons of Each System for Your e-Commerce Business?

Innovative tech progress lets modern merchants not only provide their buyers with a prompt e-Commerce journey but also bring their overall business management to a new level.

Lately e-commerce business has experienced a number of transformations. If you want to deserve entering competitive struggle, you cannot get along without a corresponding software that can help you automate your business management and improve its workflow.

Two of the most efficient software to justify this purpose are Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM).

What are their main functions and differences? Let’s discover it below in more detail.

What is CRM?

CRM or Customer Relationship Management is a system for managing your potential and current relationships and interactions with clients. The CRM software’s essential function is lead generation, which can be conducted with various CRM suite tools: social networks management, automated mailing, and marketing campaigns.

Once a new customer is established, CRM also captures, collects, and stores key customer data from multiple sales channels, like contact information, inquiries, and deals, helps build an all-encompassing customer profile, and supports subsequent interactions with clients.

In a few words, CRM is a useful tool to keep track of customer data in a centralized place and visualize sales cycles in real-time, revealing gaps in the sales funnel quickly and take measures in a timely manner.

CRM Pros

Here are some of the clearest advantages of using CRM:

• Automatical collection and management of client data in one place;
• Response time improvement and faster conversions;
• Optimization of routine tasks;
• Analysis of interactions between sales representatives and clients;
• Client behavior pattern identification;
• Possibility to timely determine failure in the sales funnel and timely react to it.

CRM Cons

Despite all mentioned above benefits, CRM still may have its pitfalls:

• Elimination of the human element in case of bulk mailings;
• Clean-up processes required to avoid messy data;
• Some CRM systems can be costly or have complicated user interface;
• CRM is pointless if used incorrectly;
• Probability of data loss in case of improper database handling.

What is ERP?

ERP stands for Enterprise Resource Planning. ERP is also a type of software that is focused on business workflow automation, but, as opposed to CRM, it covers the entire company departments, including accounting, HR, supply chain, procurement, etc.

While CRM mostly aims to manage interactions between sellers and buyers, ERP implementation facilitates a data flow between separate daily business activities, which significantly simplifies team cooperation and strengthens business performance.

So to put it another way, ERP is a global ecosystem. Therefore, only companies with large-scale production can take full advantage of such a solution, while ERP implementation into smaller businesses won’t be so cost-efficient.

ERP Pros

Here are the main reasons why you should consider implementing ERP into your organization, as this software:

• Enables getting a full picture of critical business metrics and improves decision making due to seamless data consolidation across departments;
• Allows team players to access data from any place and device;
• Improves customer satisfaction through analyzing data and accelerated report generation in real-time;
• Lowers operational costs due to applying best management practices;
• Eliminates manual intervention, minimizing risks of human errors;
• Facilitates precise planning of further development direction of a business.

ERP Cons

Even though the benefits of ERP implementation are undeniable, getting aware of all potential drawbacks of this software will never hurt:

• The necessity to make adjustments to your ongoing business processes to match ERP default settings;
• In case you need an ERP that will meet your specific needs, customization may be required;
• Depending on company size, ERP deployment and maintenance can be quite costly;
• Employee training takes time;
• If separate departments were reluctant to share their sensitive information, ERP effectiveness would be greatly diminished.

Conclusion

CRM and ERP systems are a must-have for any evolving business. CRM or ERP integration supports smooth interaction either between your company and your target audience or between your team departments, boosting your e-commerce growth.

If your main goal is to modernize your marketing strategies and sales flow, but your other activities are fine as-is, then you can opt for CRM without doubts.

An ERP solution, in its turn, will become a perfect match for those businesses that have already attained higher rates of development and need a more complex solution.

To justify the input and avoid all potential pitfalls of such integrations, you should weigh all pros and cons of each software, determine your current position on the market and visualize the future of your company — what will it be?

One more thing you can do not to choose the wrong direction is to hire an e-commerce consulting company, which will find the best way to approach your business processes competently and create an appropriate CRM & ERP software implementation plan.

Our Dinarys company works with the most popular CRM and ERP suppliers, and we will gladly implement one of them into your e-commerce business!