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CRM vs. ERP: What’s the difference and which do you need?

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Both CRM and ERP systems handle contacts, companies, quotes, orders and forecasts… and they may handle line-item configuration, bundles, delivery schedules and invoices. Where does one start and the other stop? Behold this guide for the bewildered.

The footprints of enterprise resource planning (ERP) and customer relationship management (CRM) systems seem to overlap — they both handle contacts and companies and lots of details about orders.  Indeed, several ERP vendors claim that CRM, HR and the scheduling of executive golf outings are part of the ERP domain. Consequently, there is sufficient vagueness and confusion on these topics to …ahem… cloud the issue.

Since there’s not much confusion about who uses ERP vs. CRM systems, let’s start there.  The main users of CRM systems are in the sales and support organizations – they are ultimately customer-facing and they don’t do the actual work of producing and fulfilling orders (they just yell at the people who do that).  In contrast, the ERP users are focused on the process and logistics of producing the widgets: factory managers, production schedulers, buyers, supply chain types and finance types. ERP users are internal and supplier-facing, rarely calling a customer except to reply to a complaint of some kind. The ERP and CRM users do not party together, they work at different paces, and they would barely recognize the other group’s software as useful to them. Essentially the only people in your organization to have logins on both the CRM and ERP systems would be IT folks charged with integration, data warehousing or analytics.

Yet several ERP vendors have CRM offerings and is increasingly encroaching on ERP turf.  So, despite the disparity of user groups, these software vendors must be seeing a business opportunity.  The challenge for us customers is figuring out how much of each kind of system to buy, and where we can “go light” versus insisting on best of breed.

For large enterprises, the decision has already been made: they need to have a full-fledged ERP system to manage multiple factories, distribution centers, supply chains and currencies…. They also need a full-fledged CRM system to manage their sales, support and some of their marketing functions across international markets. Amusingly, the Fortune 100 may already have several ERPs and CRMs, and the real work is integration and maintenance of the customer master. Thanks to system upgrades and technology evolution, that is an evergreen problem.

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Article Credit: IT World

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