Alphabet Soup, Oh My! What You Really Need to Know About ERP vs CRM

In the software world, acronyms are often thrown around incorrectly—and with wild abandon—leading to a giant, confusing mess of alphabet soup. This is particularly the case when it comes to comparing ERP vs CRM software.

ERP and CRM
 

Today, we’re going to clear a few questions up for you, namely:

What Is ERP?

Enterprise resource planning (ERP) software is heavy duty software that assists with every aspect of a business’s operations. It encompasses sales and marketing, human resources, accounting, manufacturing, order management, distribution and more.

It can be a single suite of software from one vendor (the traditional way), or multiple software applications from different vendors integrated with each other (known as the “postmodern” approach—you can read more about that here).

What Is CRM?

Customer relationship management (CRM) software is used by sales, marketing and business development professionals to:

  • Keep track of customers and their purchasing behavior
  • Identify business opportunities and new sales leads
  • Streamline the sales process and reduce repetitive work
  • Automate marketing processes, e.g., email or online advertising campaigns
  • Manage social media accounts and campaigns
  • Facilitate better support for current customers

In general, businesses usually rely on multiple applications to do all of these things, though some vendors do offer all-inclusive CRM suites that cover pretty much everything.

How Are the Two Related?

There is some confusion surrounding these terms among prospective software buyers. Many vendors will market their software as “ERP software,” as ERP has almost become synonymous with general business software. Sometimes these software suites are labeled inaccurately.

It’s not uncommon for a prospective buyer to call us up and say they’re not sure if they need a new ERP or CRM system. They know what the functions of a CRM system are, but they’re not sure if they can get those same functions out of an ERP system. They may not know if they need the additional applications that an ERP system offers.

In short, most ERP systems will have CRM components, or the ability to integrate with a third-party CRM system.

Generally, the CRM components of ERP systems will not be as fully featured as best-of-breed or standalone CRM platforms.

Most ERP systems that have CRM components will offer marketing and sales force automation. However, these ERP systems might lack features such as call center support, community management or social media management.

If they do have these components, they might not be as fully featured as their standalone counterparts. Refer to the chart below to better understand the relationship between CRM and ERP:

ERP vs CRM

erp-crm-venn-diagram

Do I Need an ERP System, a CRM System, or Both?

If you’re just looking to improve your sales and marketing processes, and you’re happy with the software you’re using for things like accounting and human resources, then you probably just need a new CRM system.

On the other hand, if you’re looking to overhaul all of the software your business is using, then you should consider investing a new ERP system.

But say you find an ERP system that’s almost perfect. It checks all of the boxes… except when it comes to the CRM components.

Don’t worry—these days, it’s easier than ever to integrate a CRM system with your ERP system. And if you’re looking at standalone CRM systems, chances are you’ve been checking out Salesforce.

Because Salesforce has become so dominant in the CRM world, many ERP vendors are realizing that if they can’t beat ‘em, they should join ‘em. And by “join ‘em,” I mean “make it easy to integrate with Salesforce.”

Microsoft in particular is integrating Salesforce with more of its offerings, including Skype for Business, OneNote and Windows 10. Salesforce also offers a deep knowledge base, allowing developers to work with its API in order to perform custom integrations with major ERP platforms like SAP and Oracle.

Still can’t decide if ERP or CRM is right for you?

Don’t worry, we’ve got your back!

Email me any questions you might have at forrest@softwareadvice.com.

• Check out our detailed buyer’s guides for more information about ERP and CRM software.

• Narrow down your options and get free price quotes for ERP and CRM software by filling out a short questionnaire.

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Enterprise Resource Planning Software Buyer Report – 2016

CRM Software Small Business Buyer Report – 2016

How ERP Software Selection Works

Compare ERP Software