Enterprise Resource Planning (ERP) is an enterprise wide solution whereby a company, often a manufacturer, integrates various departments such as planning, finance, budgeting, procurement, inventory, sales, marketing and human resources whereas Customer Relationship Management (CRM) is often used for building a relationship with existing as well as prospective customers, specifically focusing on customer retention and ultimately driving sales growth. CRM is also known as extended enterprise solution. ERP adds value to enterprise whereas CRM drives business. ERP integrates all back office functions whereas CRM is generally used by front office to meet demand chain. ERP is used by employees whereas CRM is used for customers.
ERP reduces cycle time, reduces operating costs, enables real-time & online decision making. It also manages business functions & processes, enables automation & integration, enables data & information sharing coupled with introduction of "best practices". CRM facilitate measures an organisation take to identify, target, acquire, retain its customers with the ultimate aim of optimizing revenue.
ERP supports quality & efficiency in the organisation, decrease operating costs, support decision making at all levels and brings in enterprise agility. CRM provides functional solutions in the form of direct marketing, cross-sell, delightful service standards, sales function automation and customer support. CRM aids in customization of products and services to the customers, including tracking customer contacts. Since ERP is an internal enterprise solution, it is not possible to know when customer left or reduced buying patterns as customers buy according to their wish. CRM is suitable to understand customer attrition pattern or formulate strategies to win-back attrited customers.
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