CRM vs. ERP: Differences and What to Choose | Intellectsoft

June 24, 2024

Customer Relationship Management (CRM) and Enterprise Resource Planning (ERP) are both crucial systems for any business, regardless of size.

Zendesk, a pioneer in customer service solutions, simply states that these systems become indispensable as organizations develop:

"Given enough time and growth, most organizations will need an ERP and a CRM."

But what do these 3 letter acronyms actually mean? How do they ensure the success of your business?

There’s little disagreement regarding CRM and ERP use in the business world. Approximately three-quarters of all businesses employ an ERP system to interact with customers in real-time, while two-thirds adopt a CRM within their early years.

These numbers mean that both technologies are widely adopted and also signal recognition of the strategic value inherent in such systems.

Each addresses different aspects of operations; yet when used together, they create powerful leverage for any company's progression in terms of efficiency, scalability, and competitive edge.

What is a CRM?

CRM, short for Customer Relationship Management, refers to the systems designed to keep track of a company's engagements with current and future customers. CRM systems act as a central hub where all customer-related information is stored, making it easier for businesses to nurture their relationships with clients.

With CRM software in place, repetitive tasks are automated, which allows employees to focus on providing higher-quality service. This enhances the efficiency of processes from marketing campaigns right through to sales activities and after-sales support.

By keeping detailed records of customer interactions, CRMs provide valuable insights that help tailor communication and services precisely matched to client needs. The ultimate aim is to foster stronger connections with customers by being relevant and responsive – attributes known for driving loyalty and repeat business.

Effectively employed CRM tools enable organizations not just to manage contacts but also to make strategic decisions based on solid data analysis. Such informed decision-making can lead directly towards more successful outcomes both internally within operations management as well as externally regarding market presence.

The Benefits of a CRM System

Implementing a CRM offers several key advantages for business:

Elevated Customer Support: CRM tools act as an aggregate for customer information from both outside and inside the organization. Information is consolidated into one accessible platform, which allows for a more personalized service experience.
Boosted Sales Performance: Analytics information provided by the CRM means sales teams can identify promising leads and trends with far greater precision. When focusing on these prospects, they greatly increase the chances of turning inquiries into profitable outcomes.
Improved Customer Retention: Access to trends analysis performed by the CRM provides valuable insights into consumer behavior. A business may utilize this knowledge to retain its client base, and also increase brand loyalty.

What is an ERP?

Enterprise Resource Planning, better known as ERP, is a comprehensive software platform that helps businesses manage and connect the many facets of their operations.

Think of it like the central nervous system for a company's data and processes. It brings together finance, supply chain management, operations, reporting functions, manufacturing capabilities, and human resource tasks under one roof.

The key aim of having an ERP system is to break down silos between departments. By allowing free-flowing communication within an organization, and with its business partners, ERP ensures everyone has access to up-to-date information they need when they need it.

This kind of coordination can significantly boost decision-making abilities as you have all your actionable data in one accessible spot.

Additionally, by streamlining workflows and automating certain administrative tasks through this centralized approach, companies often find marked improvements in efficiency and productivity.

ERP also plays an important role in helping organizations keep pace with compliance requirements set by various regulatory bodies. Tasks are made simpler when all relevant info is easily reachable within a unified system.

The Benefits of an ERP System

ERP systems unify multiple aspects of a business into a single interface, which simplifies many day-to-day operations:

Cost Efficiency: Streamlining processes and reducing the costs of administration and operations with an ERP leads to significant savings.
Improved Productivity: Naturally, when all tools used by the business are integrated into one single system, efficiency and productivity are greatly enhanced.
Better Decision Making: An ERP system provides operational data in real-time, meaning strategic planning and decision-making can be made based on accurate and consolidated information.

CRM vs ERP: The Key Differences

The major difference between CRM and ERP systems lies within their core function in the business:

CRM focuses primarily on the “front-end” or “front-office”. It manages the interactions with customers and sales prospects across various communication channels.
ERP, in contrast, focuses on integrating “back-end”, or internal information across the entire business.

