What is the Difference Between ERP and CRM?

May 16, 2025

written by Cynthia R.

What is the Difference Between ERP and CRM?

In the digital business world, software is an essential part of managing customer relationships and operations. Two of the most important business systems are Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM). These systems are required for business growth.

Both CRM and ERP software are powerful business tools that help to streamline and automate the most important workflow in a company. More than that, they both help companies to operate more efficiently and effectively with better insights into their performance.

This guide will explain in detail what is the difference between ERP and CRM. Also, explore benefits, usage and integration in business.

What is ERP

ERP is a business management software that is centralized and integrates core business operations in real-time. This software combines functions across a company to maintain cohesive data.

The most significant functions include those in different industries like Manufacturing, Distribution, etc. ERP Software Development often involves multiple components of computer software and hardware. The idea of integrating these components was founded as a way to gain real-time visibility across an entire organization.

ERP is focused on managing the data within your organization. It's more operational in nature and doesn't have the same window toward customer-related information. With the help of ERP, you do not have to put in 18 to 20 hours daily if you can have all the information on its features and functions beforehand. There are CRM-ERP solutions where both systems have individual interfaces and databases, but each focuses on specific business units.

Benefits of ERP

There are several benefits of ERP; some of the most important are given below. It has a positive impact on the business in various ways.

Streamlines business processes
Covers all aspects of the business
Ensures integrated information management
Supports Business scalability
Increase Productivity
Ease of Integration
Facilitates Organizational Decision Making

What is CRM?

CRM is an abbreviation for Customer Relationship Management. It is used to manage interactions with your Sales, Marketing and Customer Service team. It encompasses the strategies, processes, software, and web-based capabilities that an organization uses to assess and manage customer interactions with the organization.

For example, a CRM Software Development company in the USA creates a complete view of the business by storing its data from different business departments. Using different modules: Finance Software Development, Manufacturing, Supply Chain, HR, Operations, and others to feed into a sequential chain and consolidated database.

This provides a bird-eye view of a business, eliminating information silos while supplying data required for streamlined business operations to make data-driven decisions.

CRM tools are used to automate some marketing functions that can be personalized, and they are used to make the sales force more efficient with possibilities like best-lead tracking, sales forecasting, and so on.

Benefits of CRM

There are many different platforms and services that many organizations use to help them manage their customer service. These CRM tools refer to software that helps organizations keep track of all of their customers and provide the corresponding service to those customers.

The CRM system is advantageous in all ways as it contains all the basic factors from the business's point of view.

Better Customer Service
Lifecycle Management
Professional Sales Process
Other Capabilities
Increased Revenues

ERP vs CRM: What's the Difference?

Let's understand some of the major CRM and ERP adoption drivers. Unlike earlier implementations, ERP selection is now driven by a combination of strategic, technology, and platform considerations.

Moreover, CRM can be used to interact with customer transactions, such as high-moment interactions and entries of business data in real-time, which are very crucial in the marketplace. A CRM is not just a sales tool but a part of the ERP system that manages the customers' details and integrates them with the other key components.

The difference between CRM and ERP systems lies in what they manage. CRM manages customer data. While ERP manages business data:

Aspect	ERP	CRM
Primary Focus	Internal operations and resources	External customer relationships
Core Functions	Finance, inventory, production, HR	Sales, marketing, customer service
Key Users	Operations, finance, HR teams	Sales, marketing, and service teams
Data Management	Transaction data, operational metrics	Customer data, interaction history
Implementation Cost	Generally higher	Generally lower
Implementation Time	Typically longer (months to years)	Typically shorter (weeks to months)
Business Impact	Operational efficiency, cost reduction	Revenue growth, customer satisfaction

Do You Need CRM or ERP, or Both?‍

While related and occasionally complementary, CRM and ERP focus on different business data. CRM and ERP systems both manage customer interaction with the company and the data it generates, but CRM is key to managing how you interact with customers. At the same time, ERP is used to manage the resources and information of a company.

CRM systems help you manage your business's relations with solid prospects and customers. In essence, they help you manage your relationships with new and existing prospects. That means they may seem like they overlap with your existing tools.

Your decision will depend on your particular business drivers.

Select CRM if you need to:

Centralize your customer information
Automate your strategy
Create sales reports
Offer better customer service
Provide a 360-degree view of your customers
Aim to improve productivity
Offer lower ownership costs
Have a scalable cloud platform
Need to automate campaigns and target rewards

Select ERP if you need to:

Business challenges that are focused on managing inventory and operations or where financial processes and management are critical. Critical as businesses grow and operations become more complex.

How is CRM Integrated with ERP?

When CRM and ERP are integrated, sales representatives can see product availability and pricing information from the ERP system while they engage with customers. Your Finance Software Development personnel can access customer data, such as outstanding receivables and payment advice, at the ERP level while processing orders and collections.

Customer service representatives can pull up order and delivery information from the ERP system when addressing customer inquiries.

Integrating CRM with ERP is a joint activity that focuses mainly on the business instead of the IT department. While details may be discovered during implementation, the high-level scope must have already been discussed in the analysis before that.

It is essential to integrate CRM and ERP for your business to reach its full potential. You might benefit from a combined CRM-ERP solution on a single platform provided by some vendors to avoid integration ills/overdevelopment.

That is all about this guide on the difference between ERP and CRM.

Final Words on the Difference Between ERP and CRM

Both CRM and ERP systems are useful for businesses, and they are even more powerful when integrated. A CRM is customer-facing and manages external relationships, while an ERP is operations-facing and manages internal processes.

One can refer to ERP software capabilities as being mainly “transactional” in nature, while CRM software features are primarily business “real-consequence” transactional features. Each product takes care of a set of requirements that a business has and integrates with other products and services that a company requires.

Frequently Asked Questions

1. Is there a difference in the benefits of CRM and CRM for small and medium businesses?

Yes, each vendor provides a smaller 'lite' version of the program, specifically configured for SMBs.

2. Should I implement CRM or ERP?

In most cases, a business will implement CRM before ERP, as CRM has a direct impact on sales growth. However, ERP may be the right solution if you are focused on inventory or operations management.