What Are the Differences Between ERP and CRM Software?

With so many types of business software out there — and so many acronyms, too! — it can be tough to keep everything straight. So what is ERP, CRM, CMS, BPM…? In this post, we’ll answer all that and more. 

Definition of ERP (Enterprise Resource Planning)

ERP systems can manage your full scope of back-office business operations.

ERP Core Business Functions: Operational Data

Streamline your operations with a central database.

• Financial: ERP systems manage your full suite of financial needs, including accounting, invoicing, business intelligence, and more.
• Inventory & Material Requirements Planning (MRP): For product-based businesses or those that require a small inventory to serve their customers (think landscaping, hairstyling, etc.), ERPs provide comprehensive supply chain and inventory management.
• Human Resources: Have a central database for tracking employee information, including time off, referrals, and recruitment.
• Sales: While some ERPs do include customer relationship management (CRM) features, they don’t need to incorporate CRM to be considered a complete ERP system.

Definition of CRM (Customer Relationship Management)

These systems do way more than store contact information. Here’s what you can expect from CRM software.

CRM Core Business Functions: Customer Data

Track all your customer-related processes in one place.

• Lead Tracking: Use your CRM system for data entry automation to catalog lead origins, contact details, and records of customer interactions to enhance customer relationships and improve customer satisfaction. 
• Sales Pipeline and Funnel Management: Keep teams aligned on your sales processes, potential customer engagement, and conversion rates to make strategic decisions.
• Marketing: When you think of CRM software, you usually think of sales — not marketing campaigns! But CRMs benefit both sales and marketing efforts by collecting and assessing audience data.
• Forecasting and Reporting: By analyzing customer data, you can use CRM software to project performance and make informed business decisions.
• Document Storage & Management: Not all CRM tools feature document storage or help with document management workflow, but choosing one that does means one less platform to manage.

Key Similarities in ERP and CRM Software

Although they have differing primary functions, ERP software has a lot in common with CRM software. Here’s how CRM and ERP software are similar.

• They both streamline core processes. Instead of wasting time on manual data entry and tracking, you can harness the time-saving, error-busting power of workflow automation with these tools. 
• They both track data. Both types of tools allow for data entry automation and track data across your business. The types of data differ, but functionality can be similar.
• They both use relational databases. Relational databases don’t just store data — they track relationships between data sets and intelligently categorize information. For example, Airtable is a relational database with customizable ERP and CRM capabilities.

Key Differences in CRM and ERP Systems

CRM and ERP tools aren’t identical; they target different core functions. Here are the key differences between ERP and CRM solutions.

• ERP is a broader category of software, which can include CRM functionality. While some ERPs include CRM features, in general, CRMs don’t have ERP capabilities. So if you’re considering getting both, start by finding an ERP that has the CRM capabilities you need.
• ERPs mainly organize operational data; CRMs are for managing customer data. ERP software primarily deals with back-office work — accounting, inventory, supply chain, etc. But CRM systems are built for front-office work — such as sales and customer relationships.
• Every business can benefit from a CRM, but not all will need an ERP. Since all businesses have customers in some form (whether B2B or B2C), they all need some way to store and organize customer information. However, not all businesses need the robust features of an ERP, such as inventory management (if you have no inventory) or human resources (if you have few/no employees).  

7 Benefits of Using CRM and ERP Systems

1. Process Automation. CRM and ERP software solutions automate manual processes, so your team has fewer repetitive tasks to manage. 
2. Time Savings. Since workflow automation removes tasks from your team’s day, they get time back to work on more important tasks.
3. Happier Teams. When you reduce repetitive tasks, automate manual processes, and give your team members more time for mission-critical work, they’ll feel more fulfilled and productive.
4. Improved Customer Satisfaction. CRMs can fill gaps in customer service processes and help resolve customer inquiries more quickly. And ERPs provide valuable insights to help streamline your business and serve your customers better, too.
5. More Clarity on Business Performance. Both systems prioritize reporting, meaning you can customize reports to display the information that matters most to you — and make more strategic, data-backed decisions.
6. More Cross-Team Collaboration. When your teams have access to more types of data, they can understand their impact throughout the business and help other teams work more efficiently, too. 
7. Risk Mitigation. Data entry errors and compliance issues are major risks when your business relies on manual processes. Workflow automation with ERP and CRM systems can help.

