ERP and CRM Comparison
The boundaries between different types of enterprise software are constantly shrinking. ERP and CRM used to be fully separate systems, but vendors are increasingly developing a wide array of features to tackle issues from end to end of manufacturing and distribution businesses. This gives customers the option of gaining comprehensive solutions from a single vendor.
However, it can also make selecting enterprise software more difficult. With the lines blurring between ERP and CRM, customers struggle to determine which kind of system they need: ERP, CRM or some combination of both.
To help you sort through the confusion, we’re laying out the differences between ERP and CRM. We also give you some tips for enjoying the functionality of both software solutions.
What is ERP Software?
The primary difference between ERP and CRM is their primary functionality and intended end users. Enterprise resource planning (ERP) software consists of a wide array of business applications designed to manage back-end processes and data. The software promotes visibility and efficiency to optimize manufacturing and distribution performance. Some of the common components of ERP include:
- Financial Management: The financial management module supports accounting activities and provides full control over fiscal processes. It often includes a general ledger, accounts receivable, accounts payable and financial planning tools.
- Supply Chain Management: This module enables users to manage their supply chains from raw material to delivery. Common tools include inventory management, distribution requirements planning, purchase management and supplier relationship management.
- Production Management: The production management module allows users to manage and optimize shop floor performance through real-time metrics and tracking capabilities. Job management, lean production, quality assurance and manufacturing execution system (MES) features are usually included.
Most ERP users aren’t in regular contact with customers. Instead, they’re on the factory floor, in the warehouse or in accounting offices managing the shop floor, scheduling deliveries or performing other back-end processes. Since these operations require a high level of precision and repetition, ERP solutions must include some rigidity to consistently execute tasks. In recent years, ERP has become increasingly available to manufacturers and distributors of all sizes. Its dynamic features and insights make the software a must for business growth.
What is CRM Software?
Unlike ERP, customer relationship management (CRM) software consists of business applications designed to manage front-end processes and data. It also promotes visibility and efficiency, but its purpose is to optimize sales and, in many cases, marketing and customer service. Common CRM features include:
- Sales Force Automation (SFA): SFA is at the core of all CRM solutions, automating sales processes such as order processing, contact management and forecast analysis. This functionality allows sales teams to work faster and more accurately.
- Contact Management: This tool allows users to segment contacts, enabling sales, services and marketing departments to provide highly personalized customer experiences.
- Lead Management: CRM utilizes advanced technology and lead scoring functionality to help sales reps determine how to follow up with leads. This allows your sales team to utilize the right strategies on the right leads.
Another difference between ERP and CRM is that CRM users are in constant contact with customers. Sales, services and marketing departments use sales analytics and data to optimize campaigns, respond rapidly to customers and shorten sales cycles. Front-end operations require a greater deal of flexibility, so CRM is also much less rigid than ERP software.
CRM vendors are often at the cutting edge of software innovation, leading the industry in cloud computing, mobility and artificial intelligence (AI) technology. With advanced functionality and deep customer insights, the software is essential for supporting modern consumer demands.
How Can You Enjoy Both?
With ERP handling the back office and CRM taking care of the front office, it makes sense that many businesses try to utilize both solutions to improve their performance from top to bottom. But it doesn't make sense to run these systems completely separately. Some processes, such as demand planning and quoting, involve both back and front offices. When your ERP and CRM aren't working together, you risk incurring roadblocks in these operations or entering duplicate, erroneous data into multiple applications.
As we mentioned in the introduction, some vendors include both ERP and CRM tools. However, the CRM functionality offered by ERP vendors tends to be too light. CRM vendors also lag in providing quality ERP solutions. Some smaller businesses are able to make lighter offerings work, but with the ease and availability of premier integration solutions, we recommend the best-of-breed approach.
The best-of-breed approach involves choosing the best vendors for each solution. An integration application can then connect the two pieces of software, creating a single source of truth for your enterprise data. That means data entered into your ERP is instantly available in your CRM, and vice versa. Everyone can gain real-time insights without logging into unfamiliar systems. That means your sales reps will have access to pricing and inventory levels right in their CRM, so they aren’t digging through the rigid ERP solution.
Unfortunately, not all integrations are easy. Custom connectors require painstaking coding and costly maintenance. That’s why we recommend a pre-built application, which can be rapidly installed to support common sync points. With a pre-built integration solution, you can generate more value from your ERP and CRM investments without the hassle of coding.
ERP and CRM software might differ in their core functionality, but they both promote greater productivity and insights. Together, ERP and CRM can take your enterprise to a whole new level.
The best way to unite ERP and CRM is through Unity. Developed by Datix’s leading ERP and CRM experts, Unity is a pre-built application designed to connect Epicor ERP with Microsoft Dynamics 365 CRM or Salesforce. Our certified consultants rapidly install and manage Unity to take the stress out of software integration. A fully customizable and scalable solution, Unity supports your unique business needs as you change and grow.
Now that you know the difference between ERP and CRM, start equipping your enterprise with the right software to optimize your performance. Reach out to Datix today!