This CRM vs ERP table illustrates the difference between ERP and CRM more clearly, and compares the typical use cases for each system:

ERP vs CRM: Exploring the Similarities

At their core, ERP and CRM systems serve as pivotal instruments for organizational achievement due to a shared foundation in several key areas:

Centralized Data

CRM and ERP stand out for their ability to bring data under one roof. This centralization provides data for decision-makers who need current and uniform information across all business units.

Efficiency in Operations

Streamlining internal processes with ERP and CRM systems creates an environment where time-consuming tasks are automated, teams work cohesively, and the overall machinery of your company operates without unnecessary friction.

Insightful Reporting

In terms of analytics with ERP vs CRM, both types of systems provide powerful reporting utilities that peel back layers on operational dynamics and customer engagements. These insights are fuel for developing forward-thinking strategies that align with both market trends and resource allocation.

Productivity Enhancement

At their essence, ERP and CRM tools increase customer engagement, but ERP platforms orchestrate resource management. Both paths lead toward elevating organizational productivity, not incrementally but significantly.

Integrating CRM and ERP

Combining your CRM and ERP systems has the potential to revolutionize your business operations by bringing together customer interaction and internal processes.

To ensure a successful integration, it is essential to follow steps that will align activities, data, and processes throughout your company with the two separate systems.

1. Prepare for CRM and ERP Integration

Begin by establishing a plan that clearly outlines your objectives. Set the boundaries for integration and determine beforehand the specific data to be exchanged between the two platforms. Develop an analysis detailing the effects of the transition, on existing procedures.

2. Keep Data in Sync

All data between the two platforms needs to be synchronized. Use specifically designed tools and middleware that can automate and check this ongoing process and reduce data duplication during the ERP and CRM integration process.

3. Align Workflows

Creating an integration between CRM and ERP systems requires outlining procedures that cover areas in both platforms. For example, order fulfillment and customer service.

The aim is to establish operations that eliminate the need for input, in transferring data or finishing assignments.

4. Testing and Validation

Before the launch, make sure to examine the integrated systems. Confirm that data moves smoothly between CRM and ERP systems and that all processes are working correctly. Testing in real-life scenarios is crucial at this point in order to identify any integration issues before the integration goes to production.

5. User Training and Support

Once the two systems are successfully integrated, synced, and functional with the business, it’s time to train your existing users and staff in the operation of the new platform.

Continuous support is crucial at this stage to help staff adapt to the integrated ERP and CRM systems.

6. Review and Iterate

After the integration goes live, a post-implementation monitoring of the system is required. This includes soliciting user feedback on a regular and ongoing basis.

This feedback should be used to make adjustments and tweak the environment, which will improve the integration over time. These regular adjustments will reduce in frequency over time.

ERP vs CRM: What Should You Choose?

When deciding between a CRM or ERP system, it's important to consider your business needs. If you're interested in building customer connections, enhancing service quality, and driving up sales numbers, a CRM is the way to go.

It's tailored to cater to your customers, improving interactions supporting marketing campaigns, and streamlining services—all of which can lead to increased sales.

On the other hand, if your company is looking for an all-in-one solution that integrates functional areas such as HR, logistics, or finance, then an ERP system might be more suitable.

ERP excels at bringing together data and processes in one place. They are crucial for businesses aiming to improve efficiency while reducing expenses.

Regardless of choice, a CRM or ERP system handles management tasks more efficiently. These systems simplify intricate operations across your organization and enhance collaboration among different departments.

Choosing a Trusted Custom CRM Development Partner

Should you wish to experience enhanced employee efficiency, improved customer satisfaction, and consistent increases in sales performance, consider integrating a CRM platform into your business strategy.

Intellectsoft stands as a comprehensive software development company enriched by years of crafting CRM solutions tailored for businesses across the spectrum.

Whether you’re migrating to a brand new platform, or requiring a CRM built from the ground up, our experts at Intellectsoft are equipped with the knowledge, expertise, and experience to support you through the entire process.

Summing Up

When deciding between a CRM or ERP system, it's important to consider your company's requirements and long-term objectives.

Whether you aim to enhance customer interactions or optimize workflows, grasping the differences between CRM and ERP is crucial for making a well-informed choice.

