ERP vs. CRM: Know Their Individual and Combined Strengths

ERP systems are designed to streamline internal processes, such as supply chain management, human resources, and financial management. They provide a comprehensive business solution by integrating various functions into a central database, ensuring accurate data and easier decision-making across the organization.

CRM systems, on the other hand, focus on customer interactions. By managing and analyzing customer data, they support sales teams, improve customer retention, and drive marketing efforts. They help businesses build and maintain customer relationships through personalization and customized experiences.

By understanding the unique capabilities of ERP and CRM systems and how they can be integrated, businesses can move forward and make an informed decision on implementing a strategy with the greatest positive operational and financial impact.

What is ERP?

Enterprise Resource Planning (ERP) systems are business software solutions that consolidate and integrate all business operations.

ERP solutions manage many business functions. In HR, they manage employee data, payroll, and talent acquisition. In finance, they manage financial data, financial controls, accounting processes, and cost management. In manufacturing, they manage materials, inventory control, production planning, and supply chain management.

ERP systems also support sales and marketing by improving sales processes and customer interactions. They support project management through planning, tracking, and execution.

The central database ensures data is accurate and up to date, so there’s one version of the truth for the whole organization. This leads to better decision-making through actionable insight and reduces costs by optimizing resource allocation.

ERP systems are scalable so they can grow with a business.

What is CRM?

Customer Relationship Management (CRM) systems are specific tools to manage a company’s interactions with existing and potential customers. These systems manage customer management by consolidating, automating, and synchronizing sales, marketing, and customer service activities.

Popular CRM systems such as Salesforce and HubSpot are renowned for their powerful customer management capabilities and ease of integration with many ERP systems.

By giving a 360-degree view of customer interactions, CRM systems help businesses deliver personalization and increase customer engagement and loyalty. Centralized data management means every department has access to the same information, so there are no data silos and better collaboration.

Implementing a CRM system improves customer management by providing detailed insight into customer preferences and behavior. This means businesses can tailor their offerings and interactions to deliver a more personalized and better customer experience.

Differences between Enterprise Resource Planning and Customer Relationship Management

Knowing the differences between ERP and CRM systems will help you choose the right tools for your business. While both systems are designed to improve business operations they do so in different ways.

ERP Systems: ERP systems are comprehensive business solutions designed to manage and integrate various business processes across various departments. Examples are:

• Human Resources: Managing employee data, payroll, and talent acquisition.
• Finance: Overseeing financial controls, accounting processes, and cost management.
• Materials Management: Handling inventory control, production planning, and supply chain management.
• Sales and Marketing: Enhancing sales processes and customer interactions.
• Project Management: Facilitating planning, tracking, and execution of projects.

ERP systems offer data accuracy and real-time insight and support seamless organization-wide operations. Their main goal is to smooth internal processes and overall efficiency.

CRM Systems: CRM systems, on the other hand, focus on customer relationships. Their main goal is to manage interactions with existing and potential customers. Features of CRM systems are:

• Customer Data Management: Organizing all customer information in a centralized database.
• Sales Automation: Tracking and nurturing leads throughout the sales cycle.
• Marketing Automation: Personalizing marketing campaigns based on customer data and behavior.
• Customer Support Tools: Managing customer inquiries, support tickets, and service requests efficiently.

CRM systems offer a detailed view of customer interactions and aim to improve customer satisfaction, boost engagement, and drive customer loyalty.

Scope and Functionality Comparison

ERP solutions combine a wide range of business functions and departmental processes into one system. They are the backbone of the organization, a single platform for better coordination, resource allocation, and strategic planning.

CRM systems have a narrower scope and are focused on customer management. They help businesses track customer interactions, manage leads, and personalize marketing. CRM systems are for sales teams to manage pipelines, customer service teams to manage support tickets, and marketing teams to run targeted campaigns. 

They focus on customer data and interactions so businesses can deliver personalization and build long-term customer relationships.

ERP Systems With Integrated CRM Modules

Almost all ERP systems now have integrated CRM modules that combine ERP’s broad management capabilities with CRM’s customer-focused functionality.

