CRM vs ERP – What are the differences? Part 2: ERP Software

Posted on 29 Jan at 12:59 pm

The IT industry is full of acronyms. Even the industry name itself, meaning information technology, is an acronym. People who work in technology tend to throw them around assuming people know what we are talking about. Two of these are CRM and ERP, two types of software that Synergy Technology specialises in, but what do these terms mean?

The simple answer to this question is customer relationship management and enterprise resource planning, clear? No, I thought not! If you are looking at a software solution to simplify your business processes, you probably want to know what they actually mean, and more to the point, which one is going to be of most benefit to your business.

Part 2: ERP Software

In part two of this 2-part blog post we are going to look at ERP software, what it is, what job functions in an organisation might use ERP software, what the main features and key benefits of ERP software to your business.

You can read part one of this two-part series here: CRM vs ERP – What are the differences? Part 1: CRM Software

External Customers vs Internal Resources

To understand what makes these types of software solutions different, we must first look at the differences in focus between the two types of software, customers and resources.

Customers and are external to the company; they are how the company generates the income it needs to succeed and prosper. As such, CRM is mainly concerned with recoding and processing customer and prospect data and recording interactions with them.

Resources are the internal tools and building blocks needed to ensure the company’s processes run smoothly and efficiently. Equipment, stock, premises, working capital and even employees are all resources.

What is ERP?

ERP stands for Enterprise Resource Planning. It’s a type of software solution that helps businesses manage and integrate various aspects of their internal operations. Think of it as a central hub that connects different departments and processes within a company. An ERP system is designed to automate various business functions, such as finance, human resources, inventory and supply chain management. Examples of ERP systems include Microsoft Dynamics 365 Business Central and Pegasus Opera.

Who Uses an ERP System?

ERP systems are used across various departments and job functions within an organisation. It tends to be mostly those with the responsibility of managing internal processes, such as finance and accounting, human resources, operations, warehousing & supply chain.

Main Features of ERP Software

An ERP system helps businesses manage their core internal business processes. It’s essentially a suite of integrated applications that covers various aspects of a company’s operations, here are some of the features that are common across the main ERP systems on the market:

Financial Management

Finance is the lifeblood of any business, and all ERP systems will allow you to manage finances in some form. There are a lot of different aspects to financial management, some of the main ones are:

General Ledger: Tracks financial transactions, including debits and credits, to maintain a detailed record of the company’s financial position.
Accounts Receivable: Manages customer invoices, payments, and credit terms to ensure timely collections.
Accounts Payable: Processes vendor invoices, payments, and discounts to optimise cash flow.
Cash Management: Monitors cash balances, bank reconciliations, and cash flow forecasts to maintain liquidity.
Financial Reporting: Generates various financial reports, such as income statements, balance sheets, and cash flow statements, to provide insights into the company’s performance.
Budgeting and Forecasting: Creates budgets, tracks spending against budgets, and forecasts future financial trends.

Human Resources

A businesses most important internal resource are its people. Human resource functionality includes employee information, payroll, benefits, time and attendance, and performance management.

Employee Data Management: Stores and manages employee information, including personal details, contact information, employment history, and emergency contacts.
Time and Attendance: Tracks employee hours worked, overtime, absences, and leave requests.
Payroll Processing: Calculates and processes payroll, including deductions, taxes, and benefits.
Benefits Administration: Manages employee benefits, such as health insurance, retirement plans, and time off.

Supply Chain Management

Supply chain modules in ERP software are designed to optimise the flow of goods and services from suppliers to customers. Some of the key features are:

Purchasing: Manages the procurement process, including vendor management, purchase orders, and receiving.
Inventory Management: Tracks inventory levels, locations, and movements to ensure optimal stock levels.
Warehouse Management: Manages warehouse operations, including storage, picking, packing, and shipping.
Transportation Management: Coordinates transportation activities, including carrier selection, route planning, and freight management.

Project Management

Project Management modules in ERP software are designed to streamline project planning, execution, and monitoring. Some of the key features commonly found in project management modules:

Project Planning: Defines project scope, objectives, deliverables, and timelines.
Task Management: Breaks down projects into smaller tasks, assigns responsibilities, and sets deadlines.
Resource Management: Allocates resources (e.g., personnel, equipment) to projects and tracks their utilisation.
Cost Management: Tracks project budgets, expenses, and forecasts.
Time Management: Monitors project progress against timelines and identifies potential delays.

Key Benefits of ERP Software

Enterprise Resource Planning (ERP) software can greatly improve the efficiency of your internal business processes and offers a wide range of benefits for businesses of all sizes. Here are some of the key benefits you could get from implementing a new ERP software solution:

Improved Efficiency and Productivity

Streamlined Processes: ERP systems automate many manual tasks, reducing errors and improving efficiency.
Real-time Data: Access to up-to-date information enables faster decision-making and better resource allocation.
Centralised Information: A “single source of truth” eliminates data silos and ensures consistency across departments.

Enhanced Decision-Making

Data-driven Insights: ERP provides valuable analytics and reporting for informed decision-making.
Predictive Analytics: Forecast future trends and anticipate potential challenges.
Improved Planning: Optimise resource allocation and inventory management.

Better Customer Service

Improved Order Management: Streamline order processing and reduce lead times.
Enhanced Inventory Control: Prevent stockouts and improve customer satisfaction.
Real-time Customer Information: Access customer data quickly to provide personalised service.

Increased Financial Control and Compliance

Accurate Financial Reporting: Generate comprehensive financial statements and reports.
Improved Auditability: Streamline financial processes and enhance compliance.
Enhanced Risk Management: Identify and mitigate potential financial risks.

Scalability and Flexibility

Growth Accommodation: ERP systems can easily scale to support business growth.
Customisation Options: Tailor the system to specific business needs and processes.
Integration Capabilities: Connect with other business applications for seamless workflows.

Cost Savings

Reduced Manual Work: Automation eliminates time-consuming tasks and reduces labour costs.
Improved Inventory Management: Optimise stock levels and reduce carrying costs.
Enhanced Efficiency: Streamlined processes lead to increased productivity and reduced operational expenses.

Increased Competitive Advantage

Faster Time-to-Market: Streamline operations and bring products to market more quickly.
Improved Customer Satisfaction: Deliver better products and services to meet customer demands.
Enhanced Decision-Making: An ERP system will help you to make data-driven decisions to gain a competitive edge.

The Differences

So, as you can see, CRM and ERP software solutions offer very different features and benefits, but both can be useful tools to increase the efficiency and productivity of a business. Whether it’s increasing the effectiveness of your sales and marketing function to drive more sales or streamlining your internal processes to cut costs and allow you to serve your customers more efficiently, a business software solution is a key tool for giving modern businesses a competitive advantage.

The Synergy Technology Difference

The team at Synergy Technology are amongst the best, most experienced people in the industry in terms of successful CRM and ERP software deployments.

You will get a team who will work in partnership with you to ensure your business application delivers real, meaningful benefits, driving strategic change and improving efficiency. You will be looked after by a team that truly cares, is completely transparent and delivers exacting solutions every time.

We’ve been at the forefront of business software solutions for over 25 years and have worked with hundreds of businesses in a range of industries, so are well placed to help and advise you at every stage of your journey.