Insights
CRM vs ERP: the difference, and which your company needs first
Two systems often mentioned together, but each solves a different problem in a different part of the company.
What is a CRM?
A customer relationship management (CRM) system manages everything before and around the sale: who your prospects are, where they came from, which stage of the pipeline they are in, who is following up, and what happens next.
Its main users are sales and customer service teams, and its core question is: who is this client, and what do we do with them now?
What is an ERP?
An enterprise resource planning (ERP) system manages what happens inside the company: operations, inventory and resources, purchasing, finance, and the reporting management relies on.
Its users are spread across departments, and its core question is: what do we have, what has moved, and what is its financial effect?
The difference, point by point
- Focus: a CRM centres on the client; an ERP centres on operations and resources.
- Users: a CRM serves sales and customer service; an ERP serves operations, finance and management.
- Data: a CRM holds communication, opportunities and pipeline stages; an ERP holds inventory, orders and financial entries.
- The question it answers: CRM — “what do we do with this client?”; ERP — “what state is the company in right now?”
Which should you start with?
Start with a CRM if your problem is in sales: enquiries getting lost, follow-ups forgotten, nobody knowing the state of the pipeline. Start with an ERP if the problem is internal: figures assembled by hand, inventory that does not match reality, reports that arrive late.
If you are unsure, ask: where is the company losing more today — in the clients we do not follow up, or in the operations we cannot see?
When you need both: integration
As a company grows it needs both, and a new problem appears: the same data is entered twice. A client who closes a deal in the CRM should appear in the ERP as an order or contract without anyone copying it by hand.
So it is worth thinking about integration from the start, even if you begin with one system: make sure each has an API that lets it be connected to the other later.
An example: a real estate developer
At a real estate developer, the CRM manages interest in units: where each enquiry came from, who is following it up, when the buyer visited the project. The units themselves — status, reservations, contracts, payments — are managed in an operational system closer to an ERP.
Once the two are connected, sales reps see the units that are actually available, unit status updates automatically on reservation, and management sees sales and collections in one place.