7 Challenges of Using ERP and CRM Systems

1. Value. Many CRM and ERP systems charge per user. Hosting costs add up, too. Plus, you may face additional costs for premium support and maintenance or pay for features you don’t need. 
2. Complexity. You need to customize and organize features in ways that make sense with your core business processes. You also need to understand the system to use all its features, train teams, customize permissions, override, and more.
3. Integration. If your tool(s) don’t have native integrations with existing platforms, CRM and ERP integration can be challenging. You may need extensive API and/or programming work.
4. Data Migration. When transitioning from self-hosted legacy systems to modern cloud-based tools, remember that these tools may define and organize data in completely different ways, requiring extensive customization and manual effort. 
5. Customization. It’s rare for any platform to meet all of your needs right out of the box. So how much customization does your ERP system offer? Can you add and remove features, modify permissions, and integrate with other platforms? What types of APIs do your tools support? Consider your current and future needs.
6. Flexibility and Scalability. When you choose stagnant tools that don’t invest in regular bug fixes, new features, and scalable approaches, you’re looking at another full system overhaul as you grow. No thanks! The right tool should scale up (upgrade and leverage more resources to capture more data as you grow) and scale out (integrate and transfer data between your systems).
7. Vendor Support. When you find a bug or need help with your ERP or CRM system, how quickly can you get answers — and how tailored is the support? Choose a vendor who’s known for reliable help and service.

How Do I Know I Need an ERP System?

If any of this sounds familiar, your team may need an ERP tool.

1. Your Data Is Scattered

When it’s tough to track down or unify your data, you have a few choices. 

• Do nothing
• Try integrating your systems more successfully
• Explore a more efficient, all-in-one ERP solution

Hiring a custom software integration expert can simplify this decision. Luckily, we know someone who can help… get in touch!

2. You Use Time-Consuming Manual Processes 

Maybe your systems don’t work well together. Or maybe your business is growing faster than those systems can handle. 

Either way, before long, you end up with arduous manual processes in every area of your business. Manual processes not only waste valuable time and money but are also prone to data entry errors — which cost even more.

Enter workflow automation! Reduce or eliminate manual processes, streamline connections between systems, help teams connect and leverage each other’s data… the right ERP system can do all this and more.

3. It’s Difficult to Handle Your Inventory and Supply Chain Management

Nothing slows you down quite like an inability to keep up with demand. 

With hiccups in your supply chain and a lack of visibility into your inventory, you waste time and lose sales in the process. But ERP systems can help with supply chain management.

4. Your Sales Team Moves Slowly

Inefficient sales processes lead to fewer sales in more ways than one. Conversion rates can suffer when the sales cycle takes too long, and sales teams miss opportunities to land more deals.

Improve customer relationships and smooth out your sales pipeline with an ERP system.

5. Compliance Is Suffering

Without automation, it’s tough to keep up with licensing and other compliance procedures. 

You need to keep focus on your business goals without letting compliance slip — and ERPs can help. 

6. You’re Missing Vital Business Intelligence Insights

If you can’t see your performance or how the different pieces of your business influence one another, there’s a good chance your business could be performing better — but you just can’t see it.

With the right ERP system, business leaders can make strategic decisions based on hard data.

7. You're Growing Faster Than Your Systems Can Handle

When your core business processes don’t fit your current stage of business, growth can slow — or stop altogether. Don’t let your systems and tools hold you back. A flexible ERP system can solve your current challenges and grow with you as you scale.

How Do I Know I Need a CRM System? 

If customer relationships are in trouble, data tracking could be to blame. If that’s the case, the right CRM system can help.

1. You Have Difficulty Tracking Leads and Long-Term Customer Relationships

How are your customer interactions logged? Where do you go to find customer information? If you’re using multiple systems, you might not have a good answer to these questions.

CRM systems are powerful tools to fix these issues.

2. You’re Seeing Errors and Wasted Time Due To Manual Customer Processes

When something goes wrong with customer interactions, your overall customer satisfaction is in jeopardy. Your best bet is to find the right data — fast. But with data entry errors and manual customer service processes, that’s easier said than done. CRM workflow automation is ideal for customer service management.

3. There’s No Visibility Into Your Sales Pipeline

What happens as a lead moves toward becoming a customer? If business leaders can’t see this, it’s hard to make smart decisions or forecast future performance. You need a reliable CRM system to track this information.

4. You Compile Sales Reports Manually

Your sales team should focus on sales — but strategists need pipeline visibility. Without a complete CRM system, your sales team has to step away from sales for manual reporting.

5. You Make Growth Decisions Based On Feelings, Not Data

You know your business inside and out — so we’re not knocking your intuition. But without data-backed insights, you’re making strategic decisions in the dark. The right CRM system will store, categorize, and analyze data for more informed decision-making.

4 Best Examples of Our Favorite CRM Systems

There are tons of CRM solutions out there! Here at Crispy, we love using these CRM systems to create personalized solutions for our customers.

1. Hubspot. Hubspot is a comprehensive CRM that allows businesses to connect data, teams, and customers.
2. Lawmatics. A favorite among legal professionals, this CRM tool for law firms and attorneys includes features such as lead capture and workflow automation.
3. Salesforce. This leading cloud-based CRM software lets you connect, integrate, and analyze customer data company-wide.
4. Airtable. A popular cloud-based platform using fully customizable low-code functionality to meet the exact needs of your business.

