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CRM vs. ERP: Two Sides of the Same Coin

Does your business need a CRM or an ERP? Spoiler alert - it needs both.

ERP (Enterprise Resource Planning) and CRM (Customer Relationship Management) are 2 of the largest software markets in the world because they are mission-critical software systems for running a business. 

While they each support different business functions and take different approaches, they do so using similar tools – automation and connectivity.

What is a CRM: Front of house

As the name implies, a CRM system is used to manage customer-facing processes and store customer data. Once thought of as primarily a sales tool, CRM software has evolved over the years to include the marketing team and customer service/support efforts. A CRM system can help teams:

  • Centralize account and customer data- Within a CRM platform, every note, quote, sale, support ticket, customer interaction, status update, and more can be captured and time stamped.
  • Automate communication cadences- From lead and opportunity management to post-sale support, all of your communications can be automated to ensure your cadences are always followed.
  • Track results and visualize data- A CRM platform can transform all the data it captures into easy-to-digest reports and dashboards. 

A CRM is a  “front of house” tool used to engage with customers. This means a CRM needs to be flexible and adaptable while also being appealing for customers to engage with.

FreeAgent CRM vs ERP
FreeAgent CRM vs. ERP

What is an ERP: Back-of-house

An ERP system is used to manage all the “back of house” processes of a business. This includes financial management (payroll, accounts payable/receivable), product management (inventory management, supply chain, production processes), and some aspects of HR (human resources). ERP software can help teams:

  • Produce financial statements and reports- An ERP platform can make tracking and reporting on a business’s financial operations faster, easier, and more accurate.   
  • Track and manage inventory- Within an ERP platform, inventory can be tracked and managed automatically, in real-time, eliminating the human error that can lead to late deliveries and missed shipments.
  • Manage payroll- Payroll processes can be simplified and streamlined with an ERP solution. Automated notifications can ensure approvals and expense requests are fulfilled quickly, and bonuses can be allocated automatically.

An ERP’s primary requirement is accuracy. If a CFO presents a financial statement that is not 100% accurate, that could mean their job. As such, ERPs are designed to be rigid and inflexible.

CRM vs. ERP: Better together

CRM and ERP solutions are often compared to each other, as they are both essential software tools for businesses of any type. Companies with tight financial restrictions will often try to evaluate which is more critical to business success. 

The answer to this question will rely heavily on the priorities and nature of the business. CRM and ERP systems support very different business processes, and one can not be used in place of the other.  

The truth is, the conversation should not be around CRM vs. ERP as a software solution, but rather CRM + ERP as a complete solution. Both of these tools individually can contribute greatly to business success, but together they have the potential to optimize nearly any business process.

All-in-one vs. integrated

When looking at ways to use CRM and ERP together, your options are an all-in-one software solution or two separate but integrated toolsets.  

  • All-in-one- On the surface, combining CRM and ERP systems into one comprehensive whole seems logical. After all, why not have everything in one place?

The challenge lies in the oppositional architectural considerations of these software tools. As we mentioned, a CRM platform needs to be flexible and dynamic, while an ERP needs to be rigid and static. 

Providers offering an all-in-one solution are forced to prioritize one over the other. This often results in an ERP system with a few CRM-like tools “thrown in”.  

  • Integrated- While an integrated solution requires purchasing and implementing two separate software toolsets, the benefits far exceed the drawbacks.

First, both software toolsets will work the way they should, with no compromises. Your CRM platform will be flexible, customizable, and adaptable, while your ERP solution will be structured and precise.  

Second, your teams can access each system’s full suite of tools, and the results are more than the sum of their parts. 

For example, by allowing your sales team to send orders directly to the fulfillment office or by facilitating your finance department to see the revenue coming into your pipeline in real-time, you can remove friction in your business and create a better customer experience.

FreeAgent CRM can optimize all your business tools

FreeAgent CRM is a powerful work management platform that integrates with hundreds of other software tools to offer a complete solution for all your business needs. 

FreeAgent’s robust features complement and enhance other software tools, such as ERP, providing a better experience for your customers and employees.

Try FreeAgent today, at no cost, and discover why work’s better with a FreeAgent on your team.

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