The hospitality industry depends a lot on keeping customers happy, but it’s getting harder to attract and keep them. The pandemic hit this industry hard, and now market competition is tougher than ever, with competitive offerings swaying customers. Hospitality businesses are willing to spend big to win customers back. The main questions for many are: how can we stay ahead of the competition, keep our customers, and increase revenue? Keep reading—we’ve got some answers.

Customers today have so many options that getting their attention is a real challenge. It’s not easy to make them choose your business over others. What worked 10 years ago doesn’t work the same way now. Back then, people often chose businesses based on reputation. But with new types of businesses (boutique hotels, craft cafes) popping up or big enterprises getting a new strategy, expectations have changed. The good news is these businesses have shown what works: great customer service. They focus on personalizing the experience, making things easy for customers, offering loyalty programs, and using smart technology.

In this article, we’ll explore these tech strategies and show you how they can help your business grow, and double the revenue. Keep reading to learn more!

The Importance of Customer Satisfaction in the Hospitality Industry

Customer satisfaction, which equals exceptional customer experience, is the backbone of the hospitality industry. It plays a central role in driving revenue and loyalty, as satisfied customers are more likely to return and recommend a hotel, restaurant, or other hospitality business to others. In fact, a study by the Harvard Business Review found that a 1% increase in customer satisfaction can lead to a 0.5% increase in revenue. Moreover, loyal customers are more likely to forgive mistakes and continue doing business with a company, even if they experience a negative encounter.

Let's quickly review the challenges the hospitality industry is facing right now so we can move on to the solutions and our case studies.

Challenges in Hospitality

As businesses navigate the changes in the hospitality industry, there are some key areas where a little improvement can go a long way. From improving customer service to embracing digital transformation and tackling labor shortages, we’ll take a closer look at today’s biggest challenges—and, more importantly, how technology can step in to help. Let’s get started!

Poor Customer Service

Even with strong and high-quality business offerings, poor customer service can drive potential customers and existing customers away. Common issues include:

Long wait times in customer service queues (it is worth remembering that our attention spans 8 seconds, and we live in a very busy world, so quick and efficient responses are more important than ever.)
Poorly trained customer service representatives
Lack of follow-up
Services not being done properly or quickly
Recall issues that require multiple service calls

These problems can frustrate customers. But, at Intellectsoft, we believe that the right approach, combined with technology, can address them effectively.

Digital Transformation Gaps

Approximately 50% of hotels are adopting new technologies, with 43% automating repetitive tasks and 39% upgrading existing systems.
Source: workstaff.app

Source: workstaff.app

While many businesses are adopting digital solutions, some still struggle with outdated systems and fragmented data. Legacy companies often face chaos when trying to manage their data and create new systems or add features.

Some of the recent examples include clients coming to us to create AI solutions for their services while their data simply was not ready for the advanced tasks. We advise stepping back, communicating with a company objective, and working on keeping the data clean (centralized, structured, and segmented).

When we’re asked to create advanced systems using AI, we always emphasize the importance of organized data. To train AI and build such complicated systems that truly work, you need to start from the very beginning—collecting, storing, centralizing, and organizing it. We encourage our clients to align all departments to work internally on the data so we can create a unified digital system that delivers personalized experiences.

If you’re unsure where to start with your data, we can help. Collecting feedback at various touchpoints along the customer journey is crucial for gaining insights into customer satisfaction and loyalty. Book an IT consultation with us, and our experts will guide you in mapping out a path to get more from your data and build a system that works for your business and team.

Reskilling Staff

The pandemic hit hard in early 2020, especially for the hospitality and travel industries. Even five years later, many businesses are still feeling the impact. Recruiting and retaining skilled staff has become a major challenge post-pandemic.

Reskilling to address technology’s impact is of utmost importance, as about 40% of hotel General Managers place it among their top three workforce challenges.

Source: Deloitte

We strongly believe that adopting the right technology can help. For example, creating an app to train your staff not only saves time but also ensures consistency in learning. AI assistants can also work alongside your team, helping with tasks like recruitment (providing industry insights, crafting emails) and staff training. Imagine having an app dedicated to making your team’s work easier and more efficient!