Advantages of Integrated CRM Features in ERP Systems:

• Unified Data Source: Centralized data storage eliminates the need for separate databases, reducing data redundancy and ensuring consistency across all business functions.
• Seamless Integration: Built-in CRM modules ensure smooth interaction with other ERP components, facilitating real-time data flow and reducing integration issues.
• Cost Efficiency: Using CRM features included in an ERP system can be more cost-effective than purchasing a separate CRM system, as it reduces software licensing and maintenance costs.
• Simplified IT Management: Managing a single integrated system is simpler and less resource-intensive than maintaining separate ERP and CRM systems.
• Enhanced Collaboration: Teams across departments can easily access and share information, improving communication and collaboration without complex integrations.
• Better Customer Insights: Integrated systems provide a comprehensive view of customer data, helping businesses tailor their offerings and interactions based on a complete understanding of customer behavior and preferences.

ERP and CRM integration improves resource allocation and strategic planning. This holistic approach optimizes internal operations and customer management.

Benefits for Manufacturing Businesses

Integrating ERP and CRM has big benefits for manufacturing and distribution businesses. By combining ERP’s process management with CRM’s customer-focused functionality, manufacturers can have smooth production planning and more.

Key Benefits for Manufacturing Businesses:

• Streamlined Production: Integrated ERP and CRM systems help synchronize production planning with customer orders, ensuring timely deliveries and reducing production bottlenecks.
• Accurate Inventory Management: Real-time data on inventory levels and customer demand allows manufacturers to optimize stock levels, reduce excess inventory, and minimize stockouts.
• Enhanced Customer Relationships: CRM functionalities within an ERP system provide a comprehensive view of customer interactions, enabling manufacturers to deliver personalized service and build stronger customer relationships.
• Improved Order Management: Integrated systems facilitate better coordination between sales and production teams, ensuring customer orders are fulfilled accurately and efficiently.
• Better Demand Forecasting: Access to consolidated data from ERP and CRM systems enables more accurate demand forecasting, helping manufacturers effectively plan production schedules and inventory levels.

Example: A manufacturing business using an ERP system with built-in CRM like Microsoft Dynamics 365 can synchronize customer order information with production schedules. This integration means production is aligned with customer demand, reduces lead times, and improves on-time delivery rates. The single data platform also means better inventory management so the business can maintain optimal stock levels and reduce carrying costs.

ERP Systems with Integrated CRM Features

We know how important it is to choose a system with great CRM out of the box. Our experience has shown that ERP systems with good CRM mean a complete view of your business and all aspects, from sales to customer service.

These ERP software systems have great CRM modules with features like automated sales processes, customer insights and marketing tools:

Explore these top ERP solutions further to see if there is a potential fit for your business needs, ensuring a cohesive and efficient approach to managing your internal processes and customer interactions.

CRM Integration with Existing ERP Systems

For businesses with an existing CRM, such as Salesforce, choosing an ERP system that integrates seamlessly with it is important. This integration ensures a smooth flow of information between sales, customer service, and other departments, maintaining operational continuity and enhancing overall efficiency.

Factors to Consider for Integration:

• Compatibility with Current CRM: Many businesses rely on CRM systems such as Salesforce, Microsoft Dynamics CRM, or HubSpot. Selecting an ERP system that can seamlessly integrate with these platforms is essential. For instance, ERP solutions like NetSuite and Microsoft Dynamics 365 are designed to work smoothly with popular CRM systems, facilitating unified data management and operational efficiency.
• Cloud-Based vs. On-Premise Systems: Cloud-based ERP systems generally offer easier and more flexible integration than on-premise systems, which can be more complex and costly due to infrastructure differences. Cloud-based solutions provide the added benefits of quicker implementation, scalability, and remote accessibility.
• Unified Data Access: Integration ensures that all departments have access to the same customer and operational data, reducing data silos and improving collaboration. This unified data approach provides more accurate and real-time insights.
• Scalability and Flexibility: Cloud-based integrations offer the advantage of being easily scalable to meet your business’s growing needs. They also provide the flexibility to access information from anywhere with an internet connection, making it easier for teams to collaborate and stay informed.

