What’s the Difference Between ERP and CRM?
When finding software that connects cross-departmental data and automates core business processes, there are two clear winners: ERP and CRM.
- CRM (Customer Relationship Management) Software is front-end focused, managing the relationship between a business and its customers’ activity, connecting sales, marketing, advertising, and customer service.
- ERP (Enterprise Resource Planning) Software focuses on back-office functions, bringing together data from multiple applications and departments – finance, supply chain, HR, and operations – to create a unified view of the business.
Looking for ERP Software? Use our comparison tool to Identify the best system for your needs
What Do You Need An ERP Software For?
Side-by-Side Differences Between ERP and CRM
Make no mistake, ERP and CRM systems serve entirely different purposes. Although they share some similar functionalities (shown in the image above), they are not interchangeable. They differ in core functions, capabilities, departmental usage, and implementation.
ERP | CRM | |
|---|---|---|
Core Function | Manage and automate back-office functions across finance, supply chain, manufacturing, HR, and operations. | Manages customer lifecycle across sales, marketing, and customer service. |
Capabilities | Accounting, budgeting, procurement, inventory, warehouse management, payroll, and compliance. | Account management, contact management, pipeline, CPQ/quotes, marketing campaigns, email tracking, service desk, and customer data platform |
Usage (Teams) | Finance, operations, supply chain, manufacturing, HR, IT operations, and executives. | Sales, marketing, customer success/service, RevOps, and executives. |
Implementation | Organisation-wide phased approach with heavy data migration and integration. | Lower complexity to ERP, starting with Sales implementation and expanding. |
KPIs | DSO/DPO, revenue growth, period close time, production yield, cost per order, plan vs actual, and inventory turns. | Lead to opportunity, win rate, sales cycle length, MQL to SQL, churn, CSAT, and resolution time. |
Industry-fit | Manufacturing, Distribution, Retail/E-commerce, Construction, Professional Services, Healthcare, and Public Sector. | B2B service-led firms, SaaS, Professional Services, Financial Services, and Retail/E-commerce. |
ERP or CRM: Which System Best Matches Your Requirements?
While both will improve business efficiency and productivity, remember: CRM Software is front-office, ERP Software is back-office
When You Require CRM
- Need a structured sales pipeline and reliable forecasting
- To stop lead leakage with capture, scoring, and follow-up
- Track sale activity, including quotes and approvals
- To identify types of customers and create personalised, segmented campaigns
- Lead scoring to identify conversion opportunities and improve sales processes and methods
- Engage customers using demographic and psychographic statistics
- Analytical insights into the results of campaigns to help improve sales performance
- Improve the customer experience and track CSAT and churn
When You Require ERP
- You need a single source of truth for finance, HR, operations, and supply chain data
- Automate processes like accounts payable and order-to-cash
- Need to manage MRP, BOMs, routing, and warehouse for your manufacturing or distribution processes
- Improving mandatory processes like regulatory compliance, audit trails, and approvals
- Need reliable planning, scheduling, forecasting, and capacity management
- You operate across multiple sites, countries, and currencies
- Require back-office workflow automation with role-based controls and master data management
Capabilities | CRM | ERP |
|---|---|---|
Subscription and renewals management | ✓ | ✓ |
Dashboards and reporting | ✓ | ✓ |
Workflow automation and approvals | ✓ | ✓ |
Mobile apps and offline access | ✓ | ✓ |
Product catalogue and pricing | ✓ | ✓ |
Financial accounting | ✓ | |
Procurement and supplier management | ✓ | |
Inventory and stock control | ✓ | |
Order management and invoicing | ✓ | |
Payroll and HR | ✓ | |
Tax, compliance and audit trails | ✓ | |
Lead capture and scoring | ✓ | |
Account and contact management | ✓ | |
Sales forecasting | ✓ | |
Campaigns and marketing automation | ✓ | |
Email tracking and sales sequences | ✓ | |
Customer service and case management | ✓ |
Find ERP Software That Matches Your Back-Office Requirements
What Do You Need An ERP Software For?
What About ERP and CRM Integration?
ERP and CRM integration combines the best of both worlds: front office tasks and back office processes.
Larger, enterprise businesses need to align both sales and operations. They require some form of ERP CRM integration to ensure data is kept consistent across all front-end and back-end business activities. Working together, with additional integrated value, ERP and CRM can improve visibility and operational efficiency.
Choosing the correct integration method is the first step. Either one that integrates natively or has a suitable add-on or third-party module to process the integration of data. ERP adds features like privacy and compliance management, added security and other features that a CRM might not focus on.
Linking sales workflows (cross-marketing, the sales pipeline, customer touchpoints and orders) to stock management, logistics, buying and production control will deliver several operational benefits.
What System Set-Up Will Suit You Best?
There are multiple paths to take on your business growth journey, but these main choices will drive leadership decision-making:
ERP-only: If your business has a limited number of sales customers, there is minimal reason for a CRM, especially if most of your data crosses finance, production and manufacturing.
CRM: A pure sales-focused business model, or an e-commerce business that has no or minimal production facilities, can focus on the data from its CRM and evolve its operations around those insights.
ERP and CRM: A company that started with a strong sales force and then changed to producing or manufacturing its own products is a prime candidate to run both products, or migrate from a CRM to ERP. Similarly, companies that are aggressive acquirers of others may need (or face) a blend of both tools in place to function until their next digital evolution phase (or upgrade).