CRM

ERP and CRM: What's the difference?

Liucija Adomaite
LAST UPDATED
May 24, 2024
READING TIME
7 min.

Do you want to know how to choose between ERP and CRM? You came to the right place.

This article explains everything you need to know about ERP and CRM software, including their main differences and similarities, key features, price,andhow to get the most out of them.

ERP vs. CRM: What do they mean?

An enterprise resource planning (ERP) system helps companies manage their finances and resources, control costs, and meet production goals. 
A customer relationship management (CRM) software helps companies manage the sales cycle and customer experience.

The Overview: ERP vs. CRM

An ERP system is a central database that integrates and connects automations and efficient resource allocation between company functions. The goal of ERP is to establish a unified system across different departments like finance, accounting, inventory, supply chain, HR, and sales.

On the other hand, CRM is a powerful tool for managing all customer relationships. Its goal is to foster stronger connections with your leads and clients. By implementing a CRM system, you can boost work efficiency, elevate sales teams' performance, enhance customer satisfaction, and ultimately, drive revenue growth. 

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What is the difference between ERP and CRM?

The key difference between ERP and CRM is that ERP is mainly used for financial data and the finance department, while CRM is mainly used for customer data by the sales and customer service teams. Hence, people sometimes refer to the ERP as the back office and the CRM as the front office. 

Another difference between ERP and CRM systems is that some ERP tools can include a CRM function, but CRM software systems usually do not.

For example, if you want to access order invoices or history, you can only do so by integrating ERP into your CRM (like Salesforce). ERP stores and handles all transactional data.

What are the similarities between ERP and CRM?

Both ERP and CRM utilize databases to store and manage data. Both of them allow for efficient organization, retrieval, and analysis of the information.

You can also deploy ERP and CRM systems in the same way. There are two modes of deployment for both ERP and CRM: on-premise and cloud-based (Software as a Service).

Cloud-based SaaS systems are now more popular than on-premise for both ERP and CRM systems since they are easier to use, are better for scalability, give more flexibility, require fewer internal resources, and have lower upfront costs.

There are also similarities between ERP and CRM historically. NetSuite (ERP) and Salesforce (CRM) pioneered their respective SaaS fields. However, CRM systems were the first to undergo cloud transition because ERP was used to manage sensitive financial data.

CRM systems, on the other hand, handle customer data, which was seen as less susceptive to privacy breaches at the time. CRM proved to be easier to design and build, while ERP initially required more effort to move to the cloud.

ERP vs. CRM: Pros and Cons

ERP pros:

  • Central database
  • Cross-functional digital integration
  • Fewer errors
  • Duplicate data elimination
  • Easier decision-making
  • Greater visibility into company performance
  • Analytics
  • Predictive reporting
  • Automations
  • Financial and resource-allocation control
  • Cross-functional collaboration
  • Scalability

ERP Cons:

  • Steep learning curve
  • Setup requires large data migration 
  • Requires investment of time, funding, and human resources
  • Per-user pricing models can inflate costs over time
  • Company-wide transformation requires buy-in and change management

CRM pros:

  • Plans for every budget
  • 360-view of customers, prospects, and leads
  • Lead scoring and nurturing
  • Customer interaction tracking
  • Reporting
  • Predictive insights
  • Automations
  • Competitor analysis
  • Higher customer lifetime values

CRM Cons:

  • Per-user pricing models can inflate costs over time
  • Steep learning curve
  • Risk for customer-data security breaches
  • You may require tech support

Do you need an ERP or a CRM?

Choose an ERP system if your company goals revolve around financial and inventory management and streamlined production. 

Choose CRM if your goals are to close more sales by attracting and engaging leads, building close customer relationships, and increasing their overall satisfaction with your product or service.

ERP and CRM examples

The most popular examples of ERP systems are:

  • SAP S/4HANA: A robust ERP system offered by SAP. It caters to large enterprises with complex business needs across various industries.

  • NetSuite: A comprehensive cloud-based ERP solution from Oracle, suitable for mid-sized businesses across various industries.
  • Acumatica Cloud ERP: A cloud-based ERP system offering strong financial management features and catering to various business sizes and industries.
  • Workday: A cloud-based ERP system focused on human capital management (HCM) and finance, ideal for mid-sized and large organizations.
  • Microsoft Dynamics 365: A suite of business applications from Microsoft, including an ERP module (Dynamics 365 for Finance and Operations). It's a good option for businesses already using other Microsoft products.

