CRM vs ERP: What’s the difference and which do you need?

As your business grows, you might reach a point where spreadsheets and basic software no longer meet your needs. Systems that worked when your business was smaller no longer cut it as your needs grew in complexity. This is a common problem businesses face.

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If this sounds like your business, we are here to help demystify your options and support you to make worthwhile changes.

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CRM (Customer Relationship Management) and ERP (Enterprise Resource Planning) systems are solutions businesses can use to manage data. These two systems can complement each other, but they are often confused. So, before we explore which system best suits your business needs, let's look at what they do.

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What is a CRM?

CRM systems focus on managing customer data, sales pipelines, marketing, service delivery, and client/customer support. Some of the key features of a CRM system include:

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Lead and contact management
Sales tracking
Opportunity management
Sales automation
Marketing automation
Customer service tools
Sales reporting
Marketing reporting

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CRMs are typically used by sales teams, marketing departments and customer support teams looking to streamline and track conversations with leads, contacts and prospects, and drive value through relationships.

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If you would like to dive deeper into CRM, read our ‘Guide to Customer Relationship Management’ blog.

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What is an ERP?

ERP systems focus on integrating core business functions like finance, HR, inventory and supply chain into a single system. Some of the key features of a CRM system include:

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Accounting and finance
Inventory and order management
Human resources
Procurement, supply chain, and logistics

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ERP systems are typically used by operations teams, finance teams and upper management.

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CRM vs ERP Compared

The image below shows the main differences between CRM and ERP systems, including thier primary functions, users and the data they handle. Click here to download this image as a PDF for your reference.

A table comparing CRM and ERP systems, including their main functions, goals and users.

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Is a business likely to need a CRM system, an ERP system or both?

The image below shows the main industries and business characteristics that use CRM systems, ERP systems, and both systems. Click here to download this image as a PDF for your reference.

A table showing which businesses are likely to use CRM and ERP systems, their main characteristics and example businesses.

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Do you need a CRM, an ERP, or both?

So, which system is the right fit for your business? The answer could be one, neither, or both.

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As a general rule of thumb:

If you have a sales team, but no centralized customer data, or you want to grow sales or manage customer relationships better, then you probably need a CRM.
If you’ve outgrown your accounting software or are struggling with inventory, payroll, or financial reporting, you probably need an ERP.
If your business is growing fast and you need sales growth and operational efficiency, or if you want end-to-end visibility, then you would probably benefit from CRM and ERP.

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Regardless of your situation, these don’t have to be independent, disconnected, siloed systems. Systems integration and workflow automation experts can build a system that serves your sales, marketing, operations, and finance teams without compromising on features or value with all-in-one technologies.

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Book a free 15-minute assessment call to learn more...

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Integrating your CRM or ERP system

Lots of available platforms offer integrations between CRM and ERP tools, and some providers offer both CRM and ERP systems within one tool. Finding out how well systems integrate often involves extensive knowledge of the systems and the skills to be able to set them up correctly.

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We recommend aligning your decisions with your current business pain points and your growth stage.

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Book a 15-Minute CRM/ERP fit assessment

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Wrapping up

If your business needs are mainly focused on the customer side, a CRM system is probably the best fit for you. If your business needs are mainly focused internally, an ERM system is probably the best fit for you. If you need help with both, then finding a solution that integrates seamlessly with your current systems is vital.

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