ERP vs CRM: what is the difference and which do you need?

ERP and CRM systems are both essential software solutions that automate core business processes and improve operational efficiency. While they share a goal of boosting productivity, an ERP (Enterprise Resource Planning) system focuses on internal back-office functions like finance and supply chain, whereas a CRM (Customer Relationship Management) system handles front-office, consumer-facing interactions.

Choosing between them depends on your strategic priorities. For example, if you need to expand your pipeline and improve lead nurturing, a CRM may provide you with a better starting point. However, if your growth is hampered by fragmented financial data or supply chain bottlenecks, an ERP may be the better option.

Key takeaways

• Distinct roles: ERP systems optimise internal operations like finance, HR and supply chain, while CRMs focus on revenue-driving activities such as sales, marketing and customer support.

• Strategic priorities: CRMs prioritise pipeline visibility, customer retention and revenue growth, whereas ERPs emphasise cost control, compliance and operational efficiency.

• Integration advantage: connecting ERP and CRM systems optimises the lead-to-cash process and reduces lost data between teams.

• Scalable growth model: B2B SaaS and industrial companies typically pair a CRM like HubSpot with a specialised ERP to align sales performance with backend fulfilment and financial reporting.

Defining both systems

To understand which technology your organisation needs, it's important to define the specific functionalities and purpose of each platform. While some modern suites offer overlapping features, their core missions remain distinct.

What is a Customer Relationship Management (CRM) system?

A CRM system is a strategic tool designed to manage all interactions between a business and its customers or leads. Its primary function is to centralise contact data, track sales opportunities and automate marketing workflows with the goal of building lasting relationships.

Keeping that in mind, a CRM provides the necessary visibility into the buyer’s journey, enabling teams to nurture prospects effectively. By using a system like HubSpot, companies can sync their sales, marketing and support teams around a unified view of the customer, which reduces churn and increases upsell opportunities.

What is an Enterprise Resource Planning (ERP) software?

ERP software acts as a shared database for an entire organisation. It manages the "back-office" by connecting financial systems, such as the general ledger and payroll, with operational systems like inventory, procurement and distribution.

The main objective of an ERP is to provide a comprehensive view of a company's financial health and resource allocation. In industrial B2B settings, for instance, this allows managers to automate daily activities involving project management, risk management and regulatory compliance. Popular examples include Microsoft Dynamics 365 Business Central, SAP Business One and Oracle NetSuite.

ERP vs CRM: the key differences

Although the two may seem similar at first glance, ERPs look inward at business operations, while CRMs look outward at the customer.

Revenue generation vs operational efficiency

The fundamental goal of a CRM is to maximise revenue by improving how a business attracts and retains clients. It provides tools for lead scoring, campaign execution and sales pipeline management to help commercial teams close deals faster.

On the other hand, an ERP is built for operational efficiency and cost control. It focuses on the internal processes required to fulfill the promises made by the sales team. By automating accounting, production planning and supply chain logistics, an ERP helps a business reduce manual errors and decrease inventory costs.

The end user: who uses which platform?

Because their functions differ, the primary users of each system are usually attributed to different departments:

• CRM users are typically members of the sales, marketing and customer success teams. They use the platform to track interactions, manage email campaigns and handle support tickets.
• ERP users are usually found in finance, human resources, logistics and production departments. These professionals rely on the ERP for financial reporting, procurement and managing employee lifecycles.

While a marketing director might check CRM dashboards for pipeline health, an operations manager will depend on the ERP to make sure that the warehouse has enough stock to meet that demand.

Which system should your organisation prioritise?

Choosing where to invest first depends on your current business challenges and digital maturity.

• Prioritise a CRM if your customer experience is inconsistent, your sales pipeline is invisible or your retention rates are falling. For many small businesses and startups, a CRM is often the best place to start because it is generally less expensive and easier to implement than a full ERP.
• Prioritise an ERP if your financial reporting is slow or inaccurate, you struggle with manual bottlenecks in procurement or your operational inefficiencies are directly impacting productivity. Large enterprises or manufacturing firms often require an ERP early on to manage complex logistics and multi-entity accounting.

In many cases, rapidly scaling companies decide to adopt both in order to provide a 360-degree view of the business.

Integrating ERP and CRM for a unified view

Integrating your ERP and CRM makes sure that information flows seamlessly between the front and back office, putting everything in one place. This helps keep data and teams in order.

How to successfully connect your systems

1. Assess your needs: identify specific pain points, such as slow order-to-cash cycles or inconsistent customer data between sales and finance.
2. Define integration points: common points include client account info, product pricing, sales orders and payment records.
3. Choose a method: you can use pre-built connectors, third-party integration platforms or native integrations if your software belongs to the same ecosystem (like Microsoft or Salesforce).
4. Ensure data hygiene: before connecting the two, clean up duplicate contacts and outdated records to prevent "garbage in, garbage out" scenarios.

Tools you can use to integrate ERPs and CRMs

There are several platforms available to bridge the gap between commercial and operational data, including:

• HubSpot: offers deep integration expertise, particularly for B2B SaaS companies looking to connect their CRM with backend ERPs.
• Microsoft Dynamics 365: a suite that natively combines both ERP and CRM modules, such as Business Central and Sales.
• Oracle NetSuite: an all-in-one cloud suite that includes financials, CRM and e-commerce in a single platform.
• Salesforce with Rootstock: while Salesforce is primarily a CRM, it can run ERP functions natively through partners like Rootstock, allowing manufacturers to manage inventory and production on the same cloud platform.

Conclusion

Understanding the difference between ERP and CRM is a must for any professional looking to improve their business strategy. A CRM drives your revenue by managing the "front" of the business, which includes your leads and customers, while an ERP helps make sure that the "back" of the business, including your finances and operations, runs smoothly.

For organisations looking for sustainable growth, the goal may not be to choose one over the other, but to integrate both into a cohesive digital ecosystem. By connecting your commercial and operational areas, you eliminate fragmentation and empower your team to make decisions based on supported evidence rather than assumptions.