4 Best Examples of Our Favorite ERP Software

The ERP market is enormous. How do you sort through it all? Here are 4 of the most tried-and-true ERP systems.

1. Odoo. An open-source hybrid solution aiming to solve myriad business needs with one platform.
2. Oracle Netsuite. A strong all-in-one solution for financial management, inventory, workflow automation, and much more.
3. SAP Business One. Scalable ERP focused on workflow automation and real-time reporting for small and growing businesses.
4. Sage Intacct. A financial management ERP with in-depth accounting capabilities and financial data reporting. 

How to Integrate Your ERP and CRM Systems for the Best Results

Honestly, the best way to integrate ERP and CRM systems is to choose a single ERP/CRM platform. 

That’s because integrating disparate systems will almost always be more complex and error-prone than one system. 

To get the best results, you need 2 key things:

• Data tracking and reporting across all areas of your business 
• Well-defined business processes

For example, customer information should link to sales reporting and accounting information. That way, your sales and marketing teams understand your customers better — and customer service teams can see their impact on the bottom line. 

Streamlined, automated processes help you stay ahead. For instance, you can automatically welcome new customers and extend gifts to current customers who are increasing their spend.

Improved customer experiences lead to better LTV and company margins. So by automating these processes, your sales and customer service teams are free to do their most impactful work.

Just remember: the fewer tools linked, the more efficient and effective the process.

How Much Do ERPs and CRMs Cost?

Tool costs vary widely. For example, ERP tool Odoo quotes $24.90/month for its services, while Oracle NetSuite only offers custom quotes based on core platform, modules, and your number of seats. That type of customized pricing is common as you scale.

When considering your budget for an ERP or CRM tool, add up the fees for all of the services you’re currently using — accounting software, lead management systems, e-commerce solutions, etc. 

Also, factor in the cost of time spent on manual processes, searching for and connecting disparate data, etc. 

After all, optimizing your business processes isn’t necessarily about spending less — it’s also about driving increased capacity for additional revenue. 

ERP / CRM Frequently Asked Questions

Here are the key questions to consider when evaluating CRM vs ERP (or both).

Do I need an ERP, a CRM, or both? What type of business needs both CRM and ERP?

Since all businesses have customers in some form, we’d argue that all businesses need a CRM tool. CRM systems focus on the sales cycle and your marketing efforts.

Yet, many businesses only require a lightweight ERP (enterprise resource planning) tool — or none at all. ERP systems are perfect for most product-based businesses — as long as the proper business processes are in place. But service-based businesses won’t usually benefit from an ERP, unless they have a small inventory to manage.

Is BPM a substitute or complementary for ERP?

In many ways, BPM (business process management) is the heart of Crispy Software Solutions. We partner with clients to standardize and streamline their business through a combination of process management and custom software development.

ERP systems are complementary to BPM — not the other way around. You can have a successful business process management system without an ERP (depending on your business), but without strong business processes, even the best ERP system won’t help.

What’s the difference between ERP, CRM, and CMS?

ERP (enterprise resource planning) systems typically handle back-office operational data, like accounting and inventory management.

CRM (customer relationship management) tools work with customer information, including sales processes and marketing campaigns.

CMS (content management system) software is for the creation and publication of digital content, such as blog posts for a website.

All 3 of these tools have distinct functions, but integrating all of them is a smart way to get complete insight into your business:

• Integrating ERP and CRM lets you link customer and financial data to make smart business decisions. 
• Integrating CRM and CMS allows you to intelligently automate marketing campaigns from production through publication. 
• Finally, integrating ERP and CMS helps you keep your site updated with new products, descriptions, and even real-time availability of your inventory.

At Crispy, we build custom software solutions to help you integrate all these systems and more.

Is SAP a CRM or ERP?

SAP (System Analysis Program Development) is an ERP system that has evolved significantly over the years. The company used to have distinct ERP and CRM tools, but today, they offer an all-in-one solution.

Is Salesforce an ERP or CRM?

Salesforce is a CRM system. While the tool has a wide range of business capabilities, including plenty of features that assist with business processes and operations, its core functionality centers around customers. 

Conclusion: A Personalized Full-Service Solution Is Best

If you feel like your only option is to jam several different platforms together and hope for the best — we hate to break it to you, but that’s not a sustainable solution. 

Even if it works perfectly now (which is unlikely), that option won’t scale with you.

Instead, consult with custom workflow automation experts who know these tools inside and out.

Crispy Software Solutions will learn about your current business, listen to your unique challenges, and identify one platform with all the functionality you need. Then, we’ll use advanced customization options to tweak that platform for the exact problems you face. 

That way, you have a personalized, scalable solution built to work specifically with your business — both now and in the future.

Interested? Reach out and let’s start building the custom ERP or CRM solution of your dreams. Contact us today.