No matter how big or small your organization may be, running a business can be a daunting task at the best of times. Keeping up with valuable data and managing business resources and processes while making sales can be a tricky proposition. For this reason, many organizations have turned to enterprise resource planning (ERP) and customer relationship management (CRM) software to help streamline and automate many of their integral business processes. Both of these systems help organizations better manage their business and gain competitive edges when dealing with their supply chains, services, finances and sales. But what are the differences between ERPs and CRM solutions, and when should you be using them together? This article will help fill you in on all the information you need to know about these solutions.

ERP vs CRM: Enterprise Resource Planning

ERPs are software systems that assist organizations in automating and managing their core, back office business processes. Essentially, ERP software is the glue that holds an organization together and keeps it functioning by providing a single source of truth across the board and acting as a vital repository for workable data. This allows for different departments to easily work with each other and share common information in ways that would otherwise be too difficult to maintain long term within the departments alone. This wide-ranging information system can minimize miscommunications and help to synchronize your business processes across the board, ensuring that no information is lost.

One of the biggest positives of ERP systems is that they are flexible and can be set up to handle  each business’s unique requirements while also following generally accepted accounting standards as they’re modular and can cover a wide array of business processes. Some of the processes that benefit most from an ERP system include:

Supply chain management: ERPs can help supply chain managers maximize cost savings and better support their end-to-end procurement processes. These systems can also provide and inform production and distribution channels and help to plan and optimize a company’s manufacturing capabilities and warehouse operations. 

Governance and human resources: In the context of human resources, ERPs can help to stay on top of payroll information as well as manage databases of your organization’s employees. These systems can also help to ensure that your staff are trained properly, have all of the information that they need and have their time and attendance tracked. ERPs also help organizations manage their recruitment efforts by providing a method from which job offerings can be published and selection processes tracked. Finally, the clarity of information that ERPs bring helps HR departments keep better track of their KPIs. 

Accounting, projects and finance: ERPs are a major benefit for the financial departments of your business. The ability to automate backend processes can help to cut down on human error while ensuring that your employees can focus on mission-critical tasks instead of rote labor. An ERP system is also an effective way for organizations to keep track of their revenue, costs, projects, payables, taxation and other financial data. As a single source of truth, ERPs provide robust reporting tools and data management solutions to keep the organization’s management on top of everything.

In a nutshell, ERP systems do everything to help streamline business processes on your organization’s back end and can be used as a central platform that your company revolves around. By providing automation, a single source of truth and seamless data management, ERPs can revolutionize how a business functions and ensure that it‘s able to be flexible should it need to be. If you’re looking to ensure that your company’s business operations are fully optimized and streamlined, investing in ERP software is right for you. 

ERP vs CRM: Customer Relationship Management 

What ERP software is to the back office of a business, CRM software does the same for the front office. While an ERP solution manages and accounts for all of the essential back office functions of an organization, the CRM, front office system handles every interaction that a company has with its customers and helps to provide better customer experience. These systems have become increasingly important over the years and are vital for any organization looking to make meaningful connections with their target audience, prospects and existing customers.  

CRM software runs the gamut of front office functions, including assisting sales teams, marketing automation, customer service and field service. Its main goal is to ensure that your organization is providing the best possible experience for prospects and customers alike while also assisting your internal teams in crafting offerings and maintaining reliable and consistent customer data. A few of the most beneficial aspects that a CRM system brings to sales, service and marketing teams include:

• • A single source of truth for customer data: Your organization needs to understand everything about your customers. Through the centralization of data, a sales team can easily identify the needs of each client and keep up to date with new leads. This same information can be used for marketing purposes, enabling marketing departments to keep track of where each potential prospect or customer is in their buyer journey and deliver appropriate content to keep them engaged.
  • Automation: There’s nothing better for any sales team or marketing professional than the automation of data entry and other rote tasks. Automatically updated information, qualified leads and marketing emails help your professional team focus on revenue-forward objectives instead of trudging through hours of data entry. As an added bonus, automation reduces human error, so mistyped names and duplicate data can become a thing of the past. 
  • Reporting and analytics: Every organization wants to know how they’re doing and sales and marketing live and die based on their ability to actionably respond to presented data. CRM systems can help your teams understand where their leads may be encountering challenges, the efficacy of their sales and marketing campaigns as well as gain the capability to better recognize potential opportunities. Dashboards created from this data can help inform your teams where they should be focusing their efforts to bring in more sales, or better qualify leads.

If you’re looking to improve how your organization handles its front office interactions and gain a single source of truth for your marketing, sales and customer service teams, a CRM is what your company wants. Successful adoption of CRM systems can help to increase productivity, reduce confusion and enable your business to send customized messages to your clients and prospects at any time. 

With both ERPs and CRMs explained, the real question to ask is, when would it be beneficial for my organization to use both simultaneously? 

Breaking Down ERP vs CRM: When Both Solutions May Be Appropriate

The answer to the question of when it’s appropriate to use both an ERP tool and CRM system that is designed to work together is always — if your organization can afford it. Both styles of platforms have become integral for companies ranging from SMBs to enterprises and are a must for any organization. These two solutions enable companies to be organized and efficient in both the front and back office, providing valuable capabilities that can help any business gain a competitive advantage. Even better, an integrated ERP and CRM solution can give your organization a holistic view of the entirety of its operations with the ability to make more informed decisions. This integrated solution can also help eliminate duplicate data sets and increase the speed at which your company can communicate internally. 

Integrating separate ERP and CRM systems not designed to work together can be tricky and expensive for many organizations. Issues such as standardizing data sets, data cleaning and maintaining a custom integration can make such an approach have a much higher total cost of ownership. However, sometimes an organization’s unique requirements can make such an approach appropriate. An ERP/Accounting solution can work with most organizations in most industries, but sometimes that organization has unique front office or back office processes that also need to be automated and require customization.  CRM systems are designed to be flexible and molded around an organization’s business processes, so sometimes organizations can get quicker returns on their investments from customizing a CRM solution and integrating it to an ERP solution they already have in place and working effectively.  

If you’re wondering whether your organization should invest in an ERP or CRM system first, there isn’t a simple answer. The general rule of thumb is that organizations that require a lot of backend support, whether it be for supply chain management and distribution or a complicated financial situation, should be investing in an ERP first. A company that has relatively little need for complex backend support but finds that they need a better way to manage front office functions with its customers or has unique processes that require customization should first consider investing in CRM. 

However, there’s a better approach than buying one or the other and facing possibly tricky implementation issues down the road. That is, working with an ERP solution and partner that also has CRM functionality baked into their solution. Your CRM/ERP partner can then help your organization pick and choose what they need without having to worry about ERP or CRM integration issues. Microsoft Dynamics 365 offers a fully integrated combination of both ERP and CRM functionality. Companies can pick and choose what they need for immediate support while retaining the option to grow and scale their usage of ERP and CRM systems without worry. As every company has unique individual needs, the full modularity of Microsoft 365 provides the option to utilize the systems that best suit their current business needs. As both CRM and ERP run on the same platform, integration between the two is simple and can be done quickly and effectively by any organization. 

Implementation of an ERP or CRM can be a tricky prospect for many businesses — between 55% and 75% of ERP implementations fail. For organizations to get the most out of their ERPs and CRMs, working with a trusted partner for implementation can help to drastically reduce the chances of failure and increase the likelihood of seeing real, measurable results for their business. At the TM Group, we’ve turned ERP implementation success into a science, ensuring that our clients are delivered a transformative system. For more information on how we can help you successfully implement an ERP, contact us today.