How Technology Tackles These Challenges and Supports a Customer-Centric Hospitality Culture

Automation, AI, and similar technologies may threaten many. However, the debate about replacing humans isn’t about that—it’s about cooperation and working hand in hand with technology to achieve the highest standards and establish brand-new “golden standards.” Technology is here to assist staff in listening to and collecting customer insights from data.

Let’s review some of our cases to see examples of how technology helps improve customer experience and supports customer service.

Examples of Intellectsoft projects

Property management systems (PMS)

We created a web platform and mobile app that makes managing daily tasks easier and offers extra services to improve residents’ experience. It gives a clear overview of daily activities and helps with managing units and users. Residents can easily book amenities, submit service requests, and report incidents. The platform also includes features for equipment management, key instructions, workflows, and custom permissions. This makes it easier for staff to stay on top of equipment and ensure residents have all the information they need. Plus, tools like announcements, quick votes, a forum, and a community calendar help build a connected and engaged community.

Guest Experience Management App

Our next app helped our client improve their guest experience by replacing printed marketing materials and the need for phone calls with a smart solution. Now, guests can easily order in-room dining, make reservations, and interact with staff— through a simple tablet in their room. The solution includes three parts: a custom in-room tablet with a variety of services, an admin panel for hotel staff and service providers, and a backend system that connects everything together. This approach makes things easier for guests and staff, improving both convenience and efficiency.

Existing Customers First: Building Loyalty with Personalized Touchpoints

Keeping existing customers is not just a strategy; it’s well-known that retaining existing customers is more cost-effective than acquiring new ones. In fact, research shows that it costs five times more to acquire a new customer than to retain an existing one. KPMG named customer retention as the number one revenue driver for the company.

Moreover, a 5% increase in customer retention can lead to a 25% to 95% increase in profits, showing the significant impact loyal customers can have on a business’s bottom line. Retention strategies, like personalized experiences and loyalty programs, can foster long-term relationships and generate recurring revenue, ultimately making them an invaluable part of any business model.

Personalization: How Technology Can Help?

Everyone loves to feel special—it’s part of being human. In hospitality, personalization has evolved from being a luxury to an essential standard. With the right technology to manage your data effectively, you can deliver those “wow” moments that guests won’t forget.

More than half of hotel chains are already using personalization features on their websites, booking platforms, and apps, and another 39% are planning to follow suit soon. They’re tailoring experiences to fit guest preferences perfectly.

Source: Deloitte

How does technology make it happen?

CRM Systems: They help you keep track of guest preferences, booking history, and special requests so you can offer services tailored just for them.
Loyalty Programs: Personalized rewards and offers show your guests that you value them, keeping them coming back for more.
AI Personalization: AI analyzes guest data to predict what they’ll love (from room upgrades to local recommendations) before they even ask.
IoT Gadgets: Smart room features like voice-activated assistants, or temperature controls adjust to your guests’ preferences, making their stay more comfortable.

With tech-powered personalization, you’re building loyalty and maximizing the lifetime value of every customer.

Our Case Study: Smart Hotel Management & Loyalty Program

For one of our clients, we created a smart room solution, complete with a custom IoT system. Guests can use a mobile app to control services, explore amenities, and find resort information-- with a special touch to their suite type. For the client’s entertainment business, we improved their legacy software by running a full IT and code check, fixing issues, and making the system better for customers.

Along with that, we developed a mobile app for the loyalty program, allowing businesses to effortlessly reward their customers and keep them engaged with exclusive benefits.

Our solutions not only helped the client with special experiences for guests; it also improved operations, cutting costs by eliminating inefficiencies. Here's what our experts shared:

"We transitioned away from ESB (Enterprise Service Bus) systems, which previously cost millions, and replaced them with more efficient, self-managed solutions. Similarly, we’ve implemented Device Farms that improved operations and saved resources."

