In today’s demanding business landscape, organizations need efficient systems to manage their operations and customer relationships, and improve overall productivity. Two popular solutions that often come into play are Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM).

While both ERP and CRM play a crucial role in enhancing business performance, understanding their differences is essential for effective implementation. In this guide, we’re going over everything you need to know about ERP vs. CRM — as well as top software picks based on our reviews.

Understanding ERP (Enterprise Resource Planning)

If you’re looking to congregate your business’s data and resources into a single source, you may want to consider an ERP system. Take a look at how it works.

Definition and Purpose of ERP

An ERP is a software system that integrates various functions and processes within an organization, providing a centralized platform for managing key areas. Its primary purpose is to streamline business processes, enhance decision-making, and ensure effective resource management.

Key Features and Functionalities

Key features of ERP include a common database where information is stored in real-time, ensuring data accuracy and accessibility across departments. This enables different teams to collaborate seamlessly and eliminates the need for duplicating data.

ERP also offers functionalities like automated workflow processes, improved data analytics and reporting, and standardized business processes to ensure consistency and efficiency.

Benefits and Challenges of Implementing ERP

Implementing an ERP system can come with several benefits for businesses. It allows for streamlined operations by eliminating manual processes, reducing redundant tasks, and improving overall productivity.

Real-time data access enables better decision-making by providing accurate insights and forecasting capabilities. ERP facilitates effective resource management by optimizing inventory levels, managing product lifecycles, and enabling efficient supply chain and customer relationship management.

That said, there may also be some challenges associated with ERP implementation. High initial investment and ongoing maintenance costs can deter some businesses from adopting ERP systems. However, careful planning, proper training, and organizational readiness can help address potential challenges that may arise.

Target Users

ERP systems are suitable for businesses of all sizes and industries. Small businesses can benefit from streamlining their operations, while larger organizations can leverage ERP to consolidate and manage their vast and diverse operations. 

Ultimately, any business seeking to improve efficiency, enhance decision-making, and optimize resource management can greatly benefit from implementing ERP.

Popular ERP Software Solutions

NetSuite

Key Features: Oracle’s NetSuite offers businesses an all-in-one solution for their financials, eCommerce, inventory, supply chain, and other operations. It’s designed to provide a comprehensive suite of services that streamlines the tracking and management of critical business data in one centralized system.

Pricing: Starts at $99/per month – which doesn’t include implementation costs.

Pros:

• Cloud-based, which makes it easier and more cost-effective to deploy than on-premise ERP solutions
• The system is highly customizable with a wide range of features and integrations to fit any business’s needs
• It offers strong financial management tools, as well as features to help with marketing, inventory, and supply chain management

Cons: 

• NetSuite can be complex and difficult to learn, especially if you don’t have a developer or IT expert on your team
• It can be expensive, as the cost of the system depends on the number of users and features chosen

Get started with Oracle’s Netsuite

SAP

Key Features: SAP offers a comprehensive suite of ERP applications that help businesses manage their operations, such as financials, human resources, customer relationship management (CRM), supply chain, and manufacturing.

Pricing: Starts at $199/per user and one-time implement costs start at $40,000.

Pros: 

• SAP includes powerful analytics that help businesses identify trends in their data. These insights can be used to make better decisions and improve performance
• SAP provides a secure environment with encryption and authentication features to protect your organization’s data

Cons:

• SAP is one of the most expensive ERP systems on the market. It requires significant upfront costs and ongoing maintenance fees
• SAP’s solutions are powerful but complex, making it difficult for new users or those without technical knowledge to use them

Get started with SAP

Microsoft Dynamics 365

Key Features: A cloud-based solution from Microsoft that offers modules for finance, human resources, customer service, field service, sales, supply chain management, and more. It provides businesses with an integrated suite of applications and services to help them manage their operations efficiently.

Pricing: Starts at $70/per month per user.

Pros:

• Microsoft Dynamics 365 offers a full suite of tools for finance, HR, customer service, field service, sales, supply chain management, and more
• Provides scalability and flexibility to quickly adapt to changing business needs
• With its intuitive user interface and customizable dashboards, it’s easy to use and learn
• One of the more affordable ERP systems on the market

Cons:

• The software can be slow to respond when processing large amounts of data
• The integration with other applications is limited as well as advanced customization features

Get started with Microsoft Dynamics 365

Understanding CRM (Customer Relationship Management)

CRM systems can help businesses improve customer interactions and streamline operations. Let’s take a look at how they work.

