by Ray Grady

The battle between ERP and CRM for B2B commerce

Jan 30, 2018
CRM SystemsERP SystemsIT Strategy

Change can be intimidating, and ERP loyalists must either adapt or risk losing market share.

boxing gloves fight battle knockout
Credit: Thinkstock

Today’s B2B buyers aren’t satisfied with the status quo. They’re looking for rich, cross-channel buying experiences that make it easy to locate product information and complete purchases, similar to the experiences they enjoy when they shop on Amazon or other consumer sites.

Buyers also want more control in the buying process. A recent McKinsey study found that the majority of business buyers now prefer self-service offerings when making repeat purchases.

To get there, B2B businesses need to provide digital commerce sites that parallel the best eCommerce experiences the B2C universe has to offer. But many B2B businesses aren’t prepared to offer those kinds of experiences because they’re still using back office-centric ERP systems for commerce. These technologies focus on the product, inventory and financial records, and tend to be difficult to change. They simply aren’t built to enable an intuitive, customer-facing portal.

Growth-conscious business leaders are moving to a customer-centric approach using CRM-based commerce systems built in the cloud – technology that provides a more complete view of customers and can be quickly adapted to meet new business needs or marketplace changes. But other decision makers remain loyal to using ERP systems for commerce because these technologies touch every part of their back office and have been part of business operations for as long as they can remember.

Ready or not, the battle between CRM and ERP loyalists is on – and the stakes couldn’t be higher.

B2B businesses are at a turning point

The transition from back-office solutions to customer-centric commerce technology is long overdue. In fact, many industries have already experienced shifts that make a customer-first approach an obvious next step for improved revenue and engagement.

For example, in the personal transportation industry, taxicabs focus heavily on the product (cabs), but pay little attention to customer convenience. Customers are required to seek out the product (no small feat at rush hour) and are forced to either pay in cash or navigate the challenge of a clunky POS system to pay with a credit card.

The emergence of ride-sharing in personal transportation launched the transition to a customer-centric approach. Instead of forcing customers to chase the product, Uber and other providers come to the customer. The transaction is convenient and seamless and doesn’t require the customer to jump through hoops to provide payment.

But while the Uber model reflects the natural evolution of the industry, many cab companies adamantly oppose it and remain loyal to the traditional taxi business model – one that is much more focused on the back office than the customer.

The Uber story parallels the current situation in B2B commerce. CRM-based commerce has completely changed the way B2B businesses interact with buyers. With CRM, businesses can evolve to convenient, customer-driven buying experiences that satisfy the expectations of the marketplace.  

But for a variety of reasons, some companies continue to rely exclusively on ERP systems (the taxi cabs of the commerce world). It’s not just that ERP systems are familiar. Historically, ERP systems have worked brilliantly for a range of business functions and made it possible for leaders to power their entire companies with a single platform. But the technology landscape has changed because B2B buyers’ expectations have changed. As a result, ERP-only loyalists find themselves at a critical turning point. If they continue to remain stuck in the status quo, their go-forward commerce strategies will be painfully out of step with the marketplace.

The future of commerce is customer-centric

If a customer-centric strategy is critical for B2B commerce success, why can’t ERP loyalists simply leverage customer-facing applications in their existing systems? Because it’s not that simple. ERP systems are familiar technology, but they aren’t capable of supporting customer-facing B2B commerce applications. They are designed to manage things like product information, inventory and financial records, and lack the flexibility to quickly adapt to customer and market demands.

CRM-based commerce is built from the ground up to provide the seamless, self-serve buying experiences that B2B customers crave. In an industry ripe for even more disruption, CRM systems give buyers a unified, informed and convenient experience across all channels and touchpoints.

In addition to enabling customer-first buying experiences (which drive more revenue), customer-centric CRM systems help businesses capture a more complete view of sales, service and commerce data. This 360-degree view of the customer creates more informed interactions and improves engagement. That’s important because going forward, engagement will increasingly separate winners and losers in B2B industries.

The inherent flexibility of cloud-based CRM systems also makes it easier for B2B commerce to evolve over time. As trends and expectations change, cloud-based CRM systems can be quickly modified to accommodate new markets, new storefronts and other developments. By contrast, any updates to an ERP-based commerce system require months, if not years, to implement.

There will be casualties in the battle between ERP and CRM. Change can be intimidating, and ERP loyalists must either adapt or risk losing market share. But the transition to customer-centric CRM systems aligns with the needs of today’s B2B buyers and markets – and that should make the decision an easy one.