The enterprise resource planning or ERP system is an IT-based scheme of integrating the various functional activities of a company into a unified structure or system. This specialized system uses numerous elements of computer software and hardware to accomplish a complete consolidated structure. Initially, ERP systems existed as mere extension of both MRP (materials requirement planning) and MRP II (manufacturing resource planning).
MRP is a software-based system used to managing the manufacturing processes. It ensures availability of materials and products, maintains the lowest possible inventory level, and produces a sound plan for various manufacturing, delivery, and purchasing activities. In contrast, MRP II provides a company with an effective planning of all its resources. Both software applications and people skills are essential for this system to succeed its purpose.
The ERP systems were exclusively used by large manufacturing companies only. However, ERP continued to evolve its functions making it capable to cover all the basic functions of an organization, regardless of the nature of business. In result, non-profit organizations, non-manufacturing business, and government sections have begun adopting ERP into their business or management systems.
Historically, CRM or customer relationship management was formerly known to be among ERPs standalone applications. Specifically, CRM can be defined as customer-oriented software. It simply focuses and improves on the interaction that a company maintains with its valued customers. It ensures better and consistent tracking of clients, which results to an increased in sales and satisfied customer needs.
In conclusion, while CRM directly focuses toward satisfying customer requirements, ERP system gears toward a much wider and overall perspective. ERP system basically attempts to run the entire business process, with sales and marketing as simply among its integral components.