Definition and Purpose of CRM

A CRM, in simple terms, is a software system that helps businesses manage their relationships and interactions with customers. Its primary purpose is to enhance customer satisfaction and drive sales growth by providing a centralized platform for storing customer data, automating various processes, and facilitating effective communication.

Key Features and Functionalities

A CRM typically includes tools for contact management, which allows businesses to store and organize customer information, such as names, addresses, and purchase history. Additionally, CRM provides tools for tracking customer interactions, such as phone calls, emails, and meetings, enabling businesses to maintain a comprehensive record of customer communication.

CRM also offers sales automation functionalities, such as lead generation, opportunity management, and pipeline tracking. These features enable sales teams to effectively manage their leads and convert them into paying customers.

Similarly, CRM systems often integrate with marketing automation tools, allowing businesses to segment their customer base and create targeted marketing campaigns.

Benefits and Challenges of Implementing CRM

Implementing a CRM system can yield numerous benefits for businesses. For starters, it can significantly improve customer satisfaction by providing personalized experiences based on individual preferences and purchase history.

A CRM also facilitates efficient sales processes, leading to increased sales revenue. Moreover, CRM systems enable businesses to generate accurate and timely sales reports, helping in data-driven decision-making.

However, one potential limitation is the complexity associated with implementing CRM systems, especially in large organizations. Adequate strategic planning and employee training are crucial to ensure successful implementation.

Additionally, integrating a CRM with existing systems and processes may require technical expertise. Nevertheless, in many cases the benefits of implementing CRM far outweigh the challenges, making it a valuable tool for organizations of all sizes.

Target Users

A CRM is particularly beneficial for sales teams, as it provides a centralized platform for managing leads, tracking customer interactions, and monitoring sales metrics.

However, a CRM’s value extends beyond sales, as customer service representatives can also benefit from quick access to customer data, allowing them to provide personalized and efficient support.

Popular CRM Software Solutions

Zoho

Key Features: Designed to help businesses of all sizes effectively manage their customer relations. It offers a suite of integrated modules for marketing, sales, service, and support automation. Zoho CRM also provides features such as contact management, task tracking, lead scoring, and reporting and analytics.

Pricing: Starts at $14 per user/per month

Pros:

• Zoho CRM is user-friendly and easy to navigate. It allows users to quickly create and manage data, such as contacts, leads, opportunities, customer accounts, and more
• Zoho CRM is highly customizable with dozens of features that can be tailored to fit the specific needs of a business. It also includes many integrations with other popular software systems like QuickBooks and Salesforce
• Zoho CRM is cost-effective, offering a variety of plans to suit the needs and budget of any size business. It also provides a free version with basic functionality for companies just getting started

Cons:

• Zoho CRM is not as comprehensive as some other CRM systems, such as Salesforce or Oracle. It lacks certain features that are available in more expensive systems
• Zoho CRM’s mobile app is not as robust as its desktop version, and it can be difficult to navigate for users who are unfamiliar with the system

Get started with Zoho

Oracle Sales

Key Features: Oracle’s CRM is designed to help organizations manage all aspects of their customer relationships, including sales, marketing, customer service, and support. The suite comprises several modules that range across Sales Cloud, Service Cloud, Marketing Cloud, Commerce Cloud, and Social Networking.

Pricing: Starts at $65 per user/per month

Pros: 

• Oracle’s CRM can easily scale depending on the size and needs of an organization. It can be deployed in the cloud or on-premise, which means organizations don’t need to worry about hardware and software updates.
• Oracle’s CRM allows organizations to customize their CRM processes as needed, so they can tailor the system to meet their unique business requirements.

Cons:

• Oracle’s CRM is not necessarily cheap, and it may not be the most practical option for small businesses or startups with limited budgets.
• The system can be difficult to learn and implement due to its complexity.

Get started with Oracle

Salesforce

Key Features: Helps companies of all sizes to manage their sales, marketing, customer service, and support processes. The Salesforce CRM provides comprehensive features and functionality that enable users to manage their sales, marketing, customer service, and support processes. This means businesses can track customer interaction, streamline operations, and provide better customer service.

