CRM vs ERP: 5 Common Misconceptions

CRM and ERP systems are two of the most powerful business management tools, but it’s easy to become overwhelmed or confused if you don’t know how to use them. To help you, we’re going to debunk the top 5 most common misconceptions about CRM and ERP systems.


What comes to mind when you hear the terms CRM and ERP? 

Maybe you’re familiar with them and are utilising them in your business already. Or maybe you’re trying to find out more about these tools so you can streamline your business processes. Whether you’re familiar or not, it’s easy to fall into the trap of misinformation. My 20 years of experience working with CRM and ERP systems including my previous role as Global Marketing Executive at SYSPRO has highlighted for me many misconceptions about both CRM and ERP tools. In this article, we’re going to debunk the top 5 to help you find the best tool for your business.   

Before we dive into the misconceptions, it’s important to know what these tools are and what they do:

A Customer Relationship Management (CRM) tool is designed to facilitate interactions with customers, sales management, customer support activities, and so on. 

An Enterprise Resource Planning (ERP) tool is designed to facilitate internal business processes. It revolves around internal processes such as finance, human resources, procurement, inventory management, manufacturing, and so on.

Misconception 1: CRMs and ERPs are the same tool

The terms CRM and ERP are often, and incorrectly, used interchangeably. Though they both help streamline business processes, they serve distinct functions. CRMs, such as HubSpot, Microsoft (MS) Dynamics, or Salesforce, focus on customer interactions, sales, and marketing activities; primarily serving customer-facing teams. On the other hand, ERPs integrate internal processes like finance, human resources, procurement, and inventory management; aiding in tracking stock-keeping units (SKUs) and managing manufacturing processes. 

Understanding the scope of operations is essential, as CRMs handle customer interactions while ERPs manage internal business processes. We emphasise the importance of differentiating between these two powerful tools to ensure you choose the right tool for your business and implement it effectively.

Misconception 2: CRMs and ERPs are only applicable to specific departments

CRM systems are often perceived as only relevant for sales and marketing departments, while ERP systems are seen as only applicable to finance and HR departments. Both tools offer extensive benefits beyond this narrow belief. 

CRM systems provide valuable insights into customer behaviour, benefiting marketing, customer support, and product development teams, while ERP systems streamline processes and enhance collaboration across departments, improving overall efficiency and productivity. 

Integrating ERP (Enterprise Resource Planning) and CRM (Customer Relationship Management) systems can be achieved through Rest APIs, which facilitate data transfer between the systems through field mapping. Another method is employing an iPaaS (Integration Platform as a Service) service, often referred to as middleware. iPaaS serves as a bridge, connecting various systems to simplify management. This middleware enables the seamless integration of different platforms, allowing for the efficient sharing of vital data across teams, thereby enhancing the customer experience. iPaaS essentially acts as a connector that streamlines the flow of information between your organisation's ERP and CRM systems, ensuring that critical data is readily accessible where and when it's needed.

Misconception 3: CRM and ERP systems don’t need to be integrated

Many organisations are under the mistaken impression that their CRM (Customer Relationship Management) and ERP (Enterprise Resource Planning) systems function in separate silos and do not require integration. Yet, the current business environment has evolved into an interconnected landscape, necessitating the integration of CRM and ERP systems for a comprehensive and efficient organisational overview.

“Traditionally, ERP and CRM have remained separate solutions. But integrating your CRM and ERP can streamline business processes in lucrative ways,” says Meg Prater at HubSpot. Adequate integration ensures that customer data is easily accessible across various departments, breaking down information silos and facilitating a more comprehensive understanding of customer interactions and organisational processes. Integrating these two systems allows businesses to address different aspects of their operations. 

Misconception 4: CRM and ERP systems are complex, costly, and inaccessible to smaller companies

If you’re not familiar with CRM and ERP systems, it can be daunting to decide which is best for your business, particularly if you're a smaller business. There’s no need to fret, though, because these systems feature user-friendly interfaces and customisable dashboards that streamline navigation and usage. Despite requiring time and investment for implementation, technological advancements have made the process more efficient and affordable. 

ERPs are often perceived as pricey due to their complex deployment, particularly in managing manufacturing processes. This complexity stems from integrating machinery into the system, reflecting in the high costs associated with providers like NetSuite. Similarly, CRM costs can escalate for large enterprises with complex customisation needs. Oftentimes off-the-shelf solutions are enough, depending on specific requirements, for smaller businesses.

Over-engineering processes to fit CRM environments can inflate costs, which often calls for a reassessment and streamlining of the processes using an ERP. 

Collaboration with ERP and CRM systems refines both software and processes, which helps achieve your business goals.

Misconception 5: CRM and ERP implementation is a one-time investment and doesn’t require maintenance

Implementing CRM and ERP systems is often thought of as a one-time thing, not requiring any follow-up work. But ongoing updates and maintenance are crucial for both altering your systems based on your growing needs and maintaining a  competitive edge in an ever-evolving digital landscape.

Investing in regular optimisation and integration is necessary to leverage new features and security enhancements. For CRM systems, handling evolving data requirements calls for ongoing support, while ERP systems offer advancements like digital twins for predictive maintenance, highlighting the importance of continuous system evolution and integration to enhance efficiency.

Both CRM and ERP systems are valuable assets for businesses looking to enhance customer relationships, streamline operations, and drive business growth. 

It’s important to note that whether you’re a small business or a large enterprise, CRM and ERP systems are not one-size-fits-all solutions. Their successful implementation requires careful consideration, guidance from knowledgeable professionals, and an understanding of your business’s unique needs.

By debunking these common misconceptions, you’ll be able to make more informed decisions when choosing and implementing the right solutions for their needs.

Learn more about the best CRM and ERP solutions for your business, and start growing with HubSpot.

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