For more information on ERP software that integrates well with Salesforce, visit our comparison of ERP best suited for Salesforce integration. Choosing the right ERP system that integrates seamlessly with your current CRM can significantly enhance your business operations, improving customer satisfaction and overall performance.

Benefits of Cloud-Based Integrations

It is important to briefly expand on the benefits of cloud-based ERP regarding CRM integration. Cloud-based ERP systems provide businesses with several appealing advantages:

• Quick Implementation: Cloud-based ERP solutions can be integrated with CRM platforms more rapidly than on-premise solutions. This speed of deployment allows businesses to start benefiting from the integrated systems sooner, minimizing downtime and disruption.
• Scalability: Cloud-based systems are inherently scalable, enabling businesses to easily expand their operations and add new functionalities as needed. This scalability ensures that the ERP and CRM systems can grow alongside the business, accommodating increasing data volumes and user numbers without compromising performance.
• Ease of Access: Cloud-based systems provide access to real-time data from any location, enhancing flexibility and responsiveness. Employees can access critical business information on the go, facilitating remote work and improving decision-making processes by ensuring that up-to-date data is always available.

Embracing cloud-based integrations allows businesses to respond swiftly to internal and external changing market demands, ultimately leading to better performance and growth.

Simplify Your ERP and CRM Selection Process

At Top10ERP, we know how the right ERP and CRM implementation can improve manufacturing and distribution operations. It’s not just about merging functionalities; it’s about creating a seamless workflow across your entire organization.

Our ​“Best Fit” Comparison Tool is designed to simplify the ERP selection process. This tool allows you to compare different ERP solutions based on various criteria, such as industry suitability, company size, deployment options, and specific functionalities. By inputting your business requirements, the tool generates a list of systems that best match your needs, providing a clear and concise comparison to help you make an informed decision. You can even request complimentary demos and price quotes for each system that appeals to you.

In addition to the comparison tool, we offer personalized selection help. Our ERP experts can provide tailored recommendations based on your unique business requirements. We can guide you through the selection process, ensuring you choose the ERP system that aligns with your goals and budget.

Frequently Asked Questions: ERP vs. CRM

To help clarify the differences between Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) systems, we’ve compiled answers to the most common questions about these business software solutions.

What are the primary differences between ERP and CRM systems?

ERP systems are comprehensive business management solutions that integrate various departments and functions across a company, including finance, human resources, manufacturing, and supply chain management. CRM systems, on the other hand, focus specifically on managing customer interactions, sales processes, and marketing efforts. While ERP aims to streamline internal business processes, CRM is designed to improve customer relationships and sales performance.

Can ERP and CRM systems work together?

Yes, ERP and CRM systems can be integrated to provide a more comprehensive view of business operations. This integration allows for seamless data flow between customer-facing processes and back-office operations, leading to improved decision-making and efficiency.

How do the costs of ERP and CRM systems compare?

Generally, ERP systems tend to be more expensive than CRM systems due to their broader scope and complexity. ERP implementation often requires more time, resources, and customization. CRM systems, being more focused, are typically less costly to implement and maintain. However, costs can vary widely based on the specific solution, vendor, deployment method (cloud-based or on-premises), and the size of the organization.

Is SAP a CRM or ERP system?

SAP is primarily known for its ERP solutions, offering comprehensive business management solutions. However, SAP also provides CRM functionality as part of its broader suite of business applications. Their main ERP product, SAP S/4HANA, includes modules for various business processes, while SAP Customer Experience (formerly SAP C/4HANA) offers CRM capabilities. So, SAP offers both ERP and CRM solutions, with ERP being its core strength.

Is Salesforce an ERP or CRM?

Salesforce is primarily a CRM (Customer Relationship Management) platform. It’s best known for its cloud-based CRM software that helps businesses manage their sales, customer service, and marketing efforts. While Salesforce has expanded its offerings over the years to include some ERP-like functionalities through its AppExchange marketplace and partnerships, its core focus remains on CRM. For full ERP capabilities, businesses often integrate Salesforce with dedicated ERP systems.