You’re scaling. Revenue’s climbing somewhere between $5M and $50M. Your spreadsheets are multiplying faster than your headcount. And someone in your leadership team just asked: “Do we need a CRM or an ERP?“
Here’s the thing: it’s not always an either-or question. But knowing which system to prioritize can save you from expensive mistakes and implementation headaches.
What We’re Really Talking About
CRM (Customer Relationship Management) systems focus on your front office. Think sales pipelines, customer interactions, marketing campaigns, and service tickets. Microsoft Dynamics 365 Sales and Customer Service live here.
ERP (Enterprise Resource Planning) systems run your back office. We’re talking financials, inventory, procurement, manufacturing, and supply chain operations. Microsoft Dynamics 365 Finance, Supply Chain Management, and Business Central handle this territory.
Both connect to the same data. Both matter. But your growing pains will tell you which one needs attention first.
The Decision Framework
Let’s break this down with a practical matrix based on what we see across manufacturing, distribution, professional services, and retail sectors.
| Choose CRM First If: Your revenue growth is outpacing your ability to manage customer relationships. Sales reps are using personal email folders and Excel to track deals. You can’t answer basic questions like “What’s our pipeline for Q4?” or “Which customers haven’t heard from us in 90 days?” You’re in professional services where client relationships drive everything. Your project teams need visibility into client history, communication threads, and service agreements. Marketing and sales alignment is broken. Leads fall through cracks between departments because there’s no shared system of record. | Choose ERP First If: Your financial close takes weeks instead of days. Month-end reporting involves reconciling data from five different systems, and your CFO is drowning in spreadsheets. You’re in manufacturing or distribution and can’t answer real-time questions about inventory positions, production capacity, or supplier performance. Compliance and audit requirements are keeping you up at night. Multiple systems mean multiple versions of truth, and that’s a regulatory risk you can’t afford. Order fulfillment is becoming a bottleneck. Your operations team is manually coordinating between sales, warehouse, and accounting systems. |
You Need Both When:
You’ve got significant complexity on both fronts. This is common in manufacturing businesses doing $20M+ where you’re managing complex supply chains AND a growing B2B sales operation.
Integration pain is slowing you down. If you’re already running separate CRM and ERP systems that don’t talk to each other, moving to Dynamics 365’s connected platform makes sense.
What This Really Means for Your Business
In manufacturing, we typically see ERP as the priority. You need Dynamics 365 Supply Chain Management or Business Central to manage production schedules, material requirements planning, and shop floor operations. The CRM piece often comes six to twelve months later when sales complexity increases.
For distribution companies, it depends on your model. If you’re doing high-volume, low-touch transactions, ERP wins. If you’re doing consultative B2B sales with complex pricing and relationships, CRM might come first.
Professional services firms often start with Dynamics 365 Sales and Project Operations. Your revenue is entirely relationship-driven, and project profitability depends on good resource management and time tracking.
Retail businesses scaling to multiple locations need the inventory and financial controls of Business Central before sophisticated CRM becomes critical.
The Integration Reality
Here’s what matters: Microsoft Dynamics 365 isn’t separate products bolted together. Finance data flows into Sales. Customer information connects to Supply Chain. Service cases link to project records.
This matters more as you grow. At $5M, you might get away with disconnected systems. At $30M, that approach will break you.
Making the Call
Start by asking three questions:
- Where is your biggest operational pain right now? Customer chaos or back-office disorder?
- Which problem, if solved, would most directly impact revenue or margin?
- What’s your timeline? ERP implementations typically run 4-8 months. CRM can be faster at 2-4 months for core functionality.
Your industry matters, but your specific bottlenecks matter more.
Getting It Right
Direction Software LLP specializes in Microsoft Dynamics 365 Business Solutions with over 20 years of implementation experience across manufacturing, distribution, professional services, and retail. Our consultants work with growing businesses to identify the right implementation approach based on your actual operational reality, not generic best practices.
If you’re trying to figure out your next move, we can help you think through it. Reach out for a conversation about what makes sense for your situation. You can also follow us on social media for insights on getting more from your business systems.
The Bottom Line: There’s no universal answer. But there is a right answer for your business right now. Focus on the system that removes your biggest constraint to growth. You can always add the other piece later, and with Dynamics 365, they’ll work together when you do.
About the author:
Jaspreet Singh – General Manager
Leading multiple technical teams at Direction Software LLP to deliver excellent service to customers