Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) are both systems designed to automate and streamline processes in a business. While CRM is a system for managing the front-end of the business, ERP is involved in managing the back-end. The relationship between ERP and CRM is that these are two systems that need to work in conjunction with each other in order for the front and back office of the business to work effectively and efficiently.
Customer relationship management is the process of how a business manages its customer contacts. As the name implies, CRM focuses on how, when, where, and why the business interacts with current and potential customers. It includes the management of marketing activities to attract new customers and to communicate with existing customers. Customer accounts, managing customer activities, and providing customer support are the other primary areas covered under this process.
Enterprise resource planning is a system that manages how the business is managed and operated, so it deals with the business functions of the company. Some of the processes that fall under ERP are customer service, managing inventory, planning for the production of the goods and services that the business sells, tracking orders, and purchasing supplies for the business to operate. ERP focuses on automating the processes of the project management, distribution, financial, sales, and manufacturing areas of small- to medium-sized businesses.
ERP and CRM focus on slightly different parts of the organization. While customer relationship management tends to focus on the face of the organization and enterprise resource planning tends to focus on the internal operations of the organization, the ERP and CRM systems do have some overlap. Some ERP systems have CRM functions built into the software and some CRM systems also possess ERP functions. While the majority of the service providers and software programs between the two system remain separate, some providers are working on creating one comprehensive system that encompasses both the ERP and CRM sides of a business.
By automating both the customer processes and the internal processes of the business, ERP and CRM work together to streamline all of the functions of this business — be it internal or external. The bottom line is that these two areas of automation help to keep important business factors from falling through the cracks. When the front end and back end of the business are communicating with each other, it covers all the bases.