Cara Vollmer | Content Strategist | December 2022
Customer relationship management (CRM) and enterprise resource planning (ERP) are two options for companies looking to simplify and improve their business processes. Both are enterprise software solutions that connect data across multiple departments and automate manual, time-consuming tasks. And while they have some similar advantages and functionalities, they are not interchangeable—each serves its own distinct purpose.
CRM systems support and connect front-office business functions, such as marketing, sales, advertising, and customer service. ERP systems, on the other hand, primarily support and connect back-office functions, such as finance, supply chain operations, and HR.
Read on to learn more about the benefits of CRM and ERP, the differences between them, and whether one—or both—are right for your business.
Customer relationship management is enterprise software that automates how a customer interacts with your business. It is commonly part of a larger suite of customer experience (CX) applications that may include marketing, advertising, ecommerce, and customer service solutions. A CRM system tracks and stores all collected customer data, including customer communications with sales representatives, proposals, purchase history, and service requests.
Many CRM solutions supplement those customer records through third-party data sources to make sure that contact data is complete and up to date. All this customer data can then be shared throughout an organization, so users can better understand what happened at each touchpoint. Best-in-class CRM solutions also use artificial intelligence (AI) to analyze a customer’s history and suggest recommended next actions for sales.
By automating customer-related processes—including day-to-day customer interactions, marketing campaigns, and the sales cycle—CRM systems give businesses more time and insight to build better customer relationships and drive growth. With CRM, employees across sales, customer service, support, marketing, and other teams gain a complete, shared view of each customer’s business and history with the company. This data can be analyzed to create more consistent, personalized customer experiences and build the trust needed to increase sales. When properly deployed, CRM systems can:
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Enterprise resource planning is a type of business software that manages, automates, and connects day-to-day back-office business processes, such as accounting, procurement, project management, supply chain management, risk management, and human resources. An ERP suite may also include enterprise performance management: software that helps plan, budget, predict, and report on an organization’s financial results. Unifying these business processes within a single technology platform can streamline operations and simplify workflows. By collecting an organization’s shared transactional data from multiple sources, ERP systems enable the flow of related data between departments, eliminate data duplication, and provide data integrity by storing data in a central location—a single source of truth.
ERP systems collect and store data from multiple back-office departments in a common database. This unifies critical business functions, breaks down data silos, and gives employees a single source of truth for more accurate decision-making in financial management, supply chain management, human resources, and other areas. ERP also expedites business processes and drives productivity by automating many manual tasks, such as data entry, that can slow work down. Additionally, ERP systems can:
CRM and ERP systems both help businesses increase productivity, improve automation, and boost revenue generation; so you may still be wondering, What is the difference between CRM and ERP? Can one replace the other?
The main difference between the two is that ERP software is primarily used for financial data and operations, and CRM software is used on the sales and customer service sides of the business. Whereas ERP systems primarily support back-office functions (such as accounting, procurement, HR, and compliance), CRM supports front-office functions (think marketing, sales, and service).
Many ERPs contain CRM features, but CRMs do not contain ERP features or handle transactional data. Both CRM and ERP are critical components of a successful business IT system, and one cannot replace the other. See how Varsity Scoreboards gained the full benefits of both by integrating the two platforms.
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There are dozens, sometimes hundreds, of interactions between a company and a customer, and they occur across several departments with different charters and goals. The ideal is to deliver consistent interactions across all touchpoints, giving customers one unified experience. To deliver that kind of modern, frictionless experience, companies need to integrate their CRM and ERP systems to effectively share data, rather than maintaining two separate sets of data.
Take ecommerce sales, for example. Once a customer pays for products and services in the front office (online), the back office (finance) records the transaction details and revenue. If the CRM and ERP systems aren’t working together from one consistent set of data, mistakes can occur, orders can be lost, and profits can go unreported.
By linking and analyzing front-end CRM data with back-office ERP data, companies can also understand customer habits to improve budgeting and forecasting; provide faster, more personalized customer experiences; and anticipate future demands. Sales reps can also track new opportunities, create quote requests, and merge new quotes with existing accounts in real time.
Most importantly, CRM and ERP integration can drive profitability. Technology research firm Nucleus Research found that CRM integration with other internal applications brought “productivity increases across sales, service, and operations and a 20 to 30 percent growth in business.”
To adapt to the demands facing modern businesses and gain a competitive advantage, leaders need the right tools. Now that we’ve covered the differences between CRM and ERP, you can hopefully make a more informed decision about the many options.
Whether it’s to improve customer retention, streamline accounting, increase sales, or get a better handle on supply chain issues, CRM and ERP systems help businesses by unifying data on a single platform and giving a detailed view into all processes. This makes life easier for business leaders, employees, and customers.
Oracle Fusion Cloud ERP and Oracle Advertising and Customer Experience (CX) use AI and predictive analytics to help organizations deliver exceptional customer service, simplify common tasks, and stay current. Take advantage of a unified cloud platform that provides a complete view of every customer engagement and every dollar spent.
Can ERP replace CRM?
No. While ERP and CRM share common benefits, they are not interchangeable.
What is the difference between CRM and ERP?
CRM supports front-office functions, such as sales, service, and marketing, and ERP supports back-office functions, such as accounting, operations, and HR.
Can your ERP be integrated with your CRM?
Yes, with the right plan in place, the two can be connected to synchronize business data, manage customer relationships, and drive growth.
Who should use an ERP?
Any business that wants to unify their back-office data into one, centralized location and automate finance, operations, and HR processes.
Who should use a CRM?
Any business that wants to unify their front-office data into one, centralized location, deliver better customer experiences, and create better products and services.