Enterprise resource planning (ERP) and customer relationship management (CRM) are both sets of widely used business applications, but they’re not the same. ERP systems provide a platform for centralising organisational data and managing back office business processes, while CRM systems act as a central repository for customer-related data, specifically to assist in managing customer relationships.
Understanding ERP and CRM
Effective data management is a cornerstone of any successful business. Siloed information and manual processes can create barriers to growth. This way of thinking has driven more companies to consider business management systems such as ERP and CRM. ERP and CRM systems are both important when a business wants to store, manage, and analyse financial, supply chain, HR, sales, marketing, and other business information.
For example, ERP solutions can help companies connect their financial and operational systems to a central database, giving them the ability to automate processes, gain critical insights, and maintain internal controls. A CRM system helps to manage how current and prospective customers interact with a business by providing a seamless flow of information across the entire engagement lifecycle.
Multiple departments are likely to use ERP and CRM systems together, as they both serve as central repositories of information for teams to use and analyse to boost operational efficiency and performance across the business.
What's the Difference Between ERP and CRM?
The key difference between ERP and CRM is their focus. ERP systems help companies manage their back office operations and processes, including finance, HR, inventory, supply chain, and distribution. CRM systems help companies manage their interactions and relationships with customers. These front office systems are predominantly used by sales, marketing, and customer service departments. Some ERP systems include a CRM component, but most do not. A CRM system may be able to access data such as order history and invoices, both of which are usually managed in ERP systems, but this access is likely to be achieved via integration with an ERP solution.
The table below compares some of the functions of ERP and CRM systems:
| ERP | CRM |
|---|---|
| Financial management and accounting: budgeting, financial reporting, accounts payable, and receivable | Sales management: lead management, sales pipeline, forecasting |
| Human resources: payroll, benefits, employee development and management, and recruiting | Sales process automation |
| Manufacturing management: production planning, quality control, resource management | Marketing automation: campaign management, email marketing, social media marketing, lead nurturing |
| Supply chain management | Customer service |
| Fulfilment and inventory management | Customer data management: contacts, customer segmentation, customer profiling |
| Procurement | Customer self-service |
Integrating these two sets of systems can help organisations track the entire customer journey from initial lead capture through to fulfilment, invoicing, and customer support. The main benefit of an ERP and CRM integration is that the organisation will operate more efficiently by using one common data source.
Key Functionalities of ERP
Some of the key functionalities of ERP systems are:
- Financial management: Tracking, reporting on, and analysing critical financial data from across the business to inform planning and strategy.
- Data analysis: Analysing other forms of business data, such as inventory levels or employee performance, to improve decision-making.
- Automation: Using software to automate key business processes such as invoicing, reporting, and inventory reordering to save time and money.
- Integration: Integrating with other business systems, with the ERP system acting as a central resource for company-wide data and insight.
- Supply chain management: Tracking things like customer demand, inventory, manufacturing processes, and logistics.
- Human capital management: Managing recruiting, onboarding, talent development, performance management, benefits, payroll, and other key HR processes.
Key Functionalities of CRM Systems
Some of the key functionalities of CRM systems are:
- Customer data management: Managing customers’ contact details, interaction data, and preferences to get a comprehensive view of customers and improve engagements.
- Sales management: Keeping track of the sales pipeline, new leads, potential opportunities, and impending deals to help close deals.
- Email integration: Integrating built-in email functions or dedicated email platforms with CRM systems to maintain customer engagement and track interactions.
- Workflow automation: Automating processes such as sending marketing emails and scheduling appointments with customers to save time and money.
- Customer service and support: Managing customer support tickets, tracking service interactions, and creating a knowledge base to improve service quality.
Benefits of Implementing ERP
Many of the key benefits of an ERP system come from having a single, shared database for all financial and operational data. Some of the most important ERP system benefits include:
- Improved efficiency: An ERP system has the potential to eliminate inefficiencies related to disconnected systems and manual processes. Businesses may expect to experience accelerated workflows because information flows seamlessly between departments, reducing bottlenecks and unnecessary data entries.
- Enhanced productivity: A well-implemented ERP can boost employee productivity because it allows them to focus on higher-value activities as opposed to administrative tasks.
- Better decision-making: ERP systems can streamline reporting and facilitate forecasting by providing a unified source of financial and operational data. Employees can look into reports and easily digest data without the help of IT or finance teams. This helps businesses make faster, smarter decisions.
- Improved performance: The accurate, real-time information in ERP systems can help businesses respond quickly to market fluctuations. This is especially valuable in volatile economic conditions and in industries that are evolving quickly, where the ability to move quickly can determine business success.
- Reduced risk: ERP systems can be used to introduce tighter financial controls and improve audit trails.
Benefits of Implementing CRM
A good CRM solution should provide businesses with a central hub of customer data. This system can help businesses make informed decisions about selling to, marketing to, and serving customers and understand how those teams are performing. Some of the most important CRM system benefits include:
- Improved customer experience: With a centralised CRM system, sales reps will know whether the customers they’re speaking to have outstanding customer service tickets and can respond accordingly. Customer service teams will be able to quickly see whether a caller is a high-value customer and route them to the appropriate service tier.
- Enhanced sales performance: Because CRM systems offer customer insight and visibility through easily accessible dashboards, sales teams can manage sales pipelines better, learn more about their customers, understand their needs, and have a better idea of what to offer them, driving sales more consistently.
- More effective marketing: By bringing together customer data into one place, CRM systems can drive more effective marketing, informed by previous customer behaviours, purchases, preferences, and interests. Additionally, CRM systems can track and analyse past campaign performance to help improve future performance.
- Stronger customer relationships: More broadly, the data that CRM systems provide for sales and support teams can enable them to foster stronger, more personalised relationships with customers.
Can Businesses Benefit from ERP and CRM Systems Working Together? Yes. Whether an ERP system is integrated with a dedicated CRM system or has its own CRM module to provide specialised features, combining this back office and front office functionality can give businesses the grounding they need to grow.
| ERP benefits | Combined benefits | CRM benefits |
|---|---|---|
| Unified financial data | Single source of truth | Unified customer data |
| Automated back office processes | Streamlined operations | Automated front office processes |
| Improved financial management | Improved business performance | Improved customer relationships |
| Strategic forecasting | Enhanced decision-making | Sales pipeline forecasting |
Take Charge of Your Business and Your Customer Engagement With NetSuite ERP and CRM
With NetSuite ERP, businesses get an all-in-one, AI-powered cloud business management solution that can help them operate more effectively by automating core processes and providing real-time visibility into operational and financial performance.
As a solution that can be used within the NetSuite ERP platform, NetSuite CRM helps companies manage interactions with current and potential customers, partners, and suppliers in one place. This gives businesses all the capabilities of a conventional CRM solution but natively embedded within the NetSuite ERP platform, which provides a flow of information across the entire customer lifecycle.
ERP vs CRM FAQs
What is the difference between CRM and ERP?
The main difference between CRM and ERP systems is their core focus: ERP systems manage financial, manufacturing, HR, supply chain, and other back office functions, while CRM systems manage sales, marketing, customer service, and other front office activities.
Is CRM included in ERP?
Not always. Some ERP systems include CRM functionality as a component, but most CRM systems are standalone. When considering an ERP application suite that includes CRM functionality, assess whether the latter meets your needs or if a dedicated CRM system would be more beneficial.