The most popular examples of CRM systems include:

  • Salesforce Sales Cloud: A dominant player in the CRM market, Salesforce Sales Cloud offers a comprehensive suite of features for sales force automation, lead management, and opportunity management.
  • HubSpot CRM: A popular CRM option for businesses of all sizes, offering a free CRM version alongside paid plans with marketing, sales, service, and content management features.
  • Zoho CRM: A well-known CRM platform that offers a variety of features at an affordable price point. It is a good option for businesses looking for a CRM with a strong focus on sales and marketing.
  • Microsoft Dynamics 365 Customer Service: A customer service-focused module within the Microsoft Dynamics 365 suite, offering features for case management, knowledge base management, and omnichannel customer support.

Key Takeaways

Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) are two distinct types of software that serve different purposes but can complement each other in a business setting.

ERP systems are designed to manage company resources, finances, and supply chains to improve efficiency and reduce costs, acting as the backbone of a company's financial and operational processes.

In contrast, CRM software focuses on managing interactions with current and potential customers, aiming to improve sales, customer service, and business relationships.

Despite their differences, both ERP and CRM systems utilize databases for information management and offer cloud-based deployment options, making them scalable and flexible for businesses of various sizes.

Businesses must choose between these systems based on their specific needs: ERP for resource and financial management or CRM for enhancing sales and customer relations.

Make sure you check our in-depth guide about CRM on choosing the best CRM software for your business, as well as this article about the most popular types of CRM to have a better understanding of how customer relationship management works.

If you are looking for the best software to manage your personal contacts, this article about personal CRM is also a must-read.