Pricing: Starts from $25 per user/month

Pros: 

• Salesforce’s CRM offers various automation capabilities, such as automated emails and lead scoring, which help users save time and reduce manual work
• Salesforce’s CRM can be integrated with a variety of third-party applications to further enhance its functionality. This allows users to tailor the system to their specific needs

Cons:

• Salesforce CRM can be complex to use and understand, especially for users who are not familiar with the platform. For more customized features, you may need to pay for increased support. 

Get started with SalesForce

ERP vs CRM: What Does Your Business Need?

Both an ERP and CRM system can be essential to helping your business streamline its processes and increase efficiency. Let’s get into details on the differences between the two to help you determine which one is right for your business.

Assess Business Needs and Goals

ERP software integrates various functions such as finance, inventory management, human resources, and production planning into one comprehensive system. 

On the other hand, CRM focuses on managing and improving customer relationships, sales, and marketing efforts. Determine which aspects of your business need improvement and align them with the functionalities offered by each system to know which would have the greatest impact.

Analyze Scalability and Customization Options

ERP systems are designed to handle complex business operations and can accommodate the needs of large enterprises. They offer a high level of customization and flexibility, allowing businesses to tailor the software to their specific requirements.

In contrast, CRM systems are more focused on managing customer data and interactions, making them suitable for businesses that prioritize sales and marketing activities.

Consider Potential Challenges of Implementation and Integration

Implementing an ERP or CRM system requires careful planning, coordination, and employee training. Additionally, integrating either system with existing software and databases can be a complex task.

Assess your company’s technical capabilities and resources to determine whether you have the necessary support to successfully implement the chosen system.

Consult With Industry Experts and Peers

Seek guidance from professionals who specialize in ERP and CRM implementation and have experience working with businesses similar to yours.

Networking with industry peers who have already implemented these systems can help you understand their challenges, successes, and lessons learned, providing you with valuable feedback and helping you make an informed decision.

Evaluate Cost and Return on Investment

Both ERP and CRM systems require a significant investment, including licensing fees, implementation costs, and ongoing maintenance expenses. Consider the long-term benefits and potential cost savings that the chosen system can bring to your business.

Analyze the potential return on investment, including increased productivity, improved customer satisfaction, and reduced operational costs, to justify the expense.

Integrating ERP and CRM: How They Complement Each Other

Integrating ERP and CRM systems offers numerous advantages that can greatly enhance the efficiency and effectiveness of your business operations. These two systems, although serving different functions, share a common goal of improving overall organizational performance by streamlining processes and providing comprehensive data insights.

Implementing both ERP and CRM systems can enable seamless data flow between various departments and functions within an organization. This means that sales, marketing, customer service, finance, and supply chain can access real-time, accurate, and consistent information about customers, orders, inventory, and financial transactions. This shared data eliminates redundancy and duplicate entries, enabling departments to work in sync and make informed decisions that benefit the company as a whole.

ERP vs. CRM: Navigating the Path to Business Efficiency

In the ever-evolving landscape of business technology, the choice between ERP and CRM solutions isn’t about one being superior to the other, but rather about understanding your organization’s unique needs.

By adopting an integrated approach, organizations can unlock the full potential of their data and leverage it to drive growth, competitiveness, and success.

FAQs 

Do I need CRM or ERP or both?

The need for a CRM or an ERP system or both depends on your business’s specific requirements. Combined, both can be powerful tools for data management and optimizing your business’s operations. However, if you can only afford to implement one, consider which one would address your immediate needs the most. 

ERP vs CRM which is better?

Neither ERP nor CRM is inherently better; they serve different purposes. ERP is ideal for managing core business processes, optimizing operations, and handling financial aspects. CRM, on the other hand, is designed to enhance customer engagement, sales, and marketing efforts.

What is the best ERP/CRM for self-hosting?

The best ERP or CRM system for self-hosting depends on your specific requirements, budget, and technical expertise. Odoo, ERPNext, YetiForceCRM, and Tryton are some of the solutions out there.

Is SAP an ERP system?

Yes! SAP ERP is known for its robust features and is utilized by many large enterprises to streamline their operations.

Is Oracle a CRM or ERP?

Oracle offers both CRM and ERP solutions.