Leveraging Software to Increase Upsell Opportunities

Here are some examples of tech tactics that will help your team sell more and introduce new offerings to existing customers, improve overall efficiency leaving your team grateful:

Dynamic Pricing Algorithms

For finance and marketing teams, manually calculating pricing by segment to introduce your clients can be incredibly challenging. AI-powered tools can strongly optimize these strategies by analyzing your database in detail.

Upselling via Apps

Boosting revenue in the hospitality business often comes down to personalized experiences. Imagine this: a guest books a room, and then your app suggests a spa package or a room upgrade at just the right moment. Later, it nudges them to book a dinner reservation or a guided tour designed to their preferences. With apps offering these personalized recommendations during and after bookings, you’re not just increasing your revenue per guest but also skyrocketing their experience. And you do it in a sustainable way, not by speculating, but by offering what your customers desire based on their previous experiences. It’s a win-win: seamless, helpful, and far from pushy.

Inventory and Resource Management Software

Making every resource count in your hospitality business is key. Inventory and resource management software allows you to effortlessly track everything from linens to room availability, ensuring nothing goes to waste. Having real-time insights to reduce overstock, avoid shortages, and optimize operations assists sustainably keep everything under control and know what you need to focus more. It helps maximize room occupancy by aligning bookings with available resources, ensuring every room and item is used effectively. This approach leads to smarter management, better guest experiences, and a noticeable boost to your bottom line.

Adopting these strategies not only optimizes your operations but also drives business growth. Ready to discover how technology can elevate your goals? We’re here to create a tailored solution for you.

Steps For Implementing a Customer Service Technology Solution

Improving customer service in hospitality doesn’t have to be a daunting task. With the right technology, you can smooth the path of your operations, speed up response times, and elevate the overall guest experience. Here’s where you can make it happen:

1. Understand Your Needs

Start by identifying the challenges your business is facing. Are you struggling to manage high volumes of inquiries, track customer feedback, or personalize the guest experience? Pinpointing your needs will guide you to the best solutions.

2. Pick the Right Tools

Choose technology that aligns with your goals. Look for solutions that are scalable, easy to use, and integrate effortlessly with your current systems. Options like CRM software, live chat tools, or a guest experience app can make a difference.

3. Equip Your Team

Technology is only as effective as the people using it. Train your staff to make the most of the new tools, so they can deliver exceptional service and resolve issues quickly. Confident, well-equipped staff creates happy, loyal customers.

4. Keep Improving

Once implemented, monitor how well the solution works. Are response times improving? Are customers more satisfied? Regular evaluations will help you fine-tune your approach and keep things running harmoniously.

Some Tech Ideas for Hospitality Businesses

CRM Software: Manage customer interactions and preferences.
Guest Experience Apps: Delight guests with personalized experiences right at their fingertips.
Amenity Management Systems: Simplify operations for everything from room service to facility bookings.
Helpdesk Software: Resolve customer issues optimally.
Live Chat Tools: Offer instant support and answers.
Social Media Management Tools: Keep customer interactions engaging and organized.

Integrating these strategies will not only improve your customer service but also deliver unforgettable customer satisfaction, loyalty, and, ultimately, your bottom line. Ready to take the next step? Book a consultation with our experts.

Conclusion

To wrap up everything we've discussed, customer satisfaction and experience are at the heart of hospitality. Retaining customers is more than just keeping them around—building strong, long-lasting relationships and consistently meeting their evolving needs. By understanding their pain points and offering personalized solutions, you can inspire loyalty and drive progress. With the right technology and continuous improvement, your business can stay ahead, let go of what no longer serves you, and keep growing.

At Intellectsoft, with over 17 years of experience in software development, our expert team is ready to help. We create everything from mobile apps to full-fledged portals and systems, leveraging the latest technologies like AI, Cloud, and Machine Learning. With deep experience in the hospitality industry, we’re here to craft personalized solutions that bring your business unforgettable customer experience and retain your valuable clients.

Ready to double your revenue and level up your customer retention strategy with personalized technology? Contact our experts, and we look forward to working hand in hand with you to build or revitalize the perfect app or system for you.

Tetiana Borysova

Content Writer

CRM vs ERP: Choosing the Right Solution for Your Business

"Given enough time and growth, most organizations will need an ERP and a CRM."