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G2 Rating
Price
Best for
Standout feature
Con
4.9
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$30/mo
$75/mo
$2,999/mo
Large, distributed sales teams
AI evaluation precision, gamified KPIs
Lack of tracking system
4.6
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Not publicly available
Sales operations and finance teams
Powerful configurability
Limited training resources and complex to navigate
4.4
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Not publicly available
Mid-market and enterprise businesses
Comprehensive incentive management
Potentially high cost and steep learning curve
4.7
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$15/user/mo
$40/user/mo
Enterprise: custom price
Complex sales structures and businesses of all sizes
Complex sales structures and businesses of all sizes
Steep learning curve
4.6
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star-half
Not publicly available
Collaborative teams
Connected planning
Complexity and steep learning curve
4.6
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star
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star-half
Not publicly available
Companies with complex sales structures
Complex incentive compensation management (ICM) with high efficiency and accuracy
Complexity for smaller teams and potentially high costs
4.7
star
star
star
star
star-half
Not publicly available
Companies who want to automate commission calculations and payouts
Simplicity and ease of use
Lack of features like redirection
4.7
star
star
star
star
star-half
$30/user/mo
$35/user/mo
Custom: upon request
Businesses that need a comprehensive and user-friendly sales compensation management software
Ease of use and adoption
Lack of ability to configure the product based on user needs
4.8
star
star
star
star
star-half
Not publicly available
Companies with modern sales culture and businesses who want real-time insights
A built-in dispute management and real-time visibility
Users say it works slowly, customer support is slow
4.9
star
star
star
star
star
$30/user/mo
$50/user/mo
Smaller sales teams
Powerful automation
Lesser user base and average user interface
4.7
star
star
star
star
star-half
Not publicly available
Companies with scalable needs
Automated Commission Calculations
Lack of filtering by date, no mobile app
ERP vs. CRM
ERP
CRM
Summary
Backbone of a business's internal operations.
Backbone of customer-centric interactions and operations.
Goal
To centralize and streamline core business processes in a company.
To increase customer experience, satisfaction and loyalty, and boost sales.
Focus
Internal operations and processes across departments (finance, accounting, inventory, supply chain, HR, and sales).
All interactions with leads and customers.
Manages
Internal business data like financial data, inventory levels, production details, supply chain, HR info.
All customer data like contact info, purchase history, communication history, customer preferences and more.
Users
Finance, accounting, operations, supply chain, and HR departments.
Customer-facing teams like sales, marketing, and customer service.
Benefits
Streamlines operations, improves data accuracy, enhances decision-making, boosts collaboration, increases productivity.
Improves customer relationships, increases sales, strengthens customer service, personalizes marketing campaigns, provides insights.
Price
$150 per user per year on average.
$10 to $30 per user per month on average.
PRM Tool
Rating
Feature
Pro
Con
Mobile App
Integrations
Free Plan
Pricing
4.65
star
star
star
star
star-half
Org-wide alignment
User-friendly layout and database
Suboptimal as a personal CRM
square-check
Lack of tracking system
square-check
Team: $20/month
Business: $45/month
4.7
star
star
star
star
star-half
Social Media Integration
Easy contact data collection
No marketing/sales features
square-check
Lack of tracking system
square-xmark
7-day trial
$12/month
4.75
star
star
star
star
star-half
Block Functions
High customization capability
Not a dedicated CRM
square-check
Limited
square-check
Plus: €7.50/month
Business: €14/month
N/A
Open-source
Open-source flexibility
Requires extensive manual input
square-xmark
Limited
square-check
Self-hosted
$9/month or
$90/year
3.1
star
star
star
Simple iOS app
Ideal for non-tech-savvy users
iPhone only
square-check
iOS only
Limited
square-xmark
1-month trial
$1.49/month or
$14.99/month
3.6
star
star
star
star-half
Smart Contact Management
Feature-rich and flexible
Reported bugs
square-check
Rich
square-xmark
7-day trial
Premium: $13.99/month
Teams: $17.99/month
4.4
star
star
star
star
star-half
Customizable Interface
Customizable for teamwork
Pricey for personal use
square-check
Rich
square-xmark
Standard: $24/member
Premium: $39/member
4.7
star
star
star
star
star-half
Integrated Calling
Integrated Calling
Too sales-oriented & pricey
square-check
Rich
square-xmark
14-day trial
Startup: $59/user/month
Professional: $329/user/month
4.8
star
star
star
star
star
Business Card Scanning
Business Card Scanning
Mobile only
square-check
Limited
square-check
$9.99/month
4.45
star
star
star
star
star-half
160+ app integrations
Comprehensive integrations
No free app version
square-check
Rich
square-xmark
14-day trial
$29.90/month or
$24.90/month (billed annually)
Capterra Rating
Free Trial
Free Plan
Starting Price (excluding the free plan)
Maximum Price (for the most expensive plan)
Best for
4.5
star
star
star
star
star-half
square-check
14-day
square-check
€15/month/seat billed annually
€792/month/3 seats billed annually + €45/month for each extra seat
Versatility and free plan
4.2
star
star
star
star
square-check
30-day
square-xmark
But it offers reduced price to authorised nonprofit organisations
€25/user/month
€500/user/month billed annually (includes Einstein AI)
Best overall operational CRM
4.3
star
star
star
star
star-half
square-xmark
square-check
Limited to 3 users
Comprehensive incentive management
€52/user/month billed annually
Small-medium businesses and automation
4.5
star
star
star
star
star-half
square-check
14-day
square-xmark
€14/seat/month billed annually
€99/seat/month billed annually
Sales teams and ease of use
4.1
star
star
star
star
square-xmark
square-check
Limited 10 users
$9.99/user/month billed annually
$64.99/user/month billed annually
Free plan for very small teams up to 10
CRM goal
Increase the sales conversion rate for qualified leads from marketing automation campaigns by 10% in the next 6 months.
SMART Breakdown
1. Specific: It targets a specific area (conversion rate) for a defined segment (qualified leads from marketing automation).
2. Measurable: The desired increase (10%) is a clear metric, and the timeframe (6 months) allows for progress tracking.
3. Achievable: A 10% increase is possible based on historical data and potential improvements.
4. Relevant: Boosting sales from marketing efforts aligns with overall business objectives.
5. Time-bound: The 6-month timeframe creates urgency and a clear target date.
Actions
Step 1: Refine lead qualification criteria to ensure high-quality leads are nurtured through marketing automation.
Step 2: Personalize marketing automation campaigns based on lead demographics, interests, and behavior.
Step 3: Develop targeted landing pages with clear calls to action for qualified leads.
Step 4: Implement lead scoring to prioritize high-potential leads for sales follow-up.
Step 5: Track and analyze campaign performance to identify areas for optimization.
Outcomes
Increased sales and revenue
Improved marketing automation ROI
Marketing and sales alignment
Data-driven marketing optimization

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