All businesses seek the best ways to save money, boost productivity, and organize workflow. IT, of course, has become a major resource in accomplishing these goals. As technology develops, some software applications and platforms simply become more advanced and applicable than others. This has been the case with the Customer Relationship Management (CRM) IT environment. The flexibility and customizable properties embedded within CRM utterly eclipse the Enterprise Resource Planning (ERP) systems, which were developed first.

An IT Big Bang

The first business-related use for computers was actually accounting; beginning in the late 1970s we saw with the rise of several accounting applications. These accounting applications were very successful, reducing manual data entry and enabling users to maintain financial records more easily. These innovations streamlined business like never before, encouraging developers to create more functionality to offer alongside accounting. This led to the birth of ERP in the early 80s.

ERPs developed to provide a kind of one-size-fits-all system. Developers knew that accounting is essential for every business, so they wanted to add other important functions into one IT ecosystem. However, this presented a challenge. Each industry operates differently, even relying on industry-specific functions. Developing specific operations for every type of business would be nearly impossible for a single application provider, especially the early accounting software groups. Instead, developers added software for the most prominent cross-industry operations like supply chain automation, resource planning, and inventory management. Functions like these are connected to accounting but also play integral roles in managing many types of business.

CRM was started around 1993 as a system to manage sales and customer relations. Things like prospect tracking, pipeline reporting, and sales automation, were core functions. Essentially, CRM and ERP represented two sides of the same coin. ERP concentrated on back office functions like managing money and operations, while CRM organized how customers were acquired and retained. What gave CRM the strategic edge was flexibility.

CRM is Eclipsing ERP

Essentially, ERP provides a structure for the user to manage the back office with the paradigm that business success relies on using the best practices of management process and structure defined by the software creator. This ideology actually reflects its accounting roots; because accounting relies on a standard of principles and rules applicable to all companies, all business functions must also be consistent. This mindset can also be traced back to early in ERP’s creation when developers hadn’t yet realized the full potential of what computers could do. We still haven’t. CRM challenges the ERP process by providing a system in which the management structure follows the user’s needs. CRM’s central paradigm is that the customer using the application is the expert on how they should run their individual business, rather than the software maker.   

Even within a single industry, businesses operate differently. Therefore, the reporting and overall operation of individual businesses will be unique. Most ERP applications are very difficult, if not impossible, to customize because of their legacy structure. They can’t adjust for differential or unconventional business models and practices. The amount of divergence in modern day businesses makes it essential for business IT to accommodate a variety of factors.  

CRM was inherently designed to be flexible because it focused on the communications that enabled businesses to grow. Individual organizations use different sales strategies and calculate commissions differently, so the platform had to be adaptable. For CRMs like Salesforce to be successful, they couldn’t be constricted to a single mold or process, but rather, allow business leaders to create their own.

Will CRM Make ERPs Obsolete?

If one was to picture an eclipse, one sphere rapidly taking over the space of another, this basically encapsulates the relationship between CRM and ERP. CRM has overtaken ERP, but the foundations of ERP are still useful. This is how Accounting Seed comes into play.

As a CRM, Salesforce was developed to allow for a range of functions and business requirements – whatever an individual needs. Accounting Seed was developed to mirror this flexibility. We built an accounting software with a CRM mindset to fit Salesforce. This gives the user the chance to basically create their own ERP with the flexibility of a CRM. Our accounting solutions and functions are designed to be highly customizable; reporting and key processes can be automated to the user’s specifications. We’ve bridged the two systems, essentially making CRM the